When Fiat went to the Soviet Union

In November 1972, the VAZ plant (acronym in Russian for Stabilimento Automobilistico del Volga) was fully operational in Togliatti (a Russian city improperly known in Italy as Togliattigrad so as not to confuse it with the leader of the PCI, from which it had taken its name). Fiat had designed, built and delivered, turnkey, to the Soviet Union.

The production, started in 1969, will be, on an annual basis, of 600.000 cars, of which 400.000 Fiat 124 (saloon and family) and 200.000 Fiat 125, suitably modified by Fiat itself to face the climatic and infrastructural conditions of the Soviet territory, with a employment of about 60.000 workers.

With the management of the plant taken over by the Soviet authorities, the approximately 700 Fiat engineers and technicians who had participated for the first time in the Soviet Union, after the Second World War, in the creation of an industrial project to be part of a large western company, moreover an Italian one, at a time when the cold war was just hinting at reducing its contours.

The fundamental spring of the project wanted by Vittorio Valletta, the historic Fiat executive chief for over 45 years, was the desire to internationalize the image of Fiat itself, acquiring technologies in the West to expand the business to the East.

In fact, the dominant industrial philosophy of the time favored the supply of plants (and the subsequent rich market of ancillary orders, spare parts, etc.), also as an economic policy in which corporate interests converged with the mercantilist aspirations of the banking system.

In reality, commercial and economic relations with the Soviet Union had already begun in the XNUMXs, when Fiat commissioned an anti-fascist exile in France, the Turin journalist Oddino Morgari, to establish permanent commercial contacts with the Moscow government.

In the XNUMXs Fiat carried out the complete project for the construction of a large factory for the production of ball bearings in the immediate vicinity of Moscow and, before the outbreak of the Second World War, it completed the construction of another factory for light alloy castings.

In the mid-fifties, Valletta re-entrusted intermediaries with the task of restarting contacts with the Muscovite ministries, with a view to possible and profitable political and economic agreements between Fiat and the Soviet Union.

Thanks to these contacts, in 1961 the Turin company participated, together with Ansaldo, in an order for the production of a series of oil tankers, for which Fiat provided the engines, and in February 1962 the Soviet government announced the initiative to organize an exhibition of Fiat products, vehicles and production systems in Moscow the following spring. Fiat's work also opened up a series of international problems.

The "Professor", as Valletta was called, sensing the potential of contacts with the Soviet Union, probably also favored by leaders of the PCI, the largest communist party in the West, however did not intend to take specific initiatives without consulting the Italian government, but above all without first informing the Americans and obtaining their approval in principle.

In fact, Fiat had already established a special bond with the United States since the early twentieth century when, first among European companies, it had established an automobile plant in Poughkeepsie, in the state of New York, which remained in business until the outbreak of the Second World War. or had introduced the Taylorist work organization model learned from the Fiat engineers sent from Valletta to the Ford factories in Detroit on its assembly lines starting in the XNUMXs.

But above all it had continued in the 50s when, under indications and pressure from the American ambassador in Rome Clare Boothe Luce who had linked American aid under the Marshall Plan to containing communism in Italy, she had adopted a policy of isolating communist workers in their factories with the creation of the so-called "red star" departments. Having obtained the full support of Italian political circles, Valletta met President Kennedy at the White House in May 1962.

During the conversation, which projected him into an area of ​​great political importance and representativeness of Italy as a whole, Valletta (later appointed senator for life in 1966) noted the convergence of the President of the United States on the guidelines of the Fiat strategy, which provided assistance to the Soviets for the development of the production of consumer goods and in particular of automobiles. This interview was followed by further contacts with exponents of the American executive and the CIA itself.

Valletta also did not fail to probe the French industrial and political circles, who were also interested in the opening of that new, enormous market: it should be remembered that in those years Fiat France was the first foreign industrial group in France with its own automobile plants in the Simca, industrial vehicles by Unic and components by Magneti Marelli and Veglia Borletti. Following Soviet Prime Minister Kosygin's visit to Mirafiori, an agreement in principle was concluded in Moscow in 1965, focused on automobile production.

At this juncture, the city council of Turin, with a Christian Democrat majority, replaced, with a unanimous resolution, the name of one of the main streets, which from the city center leads to Mirafiori, from the Savoyard Corso Stupinigi to the current Corso Unionesoviet.

The general agreement was then followed in May 1966 by the signing in Turin of a protocol concerning the negotiations aimed at studying the project of a plant and the construction of the same in the USSR for the production of FIAT automobiles.

