The billionaire Agnelli family, whose carmaker Fiat employed more than 170,000 people in the 1970s, was Italian industrial royalty for over a century, courted by successive governments through incentives and favourable policy.
Not anymore. This week, right-wing Prime Minister Giorgia Meloni attacked the family’s scion John Elkann and Fiat-Chrysler’s successor, Stellantis — rebranded after the group merged with France’s PSA in 2021.
Her salvo was a cocktail of industrial policy and nationalist politics. It partly expressed frustration at not being able to influence decision-making over a lack of a stake and board seat, unlike the French government. But, with European elections on the horizon, Meloni was also tapping into voters’ fears about the risk of multinationals relocating jobs abroad.
“Challenges like electrification and automation can only be faced by big European groups, which was the rationale for creating Stellantis,” said Valentina Meliciani, professor of applied economics at Luiss University. “But this doesn’t mean the Italian government shouldn’t be worried about maintaining domestic production levels both in terms of quality and synergies with the local supply chain.”
Exor, the Agnelli family holding group with assets worth €33bn in 2023, owns a 14.2 per cent stake in the Paris-listed car group, making it its single largest shareholder and its voting rights are set to grow to 25 per cent under Stellantis’ bylaws. Fiat merged with US group Chrysler in 2014.
“The group is a very important part of the country’s industrial history and it means one must have the courage to criticise choices made by the management and its owners if they are far from the Italian national interest,” Meloni told parliament on Wednesday.
Though Meloni’s government had previously attacked banks and “international speculators” for prioritising profit over people, this was the first time she had directly taken aim at one of the country’s largest industrial groups.
Exor’s investments in Italy include luxury cars Ferrari and Maserati, agriculture equipment manufacturer CNH Industrial, commercial vehicle maker Iveco, football club Juventus and the GEDI media group, the publisher of Italian newspapers La Repubblica and La Stampa. Exor is also the largest shareholder in The Economist magazine and last year took a 15 per cent stake in Dutch-based group Philips.
With EU elections in June, populist and right-wing politicians hope to secure voters’ support by vowing to defend jobs and prioritising Italian interests. “If you want to sell a car on the global market as an Italian jewel, well, then, that car must be produced in Italy,” the prime minister said.
She then went further, saying the merger with PSA was actually “a takeover by the French and it is not by chance that a representative of the French government sits on Stellantis’ board and French interests are valued more highly than Italian ones”.
Elkann last year pushed back against a direct investment from the Italian state while France owns a 6.1 per cent stake in the group via state-owned bank Bpifrance.
As in other countries across the west, Italians blame lower labour costs elsewhere and the EU’s single market for industrial offshoring and job losses.
Stellantis chief executive Carlos Tavares this week visited Sevel, the group’s export-focused van factory in the central Italian town of Atessa, the largest of its kind in Europe. “Italy is spending much less money than any other great European country to support electric vehicles,” said Tavares, who has also clashed with the French government in the past.
“The consequence is that we are losing manufacturing products in Italy.”
For example, at the Mirafiori plant in Turin, the Agnelli family’s hometown, some workers have been furloughed due to waning demand for the Fiat 500’s electric version.
Davide Chiaroni, professor of energy and strategy at Politecnico di Milano, said one problem was that the Fiat 500 was positioned as a premium model but it underperformed expectations. “Unfortunately, Fiat-Chrysler was a latecomer to the EV market that is also why PSA, which already had a strong EV platform, gained the upper hand from the merger,” he said.
At the time of the union PSA also had much higher margins than the Italian -US group. But Fiat-Chrysler was larger, owned the highly profitable Jeep and Ram brands, and “could have negotiated a more balanced board composition”, said Chiaroni.
“Clearly, the presence of a French government representative on the board is helpful when it comes to influencing decisions on where to invest and where to shut down plants,” he added.
Italy also has one of the lowest shares of electric vehicle sales in western Europe, partly because its subsidies are less generous than France and Germany.
“Rather than sale subsidies, Italy needs to support the supply chain’s transformation,” said Chiaroni.
Italian companies have been comparatively slow to transition to EV production, making their products less appealing for Stellantis — which hopes to sell 5mn electric cars annually by 2030. In the first six months of 2023, it sold 170,000 EVs.
Meloni has said she wants the group to increase its Italian vehicle production back to 1mn from the current 750,000. Stellantis produces 735,000 vehicles in France.
To fend off competition from China, industry experts say carmakers should sell small electric cars for €12,000-15,000. Stellantis has said that in order to do that it would move production of such models from the EU to Morocco and Serbia, a choice that has riled politicians and alarmed unions. Higher-end cars would continue to be produced in Italy.
The spat between Meloni and one of the country’s largest industrial groups may extend beyond automotive manufacturing. Centre-left-leaning daily La Repubblica has been highly critical of Meloni’s policies, including a planned €20bn privatisation plan. The government has claimed the paper’s editorial line is dictated by Exor.
“I will not be lectured by a group that sold Fiat to the French and moved its [Exor’s] headquarters to the Netherlands,” Meloni said in an interview with Mediaset television this week. Repubblica senior columnist Massimo Giannini echoed the management’s view when he said: “Journalists are not the publisher’s useful idiots.”
Elkann, who is known for his discretion, has not commented on the spat.
Chiaroni said Exor and the government ultimately needed each other, and Meloni’s political posturing might serve as a way to give Italy a “louder voice on Stellantis’ board without being on the board”.
Additional reporting by Peter Campbell in London