News Column

Fiat Boss Denies Asking for EU Money to Close Plants

June 6, 2012
Sergio Marchionne
Sergio Marchionne

Fiat chief executive Sergio Marchionne on Wednesday denied ever suggesting that the European Union should provide money to help struggling carmakers close down unproductive plants.

Speaking as the chairman of ACEA, the European Automobile Manufacturers Association, Marchionne was reacting to press reports indicating that he had such a plan and that it was shot down by the German car industry, which has fewer overproduction problems.

"I have never, ever suggested that the payment for that restructuring (should rest) on anybody's shoulders other than the (car) companies," Marchionne said in Brussels.

But the Fiat boss acknowledged that "a (European) plan to redistribute overcapacity" would be "the easiest way to sell" plant closures.

Marchionne spoke at the launch of the CARS 21 report, the work of a panel comprising industry, governments, trade unions, consumers associations and environmental lobbies, which were called up in 2010 to advise EU policy.

What the report said on restructuring - which often involves shutting down plants and relocating them to where cheaper workforce is available - is that they "should not be resisted," but their impact should be "minimized" through "dedicated" social policies.

While industry experts say that Fiat, along with France's Peugeot-Citroen and Renault, have the biggest overproduction challenges, Marchionne made a point of stating that "a couple of plants are on the edge" also in Germany.

He also questioned the country's alleged superiority on engineering.

"Sometimes I am confused, I have yet to understand where is value of this engineering," he said, adding that Fiat-owned Ferraris win Formula 1 championships.

The CARS 21 report also said that EU emission standards, while "feasible," should be applied flexibly. But as a result, the bloc should "not effectively weaken the targets."

Under EU legislation, average car emissions should fall to 130 grams of carbon dioxide (CO2) per kilometer (g/km) by 2015, decreasing further to 95g/km by 2020. For vans, emissions should fall to 175g/km in 2017 and 147g/km in 2020.

Transport & Environment, a green group involved in the process, warned against any watering down of the standards.

"It's depressing to see that the German car industry is back to its old tricks, calling yet again for so-called 'flexibilities' to preserve a market for gas guzzlers," one of its researchers, Greg Archer, said.

But Marchionne dismissed suggestions - included in the report -- that meeting the targets would be cheaper than expected for the car industry.

"There isn't a single number ... that is deviating from the original cost" estimates, he said. "It may have been true for other car companies, it certainly wasn't true for us," he added, singling out in particular Euro 6 rules for diesel.

The CARS 21 panel also suggested continued EU loans for automotive research; a more assertive EU trade policy targeting non-tariff barriers affecting car exports; and a push for a single international regulatory standard for cars.

Marchionne complained about the "almost miraculous" inflow of cars from South Korea following last year's free-trade agreement with the EU, and urged Brussels to insist on appropriate safeguards during forthcoming talks on a similar deal with Japan.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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