For some investors, Fiat's meeting to approve Chrysler merger felt like a funeral
|Gilles Castonguay is an Automotive News Europe correspondent in Italy|
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Fiat shareholders were in a resigned mood Friday when they met to vote on the Italian carmaker’s merger with Chrysler Group.
"Today we are attending Fiat’s funeral," said Marco Bava, a notoriously combative shareholder, as he went to cast his vote at the extraordinary assembly. The majority of investors voted in favor of the plan.
Not only were the shareholders holding their last meeting in Fiat’s home town of Turin, they were also giving the automaker their consent to move its headquarters outside the country. After 115 years in this northwestern Italian city, Fiat was, in a way, abandoning it to look for a better future elsewhere.
"We are witnessing a death foretold, and maybe it's because of this that we are living a goodbye without tears," Marco Revelli, a sociologist, told la Repubblica newspaper.
The new company arising from the merger, Fiat Chrysler Automobiles (FCA), will be incorporated under Dutch law, based in the UK and listed on the New York Stock Exchange.
Despite Fiat’s troubles over the years, Turin had always been proud of being the seat of Italy’s biggest manufacturer whose rise in the post-war era was intrinsically linked to the country’s own fortunes. The move abroad is the latest example of an industry turning away from national champions towards international conglomerates that are big enough to compete in today's global market.
No matter how many times Fiat’s executives reiterated their commitment to Turin and Italy, the outcome of the vote hurt even though most shareholders recognized there was no alternative. "I'm sad for historical reasons," said Roberto Verrone after casting his vote in favor. "All of this could have been done without having to move the headquarters away."
As a result of the incorporation of FCA in the Netherlands, future assemblies will be held in Amsterdam. John Elkann, Fiat’s chairman and descendant of the automaker’s founding Agnelli family, was asked about the psychological impact that the move would have on the city. "As a Turin resident, I am extremely happy," he replied. "Today marks a new beginning."
Elkann was emphatic in expressing his family's commitment Fiat and Italy. "I’ve recently read in some newspapers that my family was 'tired' and would welcome the idea of distancing itself from Fiat to focusing on other activities less tiring and risky," he said. "I want to confirm today the commitment on the part of myself and my family to continue to support FCA."
Sitting by his side, Fiat CEO Sergio Marchionne insisted the merger had secured the future of both Fiat and Chrysler. He said without each other the two automakers would not have been able to survive the 2008 crisis that devastated the industry nor compete with their bigger rivals.
It was nevertheless fitting that the shareholders held their assembly at a former Fiat factory. The Lingotto building, a massive structure in the southern perimeter of Turin, stopped making cars in 1982. It was later sold to developers and converted into a shopping mall and congress center, where the shareholders, many of them male pensioners, gathered to vote.
With Fiat's 2009 acquisition of Chrysler, Marchionne has transformed Fiat into the world’s seventh biggest carmaking group. Despite this radical transformation, Marchionne closed only one factory in Italy. For the remaining six car plants, he has made new investments to have them build models for premium and luxury brands Jeep, Alfa Romeo and Maserati.
One shareholder, citing his advanced age and limited financial resources, asked if the company could arrange a chartered flight to allow him and his colleagues to attend next year's assembly in Amsterdam. Elkann instead offered video streaming on the company’s Web site. "It will be a more comfortable and less costly way than to book a chartered flight," he said.