Why Milan resists any sale of Alitalia to Air France-KLM
ITALIAN taxpayers learnt on April 22nd that they had just lent €7.50 ($12) each to a near-bankrupt company. The outgoing centre-left government nodded through a loan of €300m to Italy's national flag-carrier, Alitalia, which is debt-laden and losing €1m a day. Normal business criteria have rarely mattered for Alitalia. But this time such considerations have been entirely blown away by the Italian election. The future of Alitalia will now be settled by politics, and maybe diplomacy. It presents Silvio Berlusconi, the prime minister-elect, with his first big challenge. And it constitutes an early test of his commitment to economic liberalism.
Romano Prodi, who will remain Italy's prime minister until early May, convened his cabinet after Air France-KLM, the only firm ready to buy Alitalia, withdrew its bid. It gave no reasons, but they are not hard to guess. Two conditions for the bid were approval by trade unions and by the incoming government. Air France-KLM secured neither. Talks with the unions broke down on April 2nd. One reason was that Mr Berlusconi had already called the bid “offensive” and announced an alternative deal with a consortium that would guarantee the airline's italianita.
His opponents accuse him of dreaming up a non-existent counter-offer so as to play the nationalist card in the election. He insists that there are interested investors, but that they need time to prepare an offer. And since Alitalia is running out of cash (at the end of March, it had only €170m in the kitty), a loan was essential.
Mr Prodi was only too happy to extend one. It dumps the question of Alitalia's future squarely into Mr Berlusconi's lap (although it may fall to Mr Prodi to persuade a sceptical European Commission that a loan to an otherwise insolvent company does not constitute illegal state aid). The outgoing government had contemplated a sum of, at most, €150m. But the loan was doubled at Mr Berlusconi's request.
Mr Berlusconi has dressed up his intervention in terms of national self-respect. Even after the election, when his attitude to Air France-KLM had mellowed, he was demanding that they agree to a new, three-country airline with Italy at the top table. One possible counter-offer may come from Moscow, where Aeroflot said it was awaiting proposals from Italy following an “instruction” by President Vladimir Putin. Mr Putin met Mr Berlusconi at his villa in Sardinia on April 17th.
In the background is a tangle of interests. Air France-KLM wanted to put Alitalia's only hub at Rome's Fiumicino airport, shedding its commitment to Milan's Malpensa. On March 31st, anticipating a change of ownership, the airline scrapped 886 of its 1,238 weekly flights from Malpensa. But the move is contested by businessmen in Lombardy, the region round Milan from which Mr Berlusconi himself springs. Antonio Colombo, director-general of the employers' federation, Assolombarda, notes that Lombardy accounts for 30% of Italy's exports. The shift to Fiumicino has meant losing flights to such places as Dubai, Mumbai and Shanghai.
“Save Malpensa” also became an electoral battle-cry for the Northern League, which handily increased its vote in the election and could yet hold the Berlusconi government to ransom. The League's leader, Umberto Bossi, is already flexing his muscles. This week he claimed (and Mr Berlusconi promptly denied) that he had secured for his party a deputy prime-ministership and the interior ministry in the next cabinet.
Mr Colombo says that the real objection to Air France-KLM's bid was that it bound the government to respect bilateral accords with countries outside Europe's “open skies” agreement. “That meant there was no possibility of other companies filling the gaps left at Malpensa by Alitalia.” Without direct links to countries such as India and China, Milan's attractiveness as a business centre would suffer. So would its role as an exhibition venue, an irony since it has just won the contest to host the World Expo in 2015. Alitalia's italianita is not the only national interest at stake in this saga.
Saturday, April 26, 2008
Rebith of a Carmaker dall'Economist del 24 Aprile 2008
Non tutte le notizie dall'Italia sono negative..
With some fine new cars and financial figures to match, Fiat has staged an astonishing recovery
THE dominating image at last month's Geneva motor show, Europe's most glamorous, was a giant mock-up of a tiny car: the new Fiat 500. It was Fiat's way of celebrating the crowning of its achingly fashionable baby as European car of the year, ahead of a strong field and with one of the biggest winning margins in the competition's history. At the same show, Fiat launched the first all-new Lancia for four years and revealed the Alfa Romeo 8C Spider, judged by some to be the most beautiful car in the world today.
Underpinning the display of confidence in Geneva is a remarkable industrial and financial turnaround that is likely to be pored over in business schools for years. On April 24th Fiat Group, which as well as car marques includes Iveco, a truckmaker, and CNH, a producer of agricultural and construction equipment, reported a trading profit for the first quarter of €766m ($1.1 billion), 29% more than a year earlier and beating expectations. In the whole year it is aiming for €3.4 billion-3.6 billion.
Good news is no longer unusual: despite a stumble in recent months, the share price has outpaced its closest rivals over the past three years. In 2007 Fiat Group made a record trading profit of €3.2 billion, 66% more than in 2006, while eliminating its net industrial debt. The progress of the once loss-making car business was even more dramatic. Fiat Group Automobiles, which comprises Fiat, Alfa and Lancia, raised its trading profit from €291m to €803m. Ferrari and Maserati chipped in a further €290m. By 2010, Fiat (with joint ventures) expects to make 3.5m vehicles.
This is a far cry from the business Sergio Marchionne walked into in June 2004 when he agreed, at the urging of the Agnelli family, Fiat's dominant shareholder, to take on the job of reviving the company's fortunes. Attempts to trim costs were under way and the tiny new Panda had hinted at a much-needed return to form. But otherwise the picture, especially in cars, was grim.
Held back by either ageing or unappealing models, car production was running at about 70% of its annual capacity of 2.5m. Fiat's Italian factories were notoriously inflexible thanks to intransigent unions and a lack of investment. The group's net debt had risen to €4.4 billion and cash was flowing out at an alarming rate. And a €3 billion convertible bond would fall due in 15 months.
The banks were eventually repaid with the help of a rights issue in late 2005—which would have been impossible to get away without signs of improvement. Before that, however, the issue of Fiat's put option with General Motors had to be resolved. Both troubled companies were looking for a way out of an ill-starred partnership, but Fiat was insisting that to extinguish the option, which gave the group the right to sell its car business to GM, the American firm must pay for the value it represented. But as Fiat's plight worsened, so did the claim to any value in the put.
