The overproduction concerns the whole of Europe, or not?

sovracapacita

Do you remember the article of Marco Saltalamacchia “Move the metal, Jack!” after just one month since our launch?

Over time it has become a MUST!
A way to tackle the situation “taking the bull by the horns“, reaffirmed about a year later in the interview that was issued by the same author of the post.

The subject is the automotive production capacity in Europe. Subject often found in the statements of ALL European leaders, without exception!
But, in perfect AS style, we try to describe in simple terms and dissolving it in several steps.

It is clear that Europe is in a phase of overproduction compared to that which is structurally the domestic demand. The overcapacity of the factories is furtherly aggravated if one think that over the last decade the transportation costs have increased and, at the same time, also the advantages for those who produce outside Europe.
This aspect has reduced the convenience to produce in Europe to export to other continents. This situation has encouraged the creation of local plants rather than resort export, and not just for large volume models but also for some premium.

IMG_2671-001

IMG_2671-001 © IGM Bochum-Herne

The result is the manufacturing plants closures – this is the theme of the discussion – that has a significant social and economic cost because the industry is one of the most labor intensive; surpassed only by the steel industry which, however, is practically missing in Europe, compared to the ​​figures of a few decades ago.

clair et fort

clair et fort © Petit_louis

You will realize that it is only a political problem because there is not only the need to find the resources for those who are expelled from the productive world NOW, but there is the mandatory mission to find an alternative development model able to replace the employment levels that the automotive industries once covered.

The solution had to be found in the “times of the fat cows” (in times of economic prosperity), now that there is no money even for social safety cushions, it becomes really difficult. Unfortunately it is not a problem that can be postponed because all across Europe the plants are gradually closing … But all in the same way? Of course not!

There are companies that close the plants in a phased manner to ensure a chute to the elderly, while for younger people there are training and subsidies. This is to ensure the continuity of domestic demand, outplacement and protection of the employment.

fiat mirafiori

fiat mirafiori © The Bode

Other companies saw the increase of the benefits (fiscal, social security, financial) in order to avoid the closure (now)!

Other companies chose to take advantage of the public funding addressed to the electric mobility, accessing funds, help and support often at rates very close to zero, or simply through institutional support (national and European) aimed at overcoming the crisis.
In this context, how is moving forward Italy? Unfortunately do not move!

Throughout the supply chain, which represents approximately 1,200,000 employed and 11, 6% of the GDP (ie more than € 200MLD) is collapsing from all the points of view. Fiat in Italy produces more than it can sell (numerically), despite the closure of Termini Imerese and Iribus in the Irpinia land, in the total silence of the media.

I repeat!
At present there isn’t any structural decision by the institutions, and everything is delegated to the free private initiative … So while all of Europe tries to win the crisis, to reshape the industrial policy and the socio-economic context that will result from this “forced” restructuring, Italy (institutions, social partners and associations) leave it up to the private initiative. Initiative, which as private, doesn’t have primarily the social interest but, irony of history, is called just to affect that it.

Who benefits from this?
All the captains of fortune who want to have their hands free and those, Italian or not, who are making us becoming the colony of other countries… and I do not mean just the automotive market.

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5 Comments

  1. Robert Golebiewski says:

    Well, it is nothing new.
    I have posted article I found in american automotive industry magazine…100 years old.
    It is in Polish since I have paper version of it (I am automotive historian and collect such things) so I translated it.
    But use Google translator to get general idea of the solutions the guy from 1903 suggests… You will be surprised.
    Robert

  2. Robert Golebiewski says:
  3. Kennedy Samuel says:

    good article, in my opinion a larger work-force when employed stimulate the economy via a wider-cash circulation…Europe’s shrinking families is the main reason of its downfall. The investments made by setting up industries with higher production capacities or high yielding dairy-cows or processed foods, are all getting chocked due to non availability of consumers… and the export potential does not exist as made in Europe does not fit the poor economies and Europe’s relations with the Arab-world was never a bilateral one..

  4. Kennedy Samuel says:

    @ Kennedy Samuel:
    Kennedy Samuel wrote:

    good article, in my opinion a larger work-force when employed stimulate the economy via a wider-cash circulation…Europe’s shrinking families is the main reason of its downfall. The investments made by setting up industries with higher production capacities or high yielding dairy-cows or processed foods, are all getting chocked due to non availability of consumers… and the export potential does not exist as made in Europe does not fit the poor economies and Europe’s relations with the Arab-world was never a bilateral one..

  5. Sorry to be late, but we are working to change the themes of all our blogs…it’s a hard work!
    😉
    Well

    @ Robert Golebiewski:

    Like I asked to you, on our Linkedin Group of Automotive Space, we will be very happy, when it will be in english, to read and to discuss on this 1930’s article.
    Many thanks for your support!

    @ Kennedy Samuel:

    Thank to share my post and I am very happy that we have the same opinion. Good addition about Arab-world…this will do my post more complete.
    Thanks a lot!

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