The billionaire Agnelli household, whose carmaker Fiat employed greater than 170,000 folks within the Nineteen Seventies, was Italian industrial royalty for over a century, courted by successive governments by way of incentives and beneficial coverage.
Not anymore. This week, right-wing Prime Minister Giorgia Meloni attacked the household’s scion John Elkann and Fiat-Chrysler’s successor, Stellantis — rebranded after the group merged with France’s PSA in 2021.
Her salvo was a cocktail of commercial coverage and nationalist politics. It partly expressed frustration at not having the ability to affect decision-making over an absence of a stake and board seat, not like the French authorities. However, with European elections on the horizon, Meloni was additionally tapping into voters’ fears concerning the threat of multinationals relocating jobs overseas.
“Challenges like electrification and automation can solely be confronted by large European teams, which was the rationale for creating Stellantis,” stated Valentina Meliciani, professor of utilized economics at Luiss College. “However this doesn’t imply the Italian authorities shouldn’t be nervous about sustaining home manufacturing ranges each by way of high quality and synergies with the native provide chain.”
Exor, the Agnelli household holding group with property value €33bn in 2023, owns a 14.2 per cent stake within the Paris-listed automotive group, making it its single largest shareholder and its voting rights are set to develop to 25 per cent below Stellantis’ bylaws. Fiat merged with US group Chrysler in 2014.
“The group is a vital a part of the nation’s industrial historical past and it means one will need to have the braveness to criticise decisions made by the administration and its house owners if they’re removed from the Italian nationwide curiosity,” Meloni instructed parliament on Wednesday.
Although Meloni’s authorities had beforehand attacked banks and “worldwide speculators” for prioritising revenue over folks, this was the primary time she had immediately taken intention at one of many nation’s largest industrial teams.
Exor’s investments in Italy embrace luxurious automobiles Ferrari and Maserati, agriculture tools producer CNH Industrial, business car maker Iveco, soccer membership Juventus and the GEDI media group, the writer of Italian newspapers La Repubblica and La Stampa. Exor can be the biggest shareholder in The Economist journal and final yr took a 15 per cent stake in Dutch-based group Philips.
With EU elections in June, populist and right-wing politicians hope to safe voters’ assist by vowing to defend jobs and prioritising Italian pursuits. “If you wish to promote a automotive on the worldwide market as an Italian jewel, nicely, then, that automotive should be produced in Italy,” the prime minister stated.
She then went additional, saying the merger with PSA was really “a takeover by the French and it’s not by probability {that a} consultant of the French authorities sits on Stellantis’ board and French pursuits are valued extra extremely than Italian ones”.
Elkann final yr pushed again in opposition to a direct funding from the Italian state whereas France owns a 6.1 per cent stake within the group by way of state-owned financial institution Bpifrance.
As in different international locations throughout the west, Italians blame decrease labour prices elsewhere and the EU’s single marketplace for industrial offshoring and job losses.
Stellantis chief government Carlos Tavares this week visited Sevel, the group’s export-focused van manufacturing facility within the central Italian city of Atessa, the biggest of its type in Europe. “Italy is spending a lot much less cash than every other nice European nation to assist electrical automobiles,” stated Tavares, who has additionally clashed with the French authorities prior to now.
“The consequence is that we’re shedding manufacturing merchandise in Italy.”
For instance, on the Mirafiori plant in Turin, the Agnelli household’s hometown, some staff have been furloughed because of waning demand for the Fiat 500’s electrical model.
Davide Chiaroni, professor of vitality and technique at Politecnico di Milano, stated one drawback was that the Fiat 500 was positioned as a premium mannequin nevertheless it underperformed expectations. “Sadly, Fiat-Chrysler was a latecomer to the EV market that can be why PSA, which already had a robust EV platform, gained the higher hand from the merger,” he stated.
On the time of the union PSA additionally had a lot greater margins than the Italian -US group. However Fiat-Chrysler was bigger, owned the extremely worthwhile Jeep and Ram manufacturers, and “might have negotiated a extra balanced board composition”, stated Chiaroni.
“Clearly, the presence of a French authorities consultant on the board is useful on the subject of influencing selections on the place to speculate and the place to close down vegetation,” he added.
Italy additionally has one of many lowest shares of electrical car gross sales in western Europe, partly as a result of its subsidies are much less beneficiant than France and Germany.
“Reasonably than sale subsidies, Italy must assist the provision chain’s transformation,” stated Chiaroni.
Italian firms have been comparatively sluggish to transition to EV manufacturing, making their merchandise much less interesting for Stellantis — which hopes to promote 5mn electrical automobiles yearly by 2030. Within the first six months of 2023, it offered 170,000 EVs.
Meloni has stated she desires the group to extend its Italian car manufacturing again to 1mn from the present 750,000. Stellantis produces 735,000 automobiles in France.
To fend off competitors from China, trade consultants say carmakers ought to promote small electrical automobiles for €12,000-15,000. Stellantis has stated that to be able to do this it might transfer manufacturing of such fashions from the EU to Morocco and Serbia, a alternative that has riled politicians and alarmed unions. Greater-end automobiles would proceed to be produced in Italy.
The spat between Meloni and one of many nation’s largest industrial teams might prolong past automotive manufacturing. Centre-left-leaning day by day La Repubblica has been extremely important of Meloni’s insurance policies, together with a deliberate €20bn privatisation plan. The federal government has claimed the paper’s editorial line is dictated by Exor.
“I can’t be lectured by a bunch that offered Fiat to the French and moved its [Exor’s] headquarters to the Netherlands,” Meloni stated in an interview with Mediaset tv this week. Repubblica senior columnist Massimo Giannini echoed the administration’s view when he stated: “Journalists aren’t the writer’s helpful idiots.”
Elkann, who is understood for his discretion, has not commented on the spat.
Chiaroni stated Exor and the federal government in the end wanted one another, and Meloni’s political posturing would possibly function a technique to give Italy a “louder voice on Stellantis’ board with out being on the board”.
Further reporting by Peter Campbell in London