In turning to Mr Marchionne, a corporate troubleshooter who at the time was running SGS, a big Swiss inspection and certification firm in which they had an interest, the Agnellis knew that it was their last roll of the dice with Fiat. A shambling bear of a man with unruly grey locks and a penchant for shapeless black sweaters and straight talk, he is the antithesis of the archetypal smooth Italian executive. In part that may be because Mr Marchionne, though Italian-born, grew up in Canada, where he qualified as both a lawyer and an accountant. His approach to business is decidedly Anglo-Saxon, as is his frequent use of expletives. He demands complete openness, fast communication, accountability; he abhors corporate politics and hierarchy.
So poor was the state of Fiat's carmaking business, which represents half the group's turnover, that Mr Marchionne felt he had no choice but to act quickly. He says: “The single most important thing was to dismantle the organisational structure of Fiat. We tore it apart in 60 days, removing a large number of leaders who had been there for a long time and who represented an operating style that lay outside any proper understanding of market dynamics. We flattened out the structure and gave some relatively young people, in terms of both age and experience, a huge amount of scope.”
A divorce to celebrate
Mr Marchionne's next task was to extract Fiat from its five-year partnership with GM on the best terms possible. It had not worked, for several reasons. Sharing platforms, engines and purchasing had not produced the expected economies of scale and Fiat's ability to act independently had been gradually eroded. Mr Marchionne says that since 2000 Fiat had been like a rabbit frozen in the headlamps. He says: “Every time I saw GM it felt like going out on a date and not having been invited. But we had a contract, an exchange of a promise for a promise. I was ready to uphold my side of the promise.”
In the event, GM was prepared to write Mr Marchionne a cheque for $2 billion to escape being forced to own Fiat's declining car business. The couple split up on the eve of St Valentine's Day 2005. Mr Marchionne celebrated on the plane back to Italy. He recalls: “When I signed the divorce, I had the sense that we had got our independence back, but there was also the knowledge that we'd lost our only parachute, which was alarming for some people given how much money we were losing. But I now had the chance to run this business and run it properly. If I had walked away without monetising the GM put, I would not have had the credibility for the next phase. But more importantly, with $2 billion you can make a lot of small cars.”
The most pressing priority was Fiat, which accounted for more than 80% of the 1.6m cars the company was selling each year. The Panda had shown that Fiat could still build great small cars, but the rest of the range was in desperate need of renewal. The first car to be delivered on Mr Marchionne's watch was the Grande Punto, a bigger than usual B-segment hatchback (a class that includes the Renault Clio and GM's Corsa). Built, ironically, on the Corsa's platform, the car came to market at the end of 2005. Stylish and with a feeling of quality rare in a Fiat, the car was an instant success. Sales are likely to reach a million later this year.
Next, in 2007, came the Bravo, a replacement for the Stilo in the C-segment (with the Volkswagen Golf, Peugeot 308 and GM's Astra). Although the Bravo breaks little new technical ground, it brings together two elements that Mr Marchionne and his team of “kids”, as he calls them, identified as critical three years ago. One is the importance of styling. The Bravo is as crisply handsome as the Stilo was stodgy. Mr Marchionne observes: “We used to make too many ugly cars. We really pushed the envelope on that one. We thought we had the right to do whatever we wanted. It was arrogance.”
The era of the brilliant but hideous Fiat Multipla and the bug-eyed Lancia Thesis (aiming at the refinement of the Mercedes S-Class, it was a €1.2 billion flop) is over. Mr Marchionne has brought all the group's styling divisions together in a strikingly restored building in Turin's Mirafiori complex, known simply as Officina 83, and put them under the overall charge of Lorenzo Ramaciotti, a former design chief of Pininfarina, a renowned car-styling house.
Mr Ramaciotti says that at Fiat design had ceased to be seen as a core competence of the manufacturing process, but that has now changed. Referring to Lancia, Mr Ramaciotti argues that you can't be successful if your cars look odd. But nor can Fiat be as conservative as the German premium marques. “Italian brands must be extrovert and innovative,” he says. “We have more freedom, but more risk as well.” The reason that the new 500 is so important is that it has given Fiat's designers the self-confidence to believe they can compete with the best in the world.
The second way in which the Bravo symbolises the new Fiat is the extraordinary speed of its development. The company's urgent need for fresh products and its limited resources forced it to take risks. Harald Wester, Fiat's German head of engineering, claims that the key has been to “trust your virtual world”. In designing both the Bravo and the 500, Fiat chose to rely entirely on computer simulations rather than to take the lengthy traditional route of making a series of prototypes. Mr Wester says: “With virtual engineering, we can test and validate hundreds of different solutions and configurations—much more than we possibly could with prototypes.” Fiat, he says, did not even make a prototype for crash testing.
As a result, Fiat was able to cut the time from “design freeze” to production on the Bravo and the 500 to just 18 months, from 26 months on the Stilo. Mr Marchionne says that cutting time to market is a critical source of competitive advantage for “the guys running the brand who are mostly not engineers, but are people with a very strong consumer product bias”. Because they don't have to forecast the market so far ahead, they have a better chance of getting the car right when it is launched.
Another advantage that Fiat is determined to exploit is its cars' relative fuel efficiency. When new European Union rules on carbon-dioxide emissions come into force (supposedly in 2012, but subject to intense political negotiation), Fiat expects its fleet to have lower average emissions than any competitor. That is a reflection partly of the fact that the company makes lots of light small cars and few big heavy ones, but also of the strength of its power-train technology. It has already become the first carmaker to offer diesel engines that comply with so-called Euro 5 fuel standards. And it has another trick up its sleeve: a new generation of petrol engines, called Multiair.
Using a patented Fiat technology that does away with camshafts and valve gear, the first engine to be launched next year will be an 80bhp twin-cylinder turbo 900cc engine that will emit only 69g of CO2 per kilometre—just over half the proposed EU target for 2012. It will also cost far less to make than an equivalent four-cylinder engine. A few years ago Fiat made the mistake of licensing another important innovation, “common rail” diesel technology, to Bosch: being financially weak, it could not afford to keep common rail to itself. This time it will protect its advantage by not licensing Multiair to other manufacturers for at least four years.
One area, however, where Fiat is still playing catch-up with rivals such as VW and PSA Peugeot Citroën is in standardising parts and platforms across model ranges. According to Mr Wester, before 2005, every part in an Alfa Romeo, down to the last screw, could be slightly different from that on a similar-sized Fiat. In 2006 the group was using 19 different platforms. By 2012 it will have just six.
