But wasn't it the case to speed up the production of the new Punto instead of betting one's cards on a new version of the 500? Olivier François, head of Fiat marketing, looks at Marchionne, then replies as follows: “I think I can interpret my boss's thought: this is the ideal moment to not do bullshit. Sorry, but I can't find a more suitable term…”. Marchionne, seated in the third row next to Gian Luigi Gabetti (in top form), laughed heartily. And he also appreciates the final coup de théatre: for a few seconds, at the back of the stage, the silhouette of the 500 X can be glimpsed, the seven-door which, if things go smoothly, will be produced on the Mirafriori lines at the end of 2013. But at the same time current state that car is what it appears on stage: a mirage, or little more.
It is in this context that the CEO of Fiat and Chrysler launches his lunge, reiterating known things but with final accents because times are short. “Certain things – he says – should have been done yesterday”. Meanwhile, there are two new facts:
A) Fiat exercised the call on 3,3% of Chrysler, thus rising to 61,8%. It is only the first step, because Lingotto intends to exercise the remaining options and then proceed with the purchase of the entire Chrysler. When? "Definitely before 2016. I would like to underline that Fiat already has the money needed for the operation".
Meanwhile, Chrysler's growth continues at full speed: operating profit already this year will exceed 3 billion, the target of 2,8 million cars by 2014 is likely to be reached next year. “We are at the limit – explains Marchionne – Even if he knows that the third shift started at Jefferson North this week and we will have the plants working at full capacity from Mexico to Canada”.
B) This is where the second novelty comes in. This morning Fiat will present its appeal against the sentence of the court of Rome which requires the hiring of 145 Fiom members. Beyond the legal and union battle, “which I'll leave to the lawyers”, Marchionne is keen to underline that: 1) “The offer to use Italian plants to produce on behalf of the Chrysler customer is more topical than ever. But nothing will be done until there is the necessary Italian tranquillity. The right to do business belongs to Fiat”; 2) in the absence of this agreement between Fiat and Chrysler, "given the situation of the European market, at least one Italian plant out of four is too many". Could it be Mirafiori? "With this market - replies the CEO of Fiat - I do not intend to make any commitments".
The analysis of the Lingotto on the market is clear. “The crisis in demand – explains Marchionne – is destined to last for another 24-36 months”. But it's not just a question of volumes, but of prices. "In these conditions of competition on price lists, which benefit consumers but are unsustainable for producers, it would be a mistake to launch new models". For now, no steps have been taken to reduce production overcapacity in Western Europe. Hence the conclusion: either we work for the "US customer", i.e. Chrysler, or we proceed to cut at least one factory in Italy.
But the "US customer" is none other than Marchionne himself, who does not intend to give Fiat discounts in Europe, let alone in Italy. “Chrysler – he insists – asks to buy at market conditions”. A question of prices, but even more of the reliability of the plants, which must be able to guarantee the "customer" the same production flexibility as the rest of the market. And it is no coincidence that Marchionne refers to the contract that the British Unions signed with GM for the Ellesmere plant, where part of Opel production will move. “Read that contract – Marchionne insists – There are 51 weeks of work per year, three shifts plus the obligatory Saturday at the request of the company. These are the conditions practiced on the market”, from which Fiat does not intend to derogate. “But I – concludes Marchionne – continue to work for a positive project. Don't make me say that I want to close a plant".
Mirafiori, in short, remains suspended between the "mirage" of the new product and the sword of Damocles of closure. Yesterday, on the occasion of the presentation of the 500 L, originally conceived for the Turin plant and then diverted to Kragujevac, Serbia (“where we enjoyed a series of advantages” acknowledges the CEO), it was noted the absence from the party of John Philipp Elkann, the chairman of Exor. This is not a positive sign: in the history of Fiat, when the most serious moments approach, it is good practice for the controlling shareholder to withdraw.
