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/.

WAMU 88.5

Art Beat With Lauren Landau, July 30

You can keep things old school with a classic musical and an exhibit featuring watercolor paintings from the 1800s.
NPR

Farming The Bluefin Tuna, Tiger Of The Ocean, Is Not Without A Price

Scientists are trying to raise prized bluefin tuna completely in captivity. An experiment at a Baltimore college is the first successful attempt in North America.
NPR

Senate's Highway Trust Fund Bill Sets Up Conflict With The House

A short-term fix for the nearly empty Highway Trust Fund is a step closer to President Obama's desk. Congress has been talking about the long-term problems with the construction account, but the two chambers have not agreed on a long-term solution.
NPR

OkCupid Sometimes Messes A Bit With Love, In The Name Of Science

OkCupid, the online dating site, disclosed Monday that they sometimes manipulate their users' profiles for experiments.

Leave a Comment

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