From pandas to spiders
With Fiat now in good shape and with the prospect of a new Panda next year as well as a city car and various spin-offs from the 500, the next task is to revive the group's two underperforming, supposedly “premium” brands, Lancia and Alfa Romeo.
Olivier François, Lancia's chief executive, says that Lancia should stand for Italian style and character, what he calls “elegance with attitude”. The new Delta, which in size is midway between a Golf and bigger, D-segment cars, certainly looks different from anything else on the road without descending into the lethal eccentricity of the recent past. But Mr François may have a difficult job persuading non-Italians to try it precisely because it is a hard car to categorise.
He and Mr Marchionne have, however, had one stroke of luck in fuelling interest in the brand—the inspired decision to hire none other than Carla Bruni, now married to Nicolas Sarkozy, to star in Lancia's advertisements. Mr Marchionne says: “She wasn't sleeping with the French president when we approached her. There was a headline in an Italian newspaper saying Marchionne got there first. Typically Italian, but I'm afraid absolutely false!”
Although Mr Marchionne sees Lancia as a purely European marque, he has said that he wants Alfa Romeo to return to America for the first time since the early 1990s. He is looking for a partner, possibly Chrysler, to build the cars there within the next three or four years. Mr Marchionne believes that despite having lost its way many years ago, Alfa is still a world brand that people identify with. He says: “Alfa was known for lighter, faster, more agile vehicles. Who doesn't remember the Duetto in 'The Graduate'? It's just a pity we ended up doing the exact opposite of what Alfa drivers wanted. The 159 is one of the heaviest D-segment cars around. We have to go back and clean that up.”
That is a job for Luca De Meo, a 40-year-old regarded by some inside the firm as a possible heir to Mr Marchionne. Mr De Meo, who is the group's head of marketing as well as Alfa's new chief executive, admits that the expensive, limited-edition 8C Spider is a “halo” model rather than a practical contribution to Alfa's recovery, “a sign of competence and a blueprint” for Alfa's brand values. The cars that will decide Alfa's immediate future are the new MiTo, which is based on the Punto and has been designed to match the driving dynamics of BMW's Mini, and the 149, successor to the compact 147 hatchback.
Mr Marchionne says that the MiTo (the name stands for Milan and Turin), which will be launched this summer, will “come up looking and smelling like Alfas of the future”, but that it is the 149 which will really set the mark for the rest of Alfa's range. He says: “We threw the 149 back for more than 30 months because it wasn't enough of an improvement. It was the smartest thing we've ever done.” Mr Marchionne has set Alfa and Lancia sales targets of 300,000 each in 2010. Last year they managed only 275,000 combined.
In common with most of the world's leading manufacturers, Fiat is expecting a good deal of its growth to come from emerging markets. In 2006, 37% of Fiat's vehicle sales, including vans and joint ventures, came from outside western Europe. By 2010, that is due to increase to 46%. Fiat is the market leader in the rapidly expanding Brazilian market, but apart from a truckmaking joint venture between Iveco and SAIC in China, it is weak in China, India and Russia. Fiat's performance in Russia, which will soon overtake Germany as Europe's biggest car market, has been particularly poor. Although (or perhaps because) Fiat designs were the basis of much of the Soviet car industry, the company sold only 2,000 cars there in 2006. However, the new, booted Fiat Linea, which is manufactured in Turkey and will also be made in China, India and Russia, provides ammunition it has previously lacked.
So far, for all its small-car expertise, Fiat has yet to decide whether to join the low-cost bandwagon that Renault started with the Logan, a basic four-door saloon made in Romania. Mr Marchionne says: “We want to play in low-cost, but not with one of our existing brands—it would destroy all the work of the last four years. We have the technical skills, but the big issue is how deep is the market and how long will it last.” Fiat has a joint venture with Tata in India and has recently signed a similar deal with Chery with the intention of launching Alfa and Fiat in China. But Mr Marchionne is wary: “China is damned if you do, damned if you don't. The market is exploding, but it's very competitive. Can you make real money there?”
Although it is occasionally suggested that Mr Marchionne may not stick around long enough to find out the answer to that and other questions (he is vice-chairman of UBS, a troubled Swiss bank, and some shareholders would like him to become chairman), he gives the impression he is there for the long-haul. “We set targets to 2010. Any speculation before that is nonsense,” he says. “The first phase of this story finished last year. We'd shown we're not the dumbest people on Earth and that we could make some money. The next phase is the really important one. Can we build a great industrial group or not?”
What does he mean by that? Closing the gap, he explains, with the industry's very best: making cars as well as Toyota, trucks as well as Scania and agricultural equipment as well as John Deere. As for his own role, he says: “The kids are truly devoted to the cause. They are the heart of the success. I've been a conduit for change and that's about it.”
With some fine new cars and financial figures to match, Fiat has staged an astonishing recovery
THE dominating image at last month's Geneva motor show, Europe's most glamorous, was a giant mock-up of a tiny car: the new Fiat 500. It was Fiat's way of celebrating the crowning of its achingly fashionable baby as European car of the year, ahead of a strong field and with one of the biggest winning margins in the competition's history. At the same show, Fiat launched the first all-new Lancia for four years and revealed the Alfa Romeo 8C Spider, judged by some to be the most beautiful car in the world today.
Underpinning the display of confidence in Geneva is a remarkable industrial and financial turnaround that is likely to be pored over in business schools for years. On April 24th Fiat Group, which as well as car marques includes Iveco, a truckmaker, and CNH, a producer of agricultural and construction equipment, reported a trading profit for the first quarter of €766m ($1.1 billion), 29% more than a year earlier and beating expectations. In the whole year it is aiming for €3.4 billion-3.6 billion.
Good news is no longer unusual: despite a stumble in recent months, the share price has outpaced its closest rivals over the past three years. In 2007 Fiat Group made a record trading profit of €3.2 billion, 66% more than in 2006, while eliminating its net industrial debt. The progress of the once loss-making car business was even more dramatic. Fiat Group Automobiles, which comprises Fiat, Alfa and Lancia, raised its trading profit from €291m to €803m. Ferrari and Maserati chipped in a further €290m. By 2010, Fiat (with joint ventures) expects to make 3.5m vehicles.
