The billionaire Agnelli family, whose car maker Fiat employed more than 170,000 people in the 1970s, were Italian industrial royalty for more than a century, courted by successive governments through incentives and favorable policies.
No more. This week, right-wing Prime Minister Giorgia Meloni attacked the John Elkann family scion and Fiat-Chrysler successor Stellantis – renamed after the group’s merger with France’s PSA in 2021.
His salvo was a cocktail of industrial policy and nationalist politics. He partly expresses his frustration at not being able to influence decision-making due to the lack of participation and seat on the board of directors, unlike the French government. But with the European elections approaching, Meloni was also exploiting voters’ fears about the risk of multinationals moving their jobs abroad.
“Challenges such as electrification and automation can only be addressed by large European groups, which motivated the creation of Stellantis,” said Valentina Meliciani, professor of applied economics at Luiss University. “But this does not mean that the Italian government should not be concerned about maintaining national production levels, both in terms of quality and synergies with the local supply chain.”
Exor, the Agnelli family holding group with assets worth 33 billion euros in 2023, owns a 14.2 percent stake in the Paris-listed automotive group, making it its largest shareholder and rights voting is expected to increase to 25 percent under the Stellantis regime. statutes. Fiat merged with the American group Chrysler in 2014.
“The group represents a very important part of the industrial history of the country and this means that we must have the courage to criticize the choices made by the management and its owners if they are far from the Italian national interest,” he said. Meloni said in Parliament on Wednesday.
Although Meloni’s government had previously attacked banks and “international speculators” for prioritizing profit over citizens, this was the first time it had directly attacked one of the largest industrial groups in the country.
Exor’s investments in Italy include luxury cars Ferrari and Maserati, agricultural equipment maker CNH Industrial, commercial vehicle maker Iveco, football club Juventus and media group GEDI, publisher of Italian newspapers La Repubblica and La Stampa. Exor is also the largest shareholder of The Economist magazine and last year took a 15 percent stake in Dutch group Philips.
With European elections in June, populist and right-wing politicians hope to win voter support by pledging to defend jobs and prioritizing Italian interests. “If you want to sell a car on the world market as an Italian jewel, then this car must be produced in Italy,” the Prime Minister said.
She then went further, claiming that the merger with PSA was in reality “a takeover by the French and it is no coincidence that a representative of the French government sits on the board of directors of Stellantis and French interests are more valued than Italian interests.”
Elkann Last year, it opposed direct investment by the Italian state even though France holds a 6.1 percent stake in the group through state-owned bank Bpifrance.
As in other Western countries, Italians blame falling labor costs elsewhere and the EU’s single market for industrial relocations and job losses.
Stellantis Chief Executive Carlos Tavares this week visited Sevel, the group’s export-focused van factory in the central Italian town of Atessa, the largest of its kind in Europe. “Italy spends much less money than any other major European country to support electric vehicles,” said Tavares, who has also been in conflict with the French government in the past.
“The consequence is that we are losing products manufactured in Italy.”
For example, at the Mirafiori factory in Turin, the Agnelli family’s hometown, some workers were laid off due to falling demand for the electric version of the Fiat 500.
Davide Chiaroni, professor of energy and strategy at Politecnico di Milano, said one of the problems was that the Fiat 500 was positioned as a premium model but performed below expectations. “Unfortunately, Fiat-Chrysler came late to the electric vehicle market, which is also the reason why PSA, which already had a strong electric vehicle platform, gained the upper hand through the merger,” did he declare.
At the time of the union, PSA also had much higher margins than the Italian-American group. But Fiat-Chrysler was larger, owned the highly profitable Jeep and Ram brands, and “could have negotiated a more balanced board composition,” Chiaroni said.
“Clearly, the presence of a representative of the French government on the board is useful when it comes to influencing decisions on where to invest and where to close factories,” he added .
Italy also has one of the lowest shares of electric vehicle sales in Western Europe, partly because its subsidies are less generous than France and Germany.
“Rather than subsidizing sales, Italy must support supply chain transformation,” Chiaroni said.
Italian companies have been relatively slow to transition to electric vehicle production, making their products less attractive to Stellantis, which hopes to sell 5 million electric cars a year by 2030. In the first six months of 2023, it has sold 170,000 electric vehicles.
Meloni said she wanted the group to increase its production of Italian vehicles to 1 million from the current 750,000. Stellantis produces 735,000 vehicles in France.
To combat Chinese competition, industry experts estimate that car manufacturers should sell small electric cars for between 12,000 and 15,000 euros. Stellantis said that to do so it would move production of such models from the EU to Morocco and Serbia, a choice that has irked politicians and alarmed unions. High-end cars would continue to be produced in Italy.
The conflict between Meloni and one of the country’s largest industrial groups could extend beyond car manufacturing. The center-left daily La Repubblica has been highly critical of Meloni’s policies, particularly his planned 20 billion euro privatization plan. The government claims that the newspaper’s editorial line is dictated by Exor.
“I will not let myself be lectured by a group that sold Fiat to the French and transferred its (Exor) headquarters to the Netherlands,” Meloni said in an interview on Mediaset television this week. Repubblica’s senior columnist, Massimo Giannini, echoed the management’s view when he said: “Journalists are not the editor’s useful idiots. »
Elkann, known for his discretion, has not commented on this dispute.
Chiaroni said Exor and the government ultimately needed each other, and that Meloni’s political posturing could serve to give Italy a “stronger voice on the Stellantis board.” without being part of it.
Additional reporting by Peter Campbell in London