What is next for Fiat? 0

Fiat is currently experiencing troubles in Italy following a strike by lorry drivers. Although the strike is directed towards the Government, it appears that Fiat is the ones who are suffering from their action.

Car production in trouble

The strike involves the rising cost of fuel which many are finding hard to keep up with. In effect Fiat are finding it very difficult to deliver cars to their customers. Production has also been slowed down with part shortages making it difficult for the continuation of car production.

Fiat to take a stand

Fiat has decided to take a stand and involve themselves in the argument. Sergio Marchionne, Fiat’s Chief Executive along with Fiat’s Chairman John Elkann have arranged to meet the newly installed Italian Prime Minister Mario Monti in order to discuss Fiat’s future.  Fiat is clearly looking to retaliate against Union bosses to find a solution that suits them and stop the strike.

Local production could be shifted

The Italian economy is not in the best shape at present. The current strike is affecting exports in the country which has in effect damaged the business of many car manufacturers. Fiat want to continue their business in their homeland of Italy by producing cars locally. This is not possible if the company has obstacles to overcome regarding the export market.

The United States an option

The Italian economy would be in more trouble if Fiat were to move car production to other countries. Already Fiat have moved some production to Poland. They are promising to shift it back to Italy if various labour agreements can met with the Government. If production was to be moved, it has been suggested that Canada and the United States are the countries of choice. Fiat is in partnership with American car brand Chrysler. Chrysler has plenty of spare space in their factories for production which has been well documented. This would seem like the logical choice if production was to be shifted to another country.

Following these statements from Fiat, the company have faced backlash from the Italian Government, who see the company’s statements as a threat.

Fiat know that they are about to face a very difficult period as the European car market is currently is in decline. Sergio Marchionne has recognised that the Euro Zone crisis means that mass car producers must find an export market outside of the region.