This is a far cry from the business Sergio Marchionne walked into in June 2004 when he agreed, at the urging of the Agnelli family, Fiat's dominant shareholder, to take on the job of reviving the company's fortunes. Attempts to trim costs were under way and the tiny new Panda had hinted at a much-needed return to form. But otherwise the picture, especially in cars, was grim.
Held back by either ageing or unappealing models, car production was running at about 70% of its annual capacity of 2.5m. Fiat's Italian factories were notoriously inflexible thanks to intransigent unions and a lack of investment. The group's net debt had risen to €4.4 billion and cash was flowing out at an alarming rate. And a €3 billion convertible bond would fall due in 15 months.
The banks were eventually repaid with the help of a rights issue in late 2005—which would have been impossible to get away without signs of improvement. Before that, however, the issue of Fiat's put option with General Motors had to be resolved. Both troubled companies were looking for a way out of an ill-starred partnership, but Fiat was insisting that to extinguish the option, which gave the group the right to sell its car business to GM, the American firm must pay for the value it represented. But as Fiat's plight worsened, so did the claim to any value in the put.
In turning to Mr Marchionne, a corporate troubleshooter who at the time was running SGS, a big Swiss inspection and certification firm in which they had an interest, the Agnellis knew that it was their last roll of the dice with Fiat. A shambling bear of a man with unruly grey locks and a penchant for shapeless black sweaters and straight talk, he is the antithesis of the archetypal smooth Italian executive. In part that may be because Mr Marchionne, though Italian-born, grew up in Canada, where he qualified as both a lawyer and an accountant. His approach to business is decidedly Anglo-Saxon, as is his frequent use of expletives. He demands complete openness, fast communication, accountability; he abhors corporate politics and hierarchy.
So poor was the state of Fiat's carmaking business, which represents half the group's turnover, that Mr Marchionne felt he had no choice but to act quickly. He says: “The single most important thing was to dismantle the organisational structure of Fiat. We tore it apart in 60 days, removing a large number of leaders who had been there for a long time and who represented an operating style that lay outside any proper understanding of market dynamics. We flattened out the structure and gave some relatively young people, in terms of both age and experience, a huge amount of scope.”
A divorce to celebrate
Mr Marchionne's next task was to extract Fiat from its five-year partnership with GM on the best terms possible. It had not worked, for several reasons. Sharing platforms, engines and purchasing had not produced the expected economies of scale and Fiat's ability to act independently had been gradually eroded. Mr Marchionne says that since 2000 Fiat had been like a rabbit frozen in the headlamps. He says: “Every time I saw GM it felt like going out on a date and not having been invited. But we had a contract, an exchange of a promise for a promise. I was ready to uphold my side of the promise.”
In the event, GM was prepared to write Mr Marchionne a cheque for $2 billion to escape being forced to own Fiat's declining car business. The couple split up on the eve of St Valentine's Day 2005. Mr Marchionne celebrated on the plane back to Italy. He recalls: “When I signed the divorce, I had the sense that we had got our independence back, but there was also the knowledge that we'd lost our only parachute, which was alarming for some people given how much money we were losing. But I now had the chance to run this business and run it properly. If I had walked away without monetising the GM put, I would not have had the credibility for the next phase. But more importantly, with $2 billion you can make a lot of small cars.”
The most pressing priority was Fiat, which accounted for more than 80% of the 1.6m cars the company was selling each year. The Panda had shown that Fiat could still build great small cars, but the rest of the range was in desperate need of renewal. The first car to be delivered on Mr Marchionne's watch was the Grande Punto, a bigger than usual B-segment hatchback (a class that includes the Renault Clio and GM's Corsa). Built, ironically, on the Corsa's platform, the car came to market at the end of 2005. Stylish and with a feeling of quality rare in a Fiat, the car was an instant success. Sales are likely to reach a million later this year.
Next, in 2007, came the Bravo, a replacement for the Stilo in the C-segment (with the Volkswagen Golf, Peugeot 308 and GM's Astra). Although the Bravo breaks little new technical ground, it brings together two elements that Mr Marchionne and his team of “kids”, as he calls them, identified as critical three years ago. One is the importance of styling. The Bravo is as crisply handsome as the Stilo was stodgy. Mr Marchionne observes: “We used to make too many ugly cars. We really pushed the envelope on that one. We thought we had the right to do whatever we wanted. It was arrogance.”
The era of the brilliant but hideous Fiat Multipla and the bug-eyed Lancia Thesis (aiming at the refinement of the Mercedes S-Class, it was a €1.2 billion flop) is over. Mr Marchionne has brought all the group's styling divisions together in a strikingly restored building in Turin's Mirafiori complex, known simply as Officina 83, and put them under the overall charge of Lorenzo Ramaciotti, a former design chief of Pininfarina, a renowned car-styling house.
Mr Ramaciotti says that at Fiat design had ceased to be seen as a core competence of the manufacturing process, but that has now changed. Referring to Lancia, Mr Ramaciotti argues that you can't be successful if your cars look odd. But nor can Fiat be as conservative as the German premium marques. “Italian brands must be extrovert and innovative,” he says. “We have more freedom, but more risk as well.” The reason that the new 500 is so important is that it has given Fiat's designers the self-confidence to believe they can compete with the best in the world.
The second way in which the Bravo symbolises the new Fiat is the extraordinary speed of its development. The company's urgent need for fresh products and its limited resources forced it to take risks. Harald Wester, Fiat's German head of engineering, claims that the key has been to “trust your virtual world”. In designing both the Bravo and the 500, Fiat chose to rely entirely on computer simulations rather than to take the lengthy traditional route of making a series of prototypes. Mr Wester says: “With virtual engineering, we can test and validate hundreds of different solutions and configurations—much more than we possibly could with prototypes.” Fiat, he says, did not even make a prototype for crash testing.
As a result, Fiat was able to cut the time from “design freeze” to production on the Bravo and the 500 to just 18 months, from 26 months on the Stilo. Mr Marchionne says that cutting time to market is a critical source of competitive advantage for “the guys running the brand who are mostly not engineers, but are people with a very strong consumer product bias”. Because they don't have to forecast the market so far ahead, they have a better chance of getting the car right when it is launched.
