The lifeline for the
future of Fiat's giant hometown plant, Mirafiori, have
been thrown into disarray once again with news that the
hard-fought deal to build a new-generation of SUVs at
the plant now hangs under a cloud. Newswires, including
Bloomberg and WSJ, quoted "a person
familiar with the matter" saying that currency exchange
rates could scupper the deal.
The deal to build a new generation of SUV, to be shared
equally by Jeep (to replace the Compass/Patriot) and
Alfa Romeo, came in mid-January after a long and
bruising battle with unions to make sweeping changes to
working practices before Fiat management would make a
commitment to the future of the threatened plant. At
present, production at the vast Turin plant is just a
trickle.In the
end, after much negotiation, a slender majority of staff
(54.1 percent) voted to accept the company's terms and
Fiat unveiled bold plans to build 280,000 vehicles a
year, safeguarding the plant's future with a 1 bllion
euro investment - although no visible progress has been
made on the plans in the intervening six months.
This week, however, Fiat has indicated that, with most
of these new SUVs (a 'soft-roader' to be based on the C-Evo
Wide architecture) likely destined for North America,
the recent strength of the euro to the dollar has now
cast doubt on the viability of the plan. There may well
though be more to the story than just currency exchange
rates, as the fluctuations currently being experienced
by major global currencies mean it is virtually
impossible to predict the financial landscape by the
time these new SUVs reach production.
Some 280,000 SUVs a
year was always an ambitious target, especially as it
was claimed half of these would be accounted for by Alfa
Romeo. This would have been an impressive achievement
for a brand that completely missed the SUV boom and
currently has a cloudy future. It was, and remains, a
challenging task to hook buyers into the concept of an
Alfa-badged SUV.
With that in mind, a
50-50 split of the 280,000 unit projection was always a
remote possibility. It is thus logical that Jeep would
take the greater proportion if the two models wind up
being built Stateside. Fiat has consistently claimed
that Alfa Romeo will relaunch in the U.S., with the
latest proposed date now 2013. If this occurs - and it
is a big if - an Alfa-badged SUV might wind up finding
favour with buyers in North America. However, Jeep's
next-generation Compass/Patriot is expected to account
for most of its sales in its home market, and with the
off-road brand significantly less-well-regarded in
Europe than at home, it stands to reason that such a
competitively-priced model be built in the NAFTA region
Meanwhile, this week's news raises another big
question-mark over the historic Turinese plant's
long-cloudy future. The same reports this week suggest a
'subcompact' car could be built at the plant instead,
taking the place of the SUVs. However, with Fiat's
record at delivering on promises, let alone speculation,
there is a good chance this is likely to be 'official
spin' to accompany the softening-up of the bombshell
news which could ultimately prove to be a fatal blow to
the plant.