Thanks to the activity in Valletta aimed at consolidating not only a formal consensus on the part of Italian political circles, at the same time as the signing of the protocol, but this time in Rome, the agreement was signed between IMI (Istituto Mobiliare Italiano) and the Vneshtorbank ( the Soviet bank for foreign trade) for the financing of the entire operation for about 150 billion lire.

In addition to the contract, the Italian Government undertook to finance, if necessary, purchases to be made in third countries up to the amount of 50 million dollars.

On 15 August 1966 in Moscow the definitive agreement was therefore signed with the highest Soviet authorities for the design and construction of a turnkey factory for the production of Fiat cars to be built in the industrial area of ​​the Russian city on the Volga, which since 1964 had assumed the name of Togliatti.

The industrial project fully captured Fiat's aspirations to consolidate itself on markets greedy for progress also in terms of light industry (mechanics in particular), in order to create solid bridgeheads before the most reputed European competitors (Germans and French in particular) , and together it responded best to the political ambitions of returning to the international scene as protagonists (using the economic leverage of a capitalism regenerated from the boom period of the first half of the sixties).

From here, at least in the planning phase of the project, a close agreement and continuous harmony with the political and monetary authorities of the country, in addition to the acquired consent, as already mentioned, of the Americans.

Valletta's idea, tenaciously cultivated since the early XNUMXs, appears to be that of leveraging the automotive product, then the fulcrum of a strong vertical integration (from the iron and steel industry to the various mechanics), to stimulate a progressive internal capacity of the company to diversify, bringing to maturity multiple design skills - on fronts connected to each other - and the consequent organizational and implementation aptitudes.

The car was therefore for Valletta the driving force of a multipurpose Fiat engineering, capable of leading it to first possess and then dominate a wide spectrum of technologies: metallurgical, plant engineering, engineering.

From this derives the working hypothesis, perhaps also the bet, cultivated with the USSR Project, of subjecting the entire Mirafiori complex to a double tension: to produce marketable and exportable plant engineering parallel to a conspicuous increase in renewal and automation on the internal product and traditional, precisely the automobile, fertilising all the synergies arising from this crossing of attentions and tensions.

Valletta, after motorizing Italy first with the Balilla and the Topolino and then with the 500, 600 and 1100, however, did not see the results of his last challenge: in fact he died on 10 August 1967.

But in reality what were the costs and benefits, also in terms induced and subsequent to the implementation of the Project itself in the USSR? Despite the absence of absolutely conclusive documentation, the certainty of an unsatisfactory result soon spread on the income statement of the project in the following years, even if this type of result had probably already been partially imagined or foreseen from the outset.

In positive induced terms, there is no doubt that the experience of designing and building a green field of an automobile plant, the last one being Mirafiori in the mid-XNUMXs, allowed Fiat to acquire and consolidate the technological and plant engineering not only for the construction, in the late sixties and early seventies, of its factories in southern Italy in Cassino, Termoli, Sulmona or Bari, but also for the sale of technology to Italian and foreign competitors such as, for example, the design and sale to IRI of the bodywork, painting and assembly systems of the then building plant in Pomigliano d'Arco of the State-owned Alfa Romeo.

The induced cost, with a deeper impact, even if not immediately felt, was instead that of having excessively spread the "monolithic" set of Fiat resources and energies (in a certain sense its original industrial mission), polarizing the best and for a long time on the Soviet project, to the detriment of a balanced and constant growth of range management, amply necessary on the threshold of the critical XNUMXs, while the automotive world and especially direct competition was preparing new products and was disposed to a market without more fences.

Once the load of internal resources was unbalanced in favor of this project, the inertial impact - also due to the meticulous and onerous obligations referred to in the technical clauses of the agreement with the Soviets - was such in the seventies that it was not possible to remedy them until medium/long term, while the strategic change of the automotive industry had already begun.

It will be necessary to wait for the early eighties for Fiat to recover the range and market gap with the launches of the Uno, the Thema and the Fire1000 engine. Finally a curiosity.

In August 1968 many areas of Turin (the city centre, the Valentino Park, the Lungo Po) were transformed into film sets for the shooting of an English film "The Italian job", directed by Peter Collinson and starring Michael Caine, which tells of a British gang on a trip to Turin to steal 4 million dollars in gold bars from Fiat from China (and not from the USSR) as an advance on a colossal contract for the construction of an automobile plant in that country.

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