Another advantage that Fiat is determined to exploit is its cars' relative fuel efficiency. When new European Union rules on carbon-dioxide emissions come into force (supposedly in 2012, but subject to intense political negotiation), Fiat expects its fleet to have lower average emissions than any competitor. That is a reflection partly of the fact that the company makes lots of light small cars and few big heavy ones, but also of the strength of its power-train technology. It has already become the first carmaker to offer diesel engines that comply with so-called Euro 5 fuel standards. And it has another trick up its sleeve: a new generation of petrol engines, called Multiair.
Using a patented Fiat technology that does away with camshafts and valve gear, the first engine to be launched next year will be an 80bhp twin-cylinder turbo 900cc engine that will emit only 69g of CO2 per kilometre—just over half the proposed EU target for 2012. It will also cost far less to make than an equivalent four-cylinder engine. A few years ago Fiat made the mistake of licensing another important innovation, “common rail” diesel technology, to Bosch: being financially weak, it could not afford to keep common rail to itself. This time it will protect its advantage by not licensing Multiair to other manufacturers for at least four years.
One area, however, where Fiat is still playing catch-up with rivals such as VW and PSA Peugeot Citroën is in standardising parts and platforms across model ranges. According to Mr Wester, before 2005, every part in an Alfa Romeo, down to the last screw, could be slightly different from that on a similar-sized Fiat. In 2006 the group was using 19 different platforms. By 2012 it will have just six.
From pandas to spiders
With Fiat now in good shape and with the prospect of a new Panda next year as well as a city car and various spin-offs from the 500, the next task is to revive the group's two underperforming, supposedly “premium” brands, Lancia and Alfa Romeo.
Olivier François, Lancia's chief executive, says that Lancia should stand for Italian style and character, what he calls “elegance with attitude”. The new Delta, which in size is midway between a Golf and bigger, D-segment cars, certainly looks different from anything else on the road without descending into the lethal eccentricity of the recent past. But Mr François may have a difficult job persuading non-Italians to try it precisely because it is a hard car to categorise.
He and Mr Marchionne have, however, had one stroke of luck in fuelling interest in the brand—the inspired decision to hire none other than Carla Bruni, now married to Nicolas Sarkozy, to star in Lancia's advertisements. Mr Marchionne says: “She wasn't sleeping with the French president when we approached her. There was a headline in an Italian newspaper saying Marchionne got there first. Typically Italian, but I'm afraid absolutely false!”
Although Mr Marchionne sees Lancia as a purely European marque, he has said that he wants Alfa Romeo to return to America for the first time since the early 1990s. He is looking for a partner, possibly Chrysler, to build the cars there within the next three or four years. Mr Marchionne believes that despite having lost its way many years ago, Alfa is still a world brand that people identify with. He says: “Alfa was known for lighter, faster, more agile vehicles. Who doesn't remember the Duetto in 'The Graduate'? It's just a pity we ended up doing the exact opposite of what Alfa drivers wanted. The 159 is one of the heaviest D-segment cars around. We have to go back and clean that up.”
That is a job for Luca De Meo, a 40-year-old regarded by some inside the firm as a possible heir to Mr Marchionne. Mr De Meo, who is the group's head of marketing as well as Alfa's new chief executive, admits that the expensive, limited-edition 8C Spider is a “halo” model rather than a practical contribution to Alfa's recovery, “a sign of competence and a blueprint” for Alfa's brand values. The cars that will decide Alfa's immediate future are the new MiTo, which is based on the Punto and has been designed to match the driving dynamics of BMW's Mini, and the 149, successor to the compact 147 hatchback.
Mr Marchionne says that the MiTo (the name stands for Milan and Turin), which will be launched this summer, will “come up looking and smelling like Alfas of the future”, but that it is the 149 which will really set the mark for the rest of Alfa's range. He says: “We threw the 149 back for more than 30 months because it wasn't enough of an improvement. It was the smartest thing we've ever done.” Mr Marchionne has set Alfa and Lancia sales targets of 300,000 each in 2010. Last year they managed only 275,000 combined.
In common with most of the world's leading manufacturers, Fiat is expecting a good deal of its growth to come from emerging markets. In 2006, 37% of Fiat's vehicle sales, including vans and joint ventures, came from outside western Europe. By 2010, that is due to increase to 46%. Fiat is the market leader in the rapidly expanding Brazilian market, but apart from a truckmaking joint venture between Iveco and SAIC in China, it is weak in China, India and Russia. Fiat's performance in Russia, which will soon overtake Germany as Europe's biggest car market, has been particularly poor. Although (or perhaps because) Fiat designs were the basis of much of the Soviet car industry, the company sold only 2,000 cars there in 2006. However, the new, booted Fiat Linea, which is manufactured in Turkey and will also be made in China, India and Russia, provides ammunition it has previously lacked.
So far, for all its small-car expertise, Fiat has yet to decide whether to join the low-cost bandwagon that Renault started with the Logan, a basic four-door saloon made in Romania. Mr Marchionne says: “We want to play in low-cost, but not with one of our existing brands—it would destroy all the work of the last four years. We have the technical skills, but the big issue is how deep is the market and how long will it last.” Fiat has a joint venture with Tata in India and has recently signed a similar deal with Chery with the intention of launching Alfa and Fiat in China. But Mr Marchionne is wary: “China is damned if you do, damned if you don't. The market is exploding, but it's very competitive. Can you make real money there?”
Although it is occasionally suggested that Mr Marchionne may not stick around long enough to find out the answer to that and other questions (he is vice-chairman of UBS, a troubled Swiss bank, and some shareholders would like him to become chairman), he gives the impression he is there for the long-haul. “We set targets to 2010. Any speculation before that is nonsense,” he says. “The first phase of this story finished last year. We'd shown we're not the dumbest people on Earth and that we could make some money. The next phase is the really important one. Can we build a great industrial group or not?”
What does he mean by that? Closing the gap, he explains, with the industry's very best: making cars as well as Toyota, trucks as well as Scania and agricultural equipment as well as John Deere. As for his own role, he says: “The kids are truly devoted to the cause. They are the heart of the success. I've been a conduit for change and that's about it.”
