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Christopher Bruce2012-06-07 00:57:21

Marchionne Asks for Auto Industry Help for Overcapacity

Fiat feels that it has to close factories and lay off workers to remain competitive

FiatFiatFiatItaly, 1899 > present159 models
4916 photos
35 videos
and ChryslerChryslerChryslerUnited States of America, 1925 > present70 models
875 photos
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CEO Sergio Marchionne is asking the EU for help from the European auto industry's overcapacity. However, the EU is pushing back. Marchionne is asking for support from the factory closures that will probably come from the auto industry in Germany, France, Italy, Spain and the UK.

In contrast, EU Commissioner Antonio Tajanion wants to help the auto industry but is against plant closures. His plan would give automakers around €1 billion for green car research. 

BMWBMWBMWGermany, 1918 > present87 models
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, VolkswagenVolkswagenVolkswagenGermany, 1938 > present98 models
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and MercedesMercedes-BenzMercedes-BenzGermany, 1924 > present197 models
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are resisting Marchionne because they have mature networks in North America and China, which Fiat lacks. Sales in Europe are not as important to them. They are not interested in helping a major competitor. 

Fiat, PSA PeugeotPeugeotPeugeotFrance, 1882 > present120 models
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-CitroënCitroënCitroënFrance, 1919 > present94 models
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and RenaultRenaultRenaultFrance, 1898 > present189 models
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are the automakers hurting the worst from overcapacity in European automotive production. Those brands are focused on European sales and do not have the sales in North America and Asia to offset poor European demand. Analysts predict there could be 2 million vehicles sitting on European dealers by the end of 2012. 

It appears unlikely that the EU will help Fiat and the other Europe-focused automakers lay off workers and close factories. 

Source: Automotive News

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