Italy won't lose jobs if Fiat and Chrysler become a single company
|Luca Ciferri is chief correspondent at Automotive News Europe.|
Italy goes crazy whenever Fiat and Chrysler CEO Sergio Marchionne says the automakers could become a single legal entity based in the United States.
Politicians and unions sing the same tired old song in unison -- Fiat should remain Italian to preserve jobs in Italy, particularly in its home town of Turin.
But if Fiat-Chrysler did become a single company, there would be little to no effect on jobs in Italy.
Why? Because a merged Fiat-Chrysler Corp. would be incorporated in the tiny U.S. state of Delaware, just like Chrysler, General Motors and Ford Motor are now.
The Detroit Three are in good company. More than 850,000 business entities, including more than half of all U.S. publicly traded companies and 63 percent of the companies on Fortune magazine's annual list of the top 500 U.S. corporations are incorporated in Delaware, according to the Delaware Division of Corporations state agency.
Why? Because Delaware has inexpensive incorporation fees and a court system with 200 years of experience in protecting corporations.
No jobs were lost in the headquarters of GM, Ford and Chrysler in Detroit, Dearborn and Highland Park/Auburn Hills because the automakers were incorporated in Delaware.
Instead of spreading bad information that incorporating Fiat-Chrysler in the United States would kill jobs in Italy, the country's leaders should instead reform the bureaucracy, Medieval tax system and rigid working practices that drive Italian corporations to shift abroad not just their legal home, but also their operational headquarters.
You can reach Luca Ciferri at email@example.com.