I piu' celebri insulti politici dal Times di Londra tradotto dal Corriere della Sera
una frase di prodi a berlusconi nella top ten del giornale inglese
I più celebri insulti politici
(secondo il Times)
Rassegna anglocentrica, ma l'Italia è rappresentata
LONDRA - Nell'ultima campagna elettorale italiana è comparso raramente, forse perché i nostri politici, in passato, ne hanno abuso indiscriminatamente. L'insulto, ovvero la pratica di attaccare violentemente gli avversari politici, è stata riscoperta recentemente dai quotidiani del Regno Unito, patria del liberalismo e del fair play, dopo che il primo ministro britannico Gordon Brown è stato definito dal dittatore dello Zimbabwe Robert Mugabe «solo un piccolo puntino in questo mondo» perché aveva criticato la lentezza dello scrutinio durante le recenti elezioni nel Paese africano. Partendo da questo attacco poco gentile il Times di Londra ha provato a stilare la top ten degli insulti politici più celebri.
INSULTO DI PRODI - Bisogna dire che la classifica è fortemente anglocentrica. Nove insulti su dieci sono stati proferiti da politici britannici verso connazionali. Tuttavia l'unico attacco non britannico presente nella top ten è quello lanciato da Romano Prodi nei confronti di Silvio Berlusconi durante la campagna elettorale del 2006. Il professore durante il secondo faccia a faccia televisivo con il Cavaliere, spazientito per le accuse e la carrellata di numeri enunciati dall'allora leader del «Polo delle libertà» parafrasando una celebre battuta del premio Nobel irlandese George Bernard Shaw, commentò sarcastico: «Berlusconi si attacca alle cifre come gli ubriachi si attaccano ai lampioni»
CHURCHILL - Nella top ten non poteva mancare Winston Churchill, oratore di indubbia fama che spesso freddava i suoi avversari con battute al vetriolo. Tra le sue più celebri invettive il Times ne sceglie due: la prima è quella indirizzata nei confronti di Clement Attlee che lo spodestò dalla carica di primo ministro all'indomani della vittoria nella Seconda Guerra Mondiale. Il leader laburista fu definito dal grande premier britannico «Una pecora in abiti da pecora» (parafrasando il proverbio «un lupo in abiti da pecora»). La seconda offesa di Churchill vide come vittima Sir Stafford Cripps, esponente laburista. Per criticare la sua strategia politica Churchill commentò: «There but for the grace of God goes God» (parafrasando il proverbio «There but for the grace of God go I» «Se Dio non mi aiuta vado finire così anch'io») che potrebbe essere tradotto più o meno con «Se Dio non si aiuta va a finire male pure Lui». Nella sua lunga carriera il politico conservatore fu investito anche da diversi attacchi. Il Times sceglie quello rivolto nei suoi confronti dallo statista inglese d'inizio novecento Frederick Edwin Smith che disse di Churchill: «Winston ha speso i migliori anni della sua vita a preparare discorsi improvvisati»
GLADSTONE E DISRAELI - Secondo il Times l'età dell'oro dell'invettiva fu il periodo vittoriano quando due dei più famosi politici inglesi, Benjamin Disraeli e William Gladstone si affrontarono per decenni nella Camera dei Comuni anche a colpi d'insulti. Tra questi il Times ricorda l'invettiva di Disraeli che così una volta criticò l'avversario di una vita: «Non ha un solo difetto che si possa redimere». Ma il politico conservatore non era l'unico a non amare Gladstone. Gli storici raccontano che non andasse a genio nemmeno alla regina Vittoria che gli preferì sempre il suo acerrimo avversario. Una volta la stessa regina, stanca dei modi «rozzi» di Gladstone, troppo lontani dall’etichetta di corte, disse di lui: «Il signor Gladstone si rivolge a me come se parlasse al pubblico».
LA THATCHER E GLI ALTRI - Margaret Thatcher è un altro dei politici più insultati della storia inglese. Secondo il Times potrebbe essere scritto un intero libro sulle invettive ricevute durante la sua lunga carriera da primo ministro. Il quotidiano londinese sceglie per la top ten due famose offese: la prima è quella del politico conservatore Jonathan Aitken che intervistato da un giornale egiziano e volendo sottolineare l'ignoranza sulle questioni mediorientali della Lady di Ferro disse sarcastico: «Probabilmente pensa che Sinai sia il plurale di seno» (dove si intendono i seni nasali). La seconda è l’offesa di Lord St John of Fawsley che così descrisse la Thatcher: «Quando parla senza pensare, dice ciò che pensa». Terminano la top ten la frase del laburista Denis Healey che attaccato dal ministro thacheriano Geoffrey Howe proruppe: «E' come essere criticato da una pecora morta» e la battuta volgare di Alan Clark che disse del collega conservatore Douglas Hurd: «Potrebbe avere anche una pannocchia nel sedere».
I più celebri insulti politici
(secondo il Times)
Rassegna anglocentrica, ma l'Italia è rappresentata
LONDRA - Nell'ultima campagna elettorale italiana è comparso raramente, forse perché i nostri politici, in passato, ne hanno abuso indiscriminatamente. L'insulto, ovvero la pratica di attaccare violentemente gli avversari politici, è stata riscoperta recentemente dai quotidiani del Regno Unito, patria del liberalismo e del fair play, dopo che il primo ministro britannico Gordon Brown è stato definito dal dittatore dello Zimbabwe Robert Mugabe «solo un piccolo puntino in questo mondo» perché aveva criticato la lentezza dello scrutinio durante le recenti elezioni nel Paese africano. Partendo da questo attacco poco gentile il Times di Londra ha provato a stilare la top ten degli insulti politici più celebri.
