Fiat's Global Gamble Met With Wariness In Turin Italian automaker Fiat is hoping to become a global company making 6 million cars a year. The company already has sealed a deal with Chrysler and hopes to do the same with GM's European subsidiaries. But not everyone in Fiat's hometown of Turin is confident.
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Fiat's Global Gamble Met With Wariness In Turin

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Fiat's Global Gamble Met With Wariness In Turin

Fiat's Global Gamble Met With Wariness In Turin

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This is ALL THINGS CONSIDERED from NPR News. I'm Michele Norris.


And I'm Melissa Block.

Today, the United Auto Workers ratified a package that will cut huge health care costs for General Motors just days before the company is expected to declare bankruptcy. At the same time, Chrysler is on the cusp of recreating itself in bankruptcy court. Chrysler is about to sell its best assets to create a new company.

NORRIS: One of the new owners will be Fiat, the Italian car maker. And while the economic crisis has proved nearly fatal for GM and Chrysler, Fiat has tried to capitalize on big opportunities in Europe and in the U.S. Fiat has global ambitions, but as NPR's Sylvia Poggioli reports from Turin, not everyone in Fiat's hometown is so confident.

SYLVIA POGGIOLI: This is gate number two of Mirafiori, the last Fiat plant in Turin. It's 2 p.m., the morning shift is over, the nightshift is coming in. the 15,000 workers still employed here are worried and tense, most don't want to talk to reporters, except for one man who gives only his first name, Giuliano.

GIULIANO: (Through translator) We know that when there's a merger, workers always lose. Fiat's a good product, but the auto industry is changing. And I fear there's not much of a future for workers like us.

POGGIOLI: Fiat management has imposed a media blackout until merger negotiations in Germany are completed - and even unions are being kept in the dark. Vittorio De Martino is a top official of the powerful metalworkers union.

Mr. VITTORIO DE MARTINO (Metalworkers Union): (Through Translator) We have no information whatsoever. American unions were active participants in the Chrysler deal. The German unions have also been involved in their talks. We'll get the news only once the deal has been concluded.

POGGIOLI: De Martino fears that will mean a 10 percent reduction of the Italian workforce. About 80,000 workers are employed at Fiat's five remaining Italian plants. Production has steadily declined, and they now make just over one-third of the nearly two million vehicles Fiat produces annually. The majority come off assembly lines in Brazil, Serbia, Russia, Turkey and elsewhere. The popular Cinquecento model is made in Poland.

For decades, the city of Turin was known as the Italian Detroit: a gray, early-to-bed, one-company town. Angelo Pezzana, owner of the Luxembourg Bookstore, says the Fiat owners, the Agnelli family, set the tone.

Mr. ANGELO PEZZANA (Owner, Luxembourg Bookstore): Agnelli, they never been great names like the Guggenheim, Rockefeller, Ford. They were not at all interested in culture. They never built a museum, nothing. They were industrialists. They built nothing for town except a big industry, which has its value, too.

POGGIOLI: But in recent years, as Fiat went through a serious crisis and production was sent abroad, the city of Turin went through a cultural and architectural revival. Today, its city center, dotted with magnificent 17th and 18th century palaces and squares, is a haven for pedestrians and outdoor cafes.

And despite the automaker's production difficulties, Fiat's research and development arm, the CRF, revolutionized the industry with the common rail, an environmentally friendly diesel engine technology that's now used by every major European car maker.

Turin Mayor Sergio Chiamparino says the quality of CRF research convinced the U.S. administration to back the Fiat-Chrysler deal.

Mayor SERGIO CHIAMPARINO (Turin, Italy): The reason for the call for Mr. Obama is that CRF invented the so-called multiair system - that is a kind of a common rail, but for the better engine to reduce the pollution and to improve the force of the engine. I think that this is the way.

POGGIOLI: The Turin area hosts 5,000 small industrial software firms, aerospace companies and even Europe's biggest motorboat maker. The concentration of research and technological know-how that could help re-design the future of the auto sector is one of the cards Fiat CEO Sergio Marchionne brought to negotiating tables in America and in Germany.

Industrial history professor, Giuseppe Berta, says Marchionne can also count on other factors: the vast transformation of the car industry and the decline of American auto dominance.

Professor GIUSEPPE BERTA (Industrial History, University of Bocconi, Milan): And is emerging a completely new geography of the sector, of the industrial sector. So Marchionne thinks that if he is able - if we'll be able to arrive -the first to organize a new group, he will succeed.

POGGIOLI: But it's yet not clear whether this will be enough to make a medium-sized player like Fiat into a global giant of the future auto industry.

Sylvia Poggioli, NPR News, Turin.

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