Reuters also notes the unbalanced relationship between Stellantis and the Italian state

Even the international media are realizing how the relationship between Stellantis, former FCA and former Fiat, is now based on banal blackmail, making explicit what many Italians think has happened in the last 40 years between automotive groups and the Italian state. All of which can be summed up in one sentence: “Give up the money or I'm leaving” .

As even Reuters reports, the recent war of words between Italian Prime Minister Giorgia Meloni and Stellantis CEO Carlos Tavares has highlighted a new and harsh reality: European car manufacturers, once linked to nations, have become global players ready to exploit the overcapacity of EU car plants to obtain better government deals, i.e., simply, money and favors.

Stellantis, born from the union of the French manufacturer Peugeot PSA, the Italian Fiat and the Chrysler of Detroit, represents practically the entirety of Italian automotive production. Fiat's production is declining due to stagnating sales in Europe and Stellantis has moved production to other countries in its vast global network, despite the Italian state having paid €220 billion over 40 years to Fiat, now part of Stellantis . Gratitude is not part of the DNA of multinationals.

Stellantis' capacity utilization rate at its European factories stood at 56% last year, down from 64% in 2019 and well below Volkswagen's 71%, according to GlobalData data provided to Reuters. Car manufacturers aim for a production capacity utilization of at least 80%.

Stellantis is exploiting its excess production capacity to obtain subsidies and political support from Rome and the governments of other countries. In the United States, state and federal officials have offered subsidies to convince Tavares not to close a Jeep plant in Illinois, which will now be used to build a new midsize pickup that fills a gap in the U.S. company's model lineup.

Justin Cox, global manufacturing director at GlobalData, told Reuters that the world's third-largest automaker has so far allocated the majority of Europe's electric vehicle production to France. The company's North American operations in Jeep trucks and SUVs generate the majority of the group's profits. Stellantis will report its 2023 financial results on Thursday.
“You can understand why Italians are angry … Italy has a lot to lose,” Cox said. “All of their volume production is tied to Stellantis.”

On paper, France and Italy appear to be on perfect parity within the Stellantis production system. In 2023 Stellantis built 735,000 vehicles in France and 750,000 in Italy.
But Stellantis is the only major Italian car manufacturer, while France can also count on Renault and is supported by a greater number of future EV models. According to AlixPartners, Italian car production last year was around 800,000 vehicles, compared to 1.5 million units in France. Italian officials asked Tavares to bring Fiat production back to 1 million vehicles a year. Meloni criticized Stellantis' decisions in nationalistic terms.
Meloni said in Parliament that the “alleged” merger that created Stellantis “actually masks a French takeover”. And he added: "It is no coincidence that the industrial choices of the group take the interests of France into greater consideration than those of Italy."

Tavares – who made Stellantis one of the most profitable companies in the sector – replied that the automaker “is not afraid of the 1 million milestone…”. But let's not forget that it always depends (on) the size of the market."

Tavares and Stellantis president John Elkann, scion of the Italian Agnelli family, have begun talks with the Meloni government. The company said Rome must do its part to support increased production: offer incentives to consumers to purchase electric vehicles, lower energy costs and encourage the development of the electric vehicle charging network.

Earlier this month, Italy launched a new incentive for car purchases, worth 950 million euros ($1 billion) this year. It's a shame that Italians don't have money to buy new cars and that, in any case, they have minimal trust in electric cars: in 2023 EV cars constituted only 4.2% of sales , despite the incentives, and the electricity grid, equal to the French one, it has little to do with it.

France is a major investor in Stellantis with a 6.1% stake through state investment bank Bpifrance and has a representative on the board of directors.
Italy is not present in the group, but Industry Minister Adolfo Urso said Rome is open to buying a stake.

“Product allocation does not depend on governance,” said Francesco Zirpoli, a management professor at the University of Venice, who notes that Stellantis, and PSA before it, have always produced many cars in Spain. Urso also proposed giving incentives only to cars produced in Italy, even if this would not be operationally simple: what about the components? Would such a rule be compatible with EU regulations?

Here the sensational mistake, wanted by the privatizers of the time, of selling Alfa Romeo to Fiat is revealed, instead of keeping it public or selling it, perhaps partially, in participation, to other international groups. At the time, Ford was the one to boast, but the group which, at the time, was Agnelli was preferred. A sensational mistake, as would buying shares of Stellantis. The way would be to help Italian start-ups, also with legislation that favors the development of small automotive production, instead of large groups which, in the end, turn out to be only large international blackmailers.

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The article Reuters also notes the unbalanced relationship between Stellantis and the Italian state comes from Scenari Economici .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/anche-reuters-nota-il-rapporto-squilibrato-fra-stellantis-e-stato-italiano/ on Mon, 12 Feb 2024 10:00:51 +0000.