Over the weekend, Fiat Chrysler Automobiles (FCA) Italy S.p.A. confirmed that it is in talks with the Italian Government to obtain a guarantee from SACE, Italy’s Export Credit Agency under the recently enacted Liquidity Decree after much media speculation. Italian Prime Minister Giuseppe Conte stated on Saturday, that FCA was entitled to apply for the government-backed loans due to the thousands of people the company employees throughout the country, despite having global operations.
Under the Italian government’s Liquidity Decree, the total amount of the credit facility may be equivalent to 25% of the consolidated turnover of FCA’s industrial entities in Italy, or up to €6.3 billion ($6.8 billion USD). FCA said talks were ongoing with lender Intesa Sanpaolo for a three-year credit facility exclusively dedicated to the group’s activities in Italy.
FCA is Italy’s largest industrial group, directly employing 55,000 people at its 16 plants and 26 dedicated R&D sites. In addition, over 200,000 workers at 5,500 highly-specialized Italian suppliers are directly linked to the successful continuity of FCA operations, 40% of the €50 billion in annual revenues generated by the Italian automotive components sector is driven by supply to FCA.
Overall, the automotive sector is a key part of the Italian industry and is both in terms of relevance and structure. On its own, it equates to about 6.2% of the Italian GDP and in terms of employment to about 7% of the entire manufacturing sector. FCA’s position on the matter is strengthened by the company’s extensive investment plan for Italy. Products like the new electrified 2020 Jeep® Renegade and Compass 4xe models as well as the all-new 2021 Fiat 500 electric, will be manufactured in Italy.
The news has sparked lots of controversy from Italian lawmakers. The ruling party PD’s deputy president, Andrea Orlando, said on Twitter that if a company asked the Italian government for sizable financing, it should bring its base operations back to Italy from the Netherlands.
FCA has restarted operations at a number of the company’s facilities across Italy. According to FCA, the objective of the current discussions is to strengthen the financial resilience of the Italian automotive system as a whole, during an inevitably long and challenging period of recovery.