TURIN, Italy — Fiat confirms it is making a purchase offer for Carrozzeria Bertone, the well-known Italian coachbuilder that has fallen on hard times. However, a Fiat spokesperson tells Inside Line, "We are not interested in the Bertone brand or company, only in the Grugliasco production facility and work force."
There are currently six active offers on the table for Bertone assets. The one from Fiat for the long-idle Grugliasco manufacturing complex is the latest, made public on July 14. Others include an offer to buy just the brand Bertone by founder Nuccio Bertone's wife, Lilli, two separate offers by Italian entrepreneur groups to buy all Bertone assets, and a similar all-or-nothing offer from an unnamed Spanish group and the Chinese company First Auto Works (FAW). A year and a half ago, Fiat made an offer to buy Bertone as a whole for a mere €100, or approximately $150 at the time.
Spokespeople close to the dealings tell IL that the winning bid or bids for Bertone could be decided by the Turin courts by the end of the week or early next week.
Besides the basic business of finding buyers for Bertone assets, there is the much more complex side of getting the unions involved to approve. Whereas in North America the unions have only so much pull these days and are fairly willing to compromise for the greater good, Italy is fundamentally still governed by the worker unions, and they do not take change lightly.
The log-jammed and wary Italian union tradition has come into direct conflict with the new Fiat under Sergio Marchionne, as Fiat wants more and more to operate as big global companies do in the United States and elsewhere, moving swiftly and forming mergers and acquisitions and frequently needing to cut jobs in the process.
One union leader in Italy made the point clear: "We're all in favor of this offer from Fiat in the general sense as it is the strongest offer yet made. But we have yet to see whether Fiat means to play the Grugliasco facility and its 1,200-strong workforce off against the Fiat Mirafiori main plant. Do they have enough new products coming to keep all of this going? Or will one cannibalize the other eventually?"
Fiat does have a history of company take-overs in Italy. Handed Lancia in 1969, Fiat eventually shut down the main Lancia plant in Chivasso in 1992 and reassigned the labor force. Fiat also absorbed Autobianchi in the late 1960s and closed the marque's main Desio factory in 1991, cutting many jobs through redundancies. Fiat was given the Alfa Romeo brand in 1986 and effectively mothballed the company's huge Arese complex starting in the early 1990s; major labor disputes continue to the present day. Arese keeps a skeleton crew of fewer than 500 workers under government subsidization.
Another union captain notes that Grugliasco has a "theoretical capacity of 150,000 vehicles per year, and Mirafiori produced a total of 140,000 units in 2008. These are scarily coincidential numbers to try and explain away. And does Fiat intend to invest in the Italian and Turin work force?"
It's worth noting that the hot-selling Fiat 500 is built exclusively at the Tychy plant in southern Poland, along with the Fiat Panda.
The Fiat Mirafiori work force has held multiple strikes recently, in no small part due to the effect on local jobs of boss Sergio Marchionne's hunger for shopping the world for bargain basement assets. Strikes are frequent at Fiat's Termini Imerese factory in Sicily as well. Fiat has announced the end of car production there in 2012, promising a retooling for non-body-in-white production needs. Given Fiat's history, the workers are not convinced.
Inside Line says: The effect of Fiat's actions on Italy's economy will be complex and sticky, in time-honored Italian-family style. Whether it will affect Chrysler remains to be seen. — Matt Davis, Correspondent
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