Fiat's Woes A Symptom Of Italy's Industrial Malaise | WAMU 88.5 - American University Radio
Filed Under:

Fiat's Woes A Symptom Of Italy's Industrial Malaise

Play associated audio

Automaker Fiat announced its commitment to remain in Italy after a meeting Saturday between the company's CEO and the country's president.

Fiat had threatened to shut down its operations in Italy unless it received additional state assistance. The crisis came at a time the entire country is undergoing a steep decline across all industrial sectors.

More than 100 years old, Fiat is the symbol of Italy's industrial revolution and it's the country's biggest employer. But sales in its most important market have plunged, and Fiat plants are operating at less than 50 percent capacity.

Fears that Fiat would shut down its Italian plants triggered charges of ingratitude, as the automaker has been the major beneficiary of massive state subsidies.

For years, the automaker and other big businesses were dependent on state-subsidized capitalism. They barely bothered to invest in research and development, yet they could survive without opening up to foreign investors.

But a decade of globalization and three years of the euro crisis have accelerated the country's industrial decay.

There's been no growth for a decade, and Italy has virtually lost its once-flourishing chemical industries. Its world-renowned textile and shipbuilding sectors have been cut to the bone. The last remaining steel plant in the southern city of Taranto has been partially shut down on magistrates' orders — it's obsolete and poses serious health risks.

On the island of Sardinia, Alcoa is abandoning a top-quality aluminum plant due to exorbitant energy costs, 30 percent higher than in the rest of Europe. Similar problems are afflicting the mining, electronic, transportation and home appliance sectors.

In the first six months of this year, industrial output plummeted by more than 7 percent.

Italy is also undergoing a wave of strikes, factory occupations and often-violent workers' protests. With unemployment soaring, the media have raised the specter of a return to the social tensions of the late 1960s that many analysts say fomented a long period of domestic terrorism.

In a further blow, Prime Minister Mario Monti has announced the economy is headed for a 2.4 percent contraction this year, twice the previous forecast.

Monti says that next year, there will be light at the end of the tunnel, but it's unclear how a recovery is possible given Italy's endemic problems: inadequate infrastructure, suffocating red tape, a justice system that moves at a snail's pace and widespread corruption.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

The Gift Of Eternal Shelf Life: 'Tuck Everlasting' Turns 40

In Natalie Babbitt's celebrated classic, a young girl stumbles upon a secret spring and the family the spring has given eternal life to. Babbitt says she wrote the book to help kids understand death.
NPR

Food Industry Drags Its Heels On Recyclable And Compostable Packaging

A new report from two environmental groups reviewed the recyclability and compostability of packaging from 47 food companies. It found few examples of companies that have prioritized waste reduction.
NPR

Guantanamo Bay A Sticking Point Between U.S., Cuba Since 1903

Guantanamo Bay is home to the United States' oldest overseas base. Melissa Block talks to Vanderbilt History Professor Paul Kramer.
NPR

With 'Discover' Feature, Snapchat Bucks Social Trend In News

Snapchat says social media likes and shares aren't what makes a story important. The ephemeral messaging app has rolled out Discover, featuring multimedia articles from major news brands.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.