Dear President Meloni, the European car is dead, there is no need for subsidies. Word of former Fiat top manager
Melancholic reflections on the auto sector in the letter that the former top manager of the Fiat group, Riccardo Ruggeri, sent to Giorgia Meloni
Dear Giorgia Meloni,
from the height of my ninety years, spent for seventy in the world of the "wheels" business and for twenty in that of publishing, I allow myself some advice (unsolicited, since we don't even know each other): stay away, and keep the savings of us citizens away from the world of cars. Today it appears to be a mousetrap.
For a hundred years the car industry has been a high profile and nobility business, with legendary top figures. Today, however, at its top, as at the top of Western politics, there is a high concentration of inept or scoundrels (I confess that I struggle to distinguish them, they are all so elegant, with such fluent English!).
They have allowed Xi Jinping's China to become, with a few strategic moves, absolute master of the game. They have transformed our state and private institutions either into beautiful figurines (Ursula von der Leyen) or into puppets (Politicians-Shareholders-CEOs-Unions). They remind me of the dancers of the Nuo ritual dance, a ballad that the Chinese practice to ward off evil spirits, that is, all non-Chinese.
Over the last twenty years, I have written a lot about FIAT: several books, around fifty articles, various interviews. I told in 2009 how FIAT Auto had technically gone bankrupt, when its "corporate bonds" were certified "junk" by Moody's. And also how Chrysler had gone bankrupt, certified by the legendary Chapter Eleven. Thanks to Barack Obama, and his mentor Sergio Marchionne, with the money of American taxpayers (part non-repayable, part to be repaid) the two bankrupts merged and FCA was born, saving the assets of both shareholders and the unions' pension fund Americans. This is how FCA was born, and at least for me it was already clear how it would end. And I wrote it. Nothing to add.
President, allow me a personal reflection: the fate of the "European" car industry has been sealed for some time, it is useless to waste money on incentives (a tweet of mine in unsuspecting times: "Subsidying a market that doesn't exist is simply a rubbish"). Much less enter into the capital of a business where the global leadership is Chinese.
In fifteen years they have taken possession of the entire strategic-logistics chain, they have absolute dominion over rare raw materials, product development, product-market innovation, components, etc. And at the same time they invest heavily in nuclear power and energy renewable. All moves, impeccable, like a true world leader. And the former automotive big names? They will gradually be demoted to followers.
It is not clear, even from a technical point of view, how we can compete with the Chinese when we have handed over our business model to them. Since there is no longer an Italian car industry, I understand your concern to save the certain number of Italian jobs that still exist in the surviving screwdriver factories. Right! But ask yourself: are they structural or residual jobs, therefore with a destiny already marked at the time of the birth of Stellantis, kept alive only thanks to a perpetual CIG?
When sales of industrial groups of this size take place, and with strong social implications in the seller's country, it is customary to obviously take them into account when negotiating the definition of the price and the (confidential) shareholder agreements. I imagine that by then a suitable, appropriately priced transition strategy will also have been designed. Thus the two key shareholders will have given their CEO Carlos Tavares the "rules of engagement" and the budgets to complete both the restructuring and the new strategic repositioning. It is obvious that the closer the moment of truth gets, the more the leaders are ready to do anything to defend the stock market value, from which dividends derive for some, bonuses and stock options for others.
It is possible that in the future the French themselves will be forced, again in the name of economies of scale and of now being China's followers, to think in terms of new scenarios, new mergers, ergo new painful restructurings, therefore Stellantis with Renault and maybe even with Volkswagen? How is it possible to think that a third country would invest in a business with such prospects and in continuous "strategic upheaval" to survive? Do we want to go back to the famous phrase of yesteryear "privatize profits, socialize losses"?
Dear President, my long experience in complex businesses and my age have taught me that when a CEO of Carlos Tavares' caliber speaks, his words must be considered stones. In business, never experience a declared (desperate?) "falling point" as "blackmail". In such an embarrassing context, and incomprehensible to normal people, it is better to stop, hold onto the purse strings, and wait for the fog to clear.
Best regards,
Riccardo Ruggeri
Post Scriptum. I am sending you, in digital version, the book "FIAT, a love story (finished) where I tell, from a bird's eye view, with the ferocious sincerity typical of a lover, the five key moments of post-war FIAT:
The Empire 1947-1966
Villainy 1967-1980
Cowardice 1981-1995
The confusion 1996-2004
The wait for the end of 2005-2014.
In light of what happened after 2014, and what is happening, the book today is no longer an essay on business and management, but a daguerreotype of a world that once was: a true love story within the walls of a workshop with a wooden floor and the acrid smell of used lathe oil.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/cara-presidente-meloni-lauto-europea-e-morta-non-servono-sussidi-parola-di-ex-top-manager-fiat/ on Sun, 11 Feb 2024 07:15:16 +0000.