Fiat's Bertone Site: The Key To Chrysler's International Future
October 01 2009 - 5:29PM
Dow Jones News
The idle Carrozzeria Bertone manufacturing site, where Sergio
Marchionne plans to make vehicles for Chrysler Group LLC and Fiat
SpA (FIATY), has a history of helping to put iconic cars on the
road. Marchionne is probably hoping that some of its past magic
rubs off on his efforts.
Located a few kilometers from Fiat's head offices, the site used
to belong to Bertone, a prominent name in car design and niche
manufacturing until its demise last year. Founded in 1912, Bertone
made its mark in the 1960s when it worked on cars such as the
Ferrari 250 GT, the Alfa Romeo Giulietta and the Lamborghini
Miura.
Now, with Fiat completing its purchase of the site Thursday,
proud and fiercely loyal unionized workers remain apprehensive
about the Italian group's plans for them. Fiat's success with
Bertone will be critical to both the future of Fiat and
Chrysler.
Marchionne, the chief executive of Chrysler and Fiat, intends to
invest EUR150 million ($218.3 million) in the plant over the next
three years to transform it into a niche producer of vehicles.
Chrysler products made in Turin will be shipped throughout Europe
and imported into North America.
Chrysler will end its production partnership with Magna
International Inc. (MGA), which is the sole manufacturer of
Chrysler models on the European continent. Magna assembles the
Chrysler 300C sedan and Jeep Grand Cherokee. That work would be
moved to Bertone.
Chrysler's long-term survival rests with what Marchionne will do
to expand the auto maker's international sales. The company relies
on the North America market for about 90% of its sales. That market
has been rocked over the past year by an economic recession.
The story of Chrysler's future Italian manufacturing home could
be a chapter taken from the auto-making history in the U.S.
Bertone's site, encompassing four buildings and employing 1,140
workers, was once a hub of activity with the capacity to produce
70,000 vehicles a year. Then, after the death owner Giuseppe
Bertone in 1997, the plant ran into financial difficulties and
eventually went idle starting in September 2006.
The site fell victim to an industry trend that saw major car
makers bring in-house the production of limited series of their
models such as convertibles. The last model to roll off the Bertone
line was BMW AG's Mini Cooper, for which Bertone did the paintwork.
The Bertone plant went into special administration two years
later.
To draw attention to the plant's problems, a small group of
workers lived in a camper van parked outside the factory for more
than a year in 2007.
Bertone's widow, Lilli, stopped by the camper once and handed
the workers a tray of home-made cookies.
"She said 'I am with you. I am like your mother. Hold on
tight'," said Massimo Gazzitano, a worker at Bertone for 30 years.
"We still have those cookies; we wanted to give them back to
her."
Last August, Fiat bought the site at auction, keeping Bertone
from liquidating.
"We achieved an important result. Bertone didn't go bankrupt,
even though it was a close call for some time. But I am waiting for
Fiat to tell us what will happen now, so I am still worried," said
Rocco Vallone, who joined his father and uncle at Bertone in 1977,
when he was 18.
Lino La Mendola, a representative of the union, Fiom, said it is
essential that the workers keep their acquired rights in terms of
salary and ranking.
With the sale officially completed Thursday, the union may not
have long to wait to hear what Marchionne intends to do.
-By Milena Vercellino, contributing to Dow Jones Newswires;
giles.castonguay@dowjones.com
(Jeff Bennett in Chicago and Gilles Castonguay in Milan
contributed to this article.)