Public to revolt if government assists FIAT
January 27, 2009 by Matt Brogan
To ensure Italy’s car manufacturers do not fall behind the rest of the world Prime Minister Silvio Berlusconi has proposed a package of “assistance that would not be costly for the state”.
But right-wing Italian cabinet minister Roberto Calderoli said there would be a popular revolt if Fiat is given government help, especially in light of the decision for FIAT to form a strategic partnership with US manufacturer Chrysler.
“There would be a popular revolt if once again we were to give aid to FIAT,” said Calderoli on RAI (an Italian state television channel), “We have already paid up to intervene in FIAT so many times and you can’t keep sharing the debt and keeping the profit.”
Last week, FIAT said 2009 would be its “toughest year ever” and revealed a debt pile three times its forecasts. Faced with a dramatic drop in sales, the Italian manufacturer has temporarily shut down plants across the country and suspended thousand of workers.
Prime Minister Berlusconi has called further talks with auto industry associations tomorrow.
Print it: 
Fiat to avoid going under have reached out to a life raft named Chrysler, only to discover the life raft is a boat anchor, and will quickly drag them down.
Why would it? This deal with Chrysler is not costing them anything in terms of money?
Well most if not all other auto-makers around the world are getting a GovCo assistance in these tough times.
Sure, give FIAT the money, BUT they MUST pay it back when the times are good again.
Only fair!
Cheers
F-0
I don’t see how FIAT can lose anything from this partnership?
They didn’t spend a cent for the 35% of Chrysler it was a direct exchange with FIATS product range. This venture can only be good for FIAT if things work out over there. If they don’t then FIAT simply packs its bags and goes back to Italy.
Maybe the funds given by the government should come with a condition to only be spent in Italy.
This BAIL_OUT will be known in a decade or so as the biggest rort in the history of mankind.
So much taxpayers money will end up in private hands shareholders pockets that lot of people will turn out very rich, very quickly, while the car company workers and the similar sorts this is suppose to help will end up poor and probably unemployed anyway.
It does seem strange that Fiat, despite still posting quite substantial profits (~$US360million last quarter, even as revenue tanked 44%) would need any government assistance. Fiat is far from ‘going under’, its deal with Chrysler is the bargain of the century. 35% of the company (and access to its dealership network) for the cost of giving access to some of their platforms. If Chrysler go under, Fiat loses nothing, in fact they gain, as 35% of whatever money they make from liquidating Chrysler will go to Fiat as a major investor. Just shows how desperate Chrysler is at the moment.
Just remember, Fiat in the quarter that just finished made more profit than Toyota. Sure, they’ve got $US6 billion in debt, but by most car manufacturers measure, thats change behind the couch (GM has over $US60 billion, and a total asset worth of less than $US60 billion, ie its worth a negative amount of money atm).
If Fiat get anything, it should only be a credit line from the government, bailing out a profitable company is a slap in the face for the Italian people otherwise.