Italy's Prime Minister Meloni picks fight with Stellantis on car production

Italy's Prime Minister Meloni picks fight with Stellantis on car production

Automotive News Europe — 2024-01-25

Automotive Industry

Italian Prime Minister Giorgia Meloni blasted Stellantis for its efforts to move car production to lower-cost countries at a time when the auto industry is struggling to shift to electrification.

"We want to defend the national interest, establish a balanced relationship with Stellantis to defend production in Italy," Meloni told lawmakers in Rome. "If you want to sell a car on the international market by advertising it as an Italian jewel, then that car must be produced in Italy.

The Amsterdam-based automaker, which owns Italian brands such as Fiat and Alfa Romeo, came under fire amid reports it sent its Italian suppliers a letter flagging investment opportunities in Morocco, a country several companies in the auto industry have been turning to for cheaper electric-vehicle production.

Meloni's government wants Stellantis to produce 1 m vehicles in Italy a year, with the company increasingly under scrutiny for its cost-cutting.

Stellantis CEO Carlos Tavares, who never shies away from criticizing politicians, told reporters on Tuesday 23 January that Italy's hard line on EV incentives has meant lost production at the company's Mirafiori plant in the past year.

When asked specifically about the letter to Italian suppliers Tuesday, Tavares replied that suppliers, just as carmakers, need to get “creative” about ways to lower costs given the expensive shift the industry faces.

"Stellantis is strongly committed to Italy," the manufacturer said in an emailed statement on Wednesday 24 January. "The company has invested several billion euros in Italian operations for new products and production sites."

The 65-year-old CEO has been managing Stellantis — a behemoth with 14 brands created by the 2021 merger of Italy's Fiat Chrysler and France's PSA Group — with a tight fist and relentless cost cuts that have led to record profitability.

French 'bias'

"I am thinking of the alleged merger operation between FCA and the French PSA group which in reality concealed a French acquisition of the historic Italian group," Meloni said on Wednesday. "It's no coincidence that the industrial choices of the group take into consideration the French requests much more than the Italian ones."

The balance between Italy and France on the Stellantis board has been a point of friction between the countries in the past. France owns a 6.1% stake in Stellantis via state-owned Bpifrance, and has representatives on the company's board of directors. Italy has no stake and no representatives.

To be sure, Tavares also has clashes with the French government in the past, notably on EV production.

Meloni's remarks follow spats with France. Her relations with President Emmanuel Macron were tense at the start of her mandate. There's also a long history in Rome of acrimony toward Paris over French business acquisitions in Italy that were seen as domineering.

By contrast, Meloni and German Chancellor Olaf Scholz have grown closer in recent months, spearheading a series of business dealings between their countries.