Italy: whilst Penske is arriving, Marchione is… departing?

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With trumpets and drums Mr. Rob Kurnick announces the landing of the Penske Group into the land of Fiat: “In Italy the economy is recovering and there are opportunities to grab!”

A few days ago the associations of Dealers and Manufacturers – Federauto and Unrae – had spoken a “bit differently” regarding the dramatic situation of all those spitting blood in the italian automotive: fearing the loss of 15,000 jobs in dealerships and 200,000 in the entire segment.

In Italy, traditionally, the Sales Business is seen by the Dealers as the success driver for the dealerships: Service and F&I Business are only a secondary priority; potential for the dealership remains totally unused, except in few well organized dealerships.

It is interesting to notice that the successful Penske Group gains significant profits precisely through Service, Spare Parts and F&I: journalists reported that they generates 60% of the total profit! In Italy the Dealers have something new to learn staring to the activities developed by Penske Group!

The incongruity is: whilst Penske is arriving with good perspectives, is Fiat… departing?

Yes, in utter silence of media, press and associations, the spokesman of the “Marchionne’s boys” and the Unions announced that they have signed an agreement for 18 months of extraordinary temporary layoff for 5,315 workers (4,863 workers, 362 employees and 90 managers), from April 2nd 2012 to September 30th 2013 at the carmaker’s Mirafiori factory in Turin. For the sake of decency it was avoided by April 1st, Fools’ Day!

This happens in the meanwhile at VW, BMW, Daimler and Volvo they are recuitinghundreds of thousands of new workers!

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The Italian Premier Mario Monti – forgetting the whole lot of money given to Fiat in social safety nets – immediately after his meeting with Marchionne said: “Who runs the Fiat has the right and duty to choose the most cost effective solutions for its investments and for its localization”. Yes: words that justify the closure of the italian plants (Arese, Termini Imerese, Irisbus) and this new layoffs paid by the Italian citizens.

So different has been the attitude of President Obama who did everything to save the national pride and the treasure that stays inside the American Automobile Manufacturers and into their Human Resources.

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Reuters, Ansa and other agencies give conflicting versions: one speaks of restructuring of the production in view of new Suvs branded Jeep – even though I never have seen no manufacturer in the world that has ever stopped production or “temporarily laid off” more than five thousand people before the revamping of a plant or at the launch of new models. But even Marchionne in a interview (La Repubbica) speak openly of the dramatic slowdown of Fiat in sales in the Italian car market, the worst results since 1990!

Layoffs at Fiat are not a scoop, however this cold shower it requires some thoughts, because it helps to realize the size and severity of the situation. Today we are obliged to consider that the Human Resources involved are not only ‘blue collar labourer’, but even employees, managers and executives of all sectors of the Company, even those interacting with the delicate area of distribution and sales network, namely the persons which interfaces with the Fiat customers!

That same network of dealers who – for months – have already developed huge sacrifices for a better future of the Fiat brand.

The same dealers which the vast majority of them are working  without a Letter of Intent for the renewal of the Dealer Contract, after the cancellations sent to the whole Fiat-Alfa-Lancia-Jeep network waiting for the new BER Regulamentation.

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 “When the going gets tough, the toughs get going”. We wish good luck to the Penske Group: we share our best wishes for their really ambitious project, even if the assumptions of the italian market regarding growth at the moment are… zero!

Gasoline at the pump is 10US$ per gallon, and even Marchionne pointed out that March it has been even more dramatic than the first two catastrophic months of 2012, with a fall of 40% in registrations!

Maurizio Sala & Emilio Perri

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4 Comments

  1. A Friend from San Diego wrote:

    … “I read the article, very interesting. Did you also read the NADA news today? There is an atricle which discusses the total merger of Fiat & Chrysler. To be more specific the complete aquisition of the Chrysler, by Fiat.
    That leaves one to question exactly which country will be the major manufacturer?
    Also, having followed labor union activities I see many possible scenarios to the issues of costs… more robotics, fewer people? Or, which union has more pull when it comes down to worker retention? There are a lot of complexities here. It certainly is exciting!”

    Great comment!

    Please read the NADA newsletter article and… let’s have your thoughts!

    http://www.detroitnews.com/article/20120406/AUTO0101/204060338/1121/AUTO01/CEO–Fiat-pursues-100–of-Chrysler

  2. Shirish Jadhav says:

    Innovation and design will happen at us/eu. China, brazil and east-eu will manufacture entire Automotive requirement of the world. India will keep all the records as a back office support thru software products.
    Smoke stag industry will be so called “developing countries” where liability/legal costs will be minimal.

  3. Giovanni Bravin says:

    I have really appreciated the photo of the area of former Alfa Romeo plants.
    It seems that few people, except Alfa Romeo workers, know the real situation in Arese.

  4. @Shirish.

    I believe that ALL the countries need the ‘smoke stag automotive industry’, even Italy, US, India.

    What you think about the reality of the German automotive industry? This is not properly a ‘developing country’… nevertheless, they preserve and defend with proud the patrimony of their automotive industry!

    @Giovanni.

    This is what you can see at the moment in the Arese plant.

    Yes! This is the truth: only a few people know the real situation of the brave italian FGA workers/employees/managers forgotten by the italian media.

    Or the real situation of the stunning Alfa Romeo Historical Museum, closed 14 months ago in the total silence of the italian and world press!

    http://www.automotivespace.it/eng/auto/appeal-to-all-the-alfista-save-our-heaven/

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