INSULTO DI PRODI - Bisogna dire che la classifica è fortemente anglocentrica. Nove insulti su dieci sono stati proferiti da politici britannici verso connazionali. Tuttavia l'unico attacco non britannico presente nella top ten è quello lanciato da Romano Prodi nei confronti di Silvio Berlusconi durante la campagna elettorale del 2006. Il professore durante il secondo faccia a faccia televisivo con il Cavaliere, spazientito per le accuse e la carrellata di numeri enunciati dall'allora leader del «Polo delle libertà» parafrasando una celebre battuta del premio Nobel irlandese George Bernard Shaw, commentò sarcastico: «Berlusconi si attacca alle cifre come gli ubriachi si attaccano ai lampioni»
CHURCHILL - Nella top ten non poteva mancare Winston Churchill, oratore di indubbia fama che spesso freddava i suoi avversari con battute al vetriolo. Tra le sue più celebri invettive il Times ne sceglie due: la prima è quella indirizzata nei confronti di Clement Attlee che lo spodestò dalla carica di primo ministro all'indomani della vittoria nella Seconda Guerra Mondiale. Il leader laburista fu definito dal grande premier britannico «Una pecora in abiti da pecora» (parafrasando il proverbio «un lupo in abiti da pecora»). La seconda offesa di Churchill vide come vittima Sir Stafford Cripps, esponente laburista. Per criticare la sua strategia politica Churchill commentò: «There but for the grace of God goes God» (parafrasando il proverbio «There but for the grace of God go I» «Se Dio non mi aiuta vado finire così anch'io») che potrebbe essere tradotto più o meno con «Se Dio non si aiuta va a finire male pure Lui». Nella sua lunga carriera il politico conservatore fu investito anche da diversi attacchi. Il Times sceglie quello rivolto nei suoi confronti dallo statista inglese d'inizio novecento Frederick Edwin Smith che disse di Churchill: «Winston ha speso i migliori anni della sua vita a preparare discorsi improvvisati»
GLADSTONE E DISRAELI - Secondo il Times l'età dell'oro dell'invettiva fu il periodo vittoriano quando due dei più famosi politici inglesi, Benjamin Disraeli e William Gladstone si affrontarono per decenni nella Camera dei Comuni anche a colpi d'insulti. Tra questi il Times ricorda l'invettiva di Disraeli che così una volta criticò l'avversario di una vita: «Non ha un solo difetto che si possa redimere». Ma il politico conservatore non era l'unico a non amare Gladstone. Gli storici raccontano che non andasse a genio nemmeno alla regina Vittoria che gli preferì sempre il suo acerrimo avversario. Una volta la stessa regina, stanca dei modi «rozzi» di Gladstone, troppo lontani dall’etichetta di corte, disse di lui: «Il signor Gladstone si rivolge a me come se parlasse al pubblico».
LA THATCHER E GLI ALTRI - Margaret Thatcher è un altro dei politici più insultati della storia inglese. Secondo il Times potrebbe essere scritto un intero libro sulle invettive ricevute durante la sua lunga carriera da primo ministro. Il quotidiano londinese sceglie per la top ten due famose offese: la prima è quella del politico conservatore Jonathan Aitken che intervistato da un giornale egiziano e volendo sottolineare l'ignoranza sulle questioni mediorientali della Lady di Ferro disse sarcastico: «Probabilmente pensa che Sinai sia il plurale di seno» (dove si intendono i seni nasali). La seconda è l’offesa di Lord St John of Fawsley che così descrisse la Thatcher: «Quando parla senza pensare, dice ciò che pensa». Terminano la top ten la frase del laburista Denis Healey che attaccato dal ministro thacheriano Geoffrey Howe proruppe: «E' come essere criticato da una pecora morta» e la battuta volgare di Alan Clark che disse del collega conservatore Douglas Hurd: «Potrebbe avere anche una pannocchia nel sedere».
L'Agonia dell'Alitalia secondo il Financial Times del 24 Aprile 2008
Questo editoriale del Financial Times presenta una serie di osservazione pacate e importanti per quanto riguarda l'Alitalia.
If it were left to economics and good business sense, Alitalia, Italy’s lossmaking national flag carrier, would be well on its way to bankruptcy. Instead, Silvio Berlusconi, who is due to be sworn in next month as Italian premier for a third time, is trying to save the airline. That is a big political gamble. The chances of a successful rescue are slim; the price of failure high.
Alitalia is a test of whether Mr Berlusconi seriously intends to take on vested trade union interests and promote free competition. His handling of the affair will set the tone for economic policymaking in Italy.
National pride and the threat of thousands of job losses should Alitalia collapse has made its plight a divisive political issue. Mr Berlusconi repeatedly claimed in his election campaign that he would find an Italian business consortium to make an offer for the carrier.
Despite its losses, Alitalia has attractions. These include valuable routes and landing slots. Promising to save the airline is fine if you have a workable plan and financing to go with it. But the suspicion is growing that Mr Berlusconi has neither. In an era of low-cost air travel and increased competition from smaller, more nimble rivals, there is no need for a bloated national carrier. Moreover, few would-be buyers will have deep enough pockets or the patience needed to rescue Alitalia without large job losses.
Mr Berlusconi’s electoral populism on Alitalia has landed him in difficulties – especially if it is used by the now extra-parliamentary far left to regroup. His earlier encouragement to unions to reject 2,100 job cuts proposed by Air France-KLM does not sit easily with his warning this week that workers should expect painful job cuts when the putative consortium bids. After promising to block the Air France-KLM takeover, Mr Berlusconi has behaved hypocritically by blaming the unions’ “veto” for the collapse of talks. He has won approval from Romano Prodi’s outgoing administration for a €300m bridging loan to keep Alitalia from bankruptcy. Not only may the loan breach European Union state aid rules, it is ironic that a centre-left government, which had prided itself on financial discipline, is giving away taxpayers’ money to a centre-right administration that defeated it on a platform of cutting public spending.
Mr Berlusconi has wasted enough time on gesture politics. He must move quickly. If there is a consortium ready to bid, it should be identified. Other would-be buyers should be allowed to look at Alitalia’s books. If, after due diligence, no bid materialises, Alitalia should be put out of its misery.
If it were left to economics and good business sense, Alitalia, Italy’s lossmaking national flag carrier, would be well on its way to bankruptcy. Instead, Silvio Berlusconi, who is due to be sworn in next month as Italian premier for a third time, is trying to save the airline. That is a big political gamble. The chances of a successful rescue are slim; the price of failure high.
Alitalia is a test of whether Mr Berlusconi seriously intends to take on vested trade union interests and promote free competition. His handling of the affair will set the tone for economic policymaking in Italy.
National pride and the threat of thousands of job losses should Alitalia collapse has made its plight a divisive political issue. Mr Berlusconi repeatedly claimed in his election campaign that he would find an Italian business consortium to make an offer for the carrier.
Despite its losses, Alitalia has attractions. These include valuable routes and landing slots. Promising to save the airline is fine if you have a workable plan and financing to go with it. But the suspicion is growing that Mr Berlusconi has neither. In an era of low-cost air travel and increased competition from smaller, more nimble rivals, there is no need for a bloated national carrier. Moreover, few would-be buyers will have deep enough pockets or the patience needed to rescue Alitalia without large job losses.
Mr Berlusconi’s electoral populism on Alitalia has landed him in difficulties – especially if it is used by the now extra-parliamentary far left to regroup. His earlier encouragement to unions to reject 2,100 job cuts proposed by Air France-KLM does not sit easily with his warning this week that workers should expect painful job cuts when the putative consortium bids. After promising to block the Air France-KLM takeover, Mr Berlusconi has behaved hypocritically by blaming the unions’ “veto” for the collapse of talks. He has won approval from Romano Prodi’s outgoing administration for a €300m bridging loan to keep Alitalia from bankruptcy. Not only may the loan breach European Union state aid rules, it is ironic that a centre-left government, which had prided itself on financial discipline, is giving away taxpayers’ money to a centre-right administration that defeated it on a platform of cutting public spending.
Mr Berlusconi has wasted enough time on gesture politics. He must move quickly. If there is a consortium ready to bid, it should be identified. Other would-be buyers should be allowed to look at Alitalia’s books. If, after due diligence, no bid materialises, Alitalia should be put out of its misery.
Rome has more lawyer MPs, fewer in dock by Guy Dinmore nel Financial Times del 24 Aprile 2008
More women and lawyers, fewer workers, but still dominated by men in their 50s – the shape of Italy’s new parliament is slowly changing with the times.
One disputed statistic that sets Italy apart from its EU neighbours, however, is how many MPs making the law actually have legal problems of their own.
Before last week’s elections, journalists Marco Travaglio and Peter Gomez published “If you know them, avoid them” – a rogue’s gallery of candidates from all parties with troubled pasts. These ranged from judicial investigations to serious court convictions, including Mafia association.
According to the two journalists’ research, the number of elected MPs allegedly “in trouble with the law” had fallen from 91 members – or nearly 10 per cent – of the old parliament to about 70.
The new total includes 45 from the victorious centre-right People of Liberty party led by Silvio Berlusconi (who has two court cases pending), seven from the allied Northern League, 13 from the opposition Democratic party, and five from the centrist Catholic UDC.
“Remember we are at the start of the new parliament and the numbers will go up,” cautioned Mr Gomez. Italy’s lengthy appeals process and the statute of limitations mean only a minority of convicted politicians end up behind bars.
The final figures are not yet out – under Italy’s opaque voting system, parties present candidates on multiple lists and the party leaders decide after the results who will enter parliament on April 29.
Beppe Grillo, a comic and activist who casts himself as the anti-politician, said: “The 70 were elected for lack of information.”
Mr Grillo’s signature-gathering protest campaign wants convicted candidates kept out of parliament. Half-joking, he says convictions help win elections, drawing the votes of the Mafia, lobby groups and tax evaders.
Deborah Bergamini, newly elected for the People of Freedom, dismisses the list of 70, on which she appears, as politically biased and inaccurate.
She denies she was formally investigated in relation to a bankruptcy case. She also says she was cleared by Rai, the state broadcaster where she was a director, of accusations that she connived with Mr Berlusconi’s Mediaset television channels to co-ordinate news broadcasts in his favour.
Publication by the media of her private telephone conversations were illegal and offensive, she adds.
A former Bloomberg journalist, Ms Bergamini is one of many newly elected women.
For the first time, more than 20 per cent of legislators are women. That places Italy just over the European average – ahead of France and the UK, and behind Spain and Germany.
The increase is largely due to the defeated Democratic party, which almost fulfilled its leader Walter Veltroni’s campaign pledge of making women one third of its MPs. A party spokesman said 100 women were elected in the two chambers, about 30 more than the centre-right People of Freedom.
While dominated by older men, notably lawyers and entrepreneurs, Mr Berlusconi’s party does have diversity. It includes the only Muslim MP – Souad Sbai, a Moroccan women’s activist – and Fiamma Nirenstein, a well-known Jewish supporter of Israel.
One disputed statistic that sets Italy apart from its EU neighbours, however, is how many MPs making the law actually have legal problems of their own.
Before last week’s elections, journalists Marco Travaglio and Peter Gomez published “If you know them, avoid them” – a rogue’s gallery of candidates from all parties with troubled pasts. These ranged from judicial investigations to serious court convictions, including Mafia association.
According to the two journalists’ research, the number of elected MPs allegedly “in trouble with the law” had fallen from 91 members – or nearly 10 per cent – of the old parliament to about 70.
The new total includes 45 from the victorious centre-right People of Liberty party led by Silvio Berlusconi (who has two court cases pending), seven from the allied Northern League, 13 from the opposition Democratic party, and five from the centrist Catholic UDC.
“Remember we are at the start of the new parliament and the numbers will go up,” cautioned Mr Gomez. Italy’s lengthy appeals process and the statute of limitations mean only a minority of convicted politicians end up behind bars.
The final figures are not yet out – under Italy’s opaque voting system, parties present candidates on multiple lists and the party leaders decide after the results who will enter parliament on April 29.
Beppe Grillo, a comic and activist who casts himself as the anti-politician, said: “The 70 were elected for lack of information.”
Mr Grillo’s signature-gathering protest campaign wants convicted candidates kept out of parliament. Half-joking, he says convictions help win elections, drawing the votes of the Mafia, lobby groups and tax evaders.
Deborah Bergamini, newly elected for the People of Freedom, dismisses the list of 70, on which she appears, as politically biased and inaccurate.
She denies she was formally investigated in relation to a bankruptcy case. She also says she was cleared by Rai, the state broadcaster where she was a director, of accusations that she connived with Mr Berlusconi’s Mediaset television channels to co-ordinate news broadcasts in his favour.
Publication by the media of her private telephone conversations were illegal and offensive, she adds.
A former Bloomberg journalist, Ms Bergamini is one of many newly elected women.
For the first time, more than 20 per cent of legislators are women. That places Italy just over the European average – ahead of France and the UK, and behind Spain and Germany.
The increase is largely due to the defeated Democratic party, which almost fulfilled its leader Walter Veltroni’s campaign pledge of making women one third of its MPs. A party spokesman said 100 women were elected in the two chambers, about 30 more than the centre-right People of Freedom.
While dominated by older men, notably lawyers and entrepreneurs, Mr Berlusconi’s party does have diversity. It includes the only Muslim MP – Souad Sbai, a Moroccan women’s activist – and Fiamma Nirenstein, a well-known Jewish supporter of Israel.
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