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Fiat chairman Sergio Marchionne said Friday he will keep his title of President of the European Automotive Manufacturers Association [ACEA], a day after he excoriated Volkswagen executives for calling for his resignation and suggesting in public that Fiat would not survive the economic recession in Europe without a government rescue.

The ACEA CEOs met at the Paris Motor Show, as they do every year, Friday morning after Marchionne, meeting with reporters Thursday, dared VW executives to call for his resignation in the meeting, in compliance with the lobbying group's governance. Marchionne called "reprehensible" recent actions by VW executives, including supervisory board chairman Ferdinand Piech (right) and CEO Martin Winterkorn (left) for calling for his resignation from ACEA through the VW press office.

Indeed, Stephan Gruehsem, VW's chief spokesman, said in July that Marchionne was not qualified to head the ACEA and threatened that VW would quit the organization after a New York Times article said that Marchionne blamed VW's pricing strategy for creating a "bloodbath" in Europe.
The fracas is one chapter in what has become an unusually (for the auto industry) public war of words between Marchionne and VW officials. Besides calling out VW for aggressive pricing in Europe (in his role as Fiat CEO, not ACEA president), Marchionne has also angered VW by suggesting that plant closures in Europe to cut the over-capacity of factories should be be coordinated centrally with the European Union, not left to the individual companies.

In other words, Marchionne wants the EU to potentially tell VW to close a plant in Germany, which it has not ever done since after World War Two, rather than all the plants being affected in France, Italy, Poland and elsewhere. Marchionne said that was his own view, not one that would ever be adopted by ACEA and taken to the EU.

Marchionne, known for a quiet but blunt style, said Thursday about VW officials' criticism of him:

"I don't know Piech, or his press officer... but I don't give a flying hoot about their opinions... which they can take and stick in their G5."

VW has used steep discounting to drive up its market share in Europe as the economy tanks, inflicting a lot of hurt on Fiat, Peugeot and Renault. General Motors TK Susan Docherty said in her press briefing that no profit can be made in Europe as long as Fiat, VW and Peugeot, she singled out, discount vehicles by as much as 30%.

And then there is VW's public stalking of Alfa Romeo. Winterkorn recently reiterated his pitch this week through the media to Marchionne that VW would still like to buy Fiat's Alfa Romeo brand from the Italian automaker. Winterkorn said on Aug. 31 he still finds the Italian brand owned by Fiat "attractive." Piech first expressed VW's interest in the Italian premium brand two years ago at the Paris Motor Show.

"Mr. Piech drop it, go and sing somewhere else," Marchionne said Wednesday during a speech in Turin. "I am not surprised by the German boasting." It is somewhat surprising that VW should want another brand. It already has two too many in its stable by the reckoning of most analysts with Skoda and Seat in Europe, which not only compete with the VW brand with nearly identical vehicles, but in some cases get better reviews than the Volkswagen versions.

But that's not all. VW's chief financial officer suggested last Wednesday that at least one manufacturer, strongly suggesting Fiat, will not withstand the current slow down in Europe without government aid. "It is unclear if all carmakers will survive without governmental help," VW CFO Hans Dieter Poetsch told reporters on Thursday. "Especially carmakers in southern Europe that produce small cars will be affected."


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  • 72 Comments
      leo
      • 2 Years Ago
      he does have a point...VWs global dominance strategy is to dry out any cash any of it's competitors have in EU since it has more money than any of them... I think they will find it hard once they have to return to profitability with everyone being used to getting 20% discounts on cars due to this VW drive . It's going to lead to a collapse, did they not learn from the US auto discount strategy and how that left them broke?
      rcavaretti
      • 2 Years Ago
      VW has become the Bain Capital of the automotive segment. If the historical lesson of GM growing too big for its britches is any prophetic indicator, then as someone else noted earlier, 'the bigger they are, the harder they fall .'
      bluerings07
      • 2 Years Ago
      The VW execs look like they should be villains from a movie.
      rcavaretti
      • 2 Years Ago
      What is it with the double posting here AB? I hit the button exactly once. Fix the system.
      papadb24
      • 2 Years Ago
      VW SportWagen TDI 50 MPH Plus Emission Compliant in all 50 States, No wonder why the competition is pissed!
      rkeeeballs
      • 2 Years Ago
      That's our man...telling it like it is , right to your face !
      talari
      • 2 Years Ago
      Why are Fiat 500s so expensive?
        Mary
        • 9 Months Ago
        @talari
        why smart is so expensive? why VW is so expensive?
      Avinash Machado
      • 2 Years Ago
      He is telling it like it is.
      dice
      • 2 Years Ago
      I understand fiat's issue, but as a CEO of such a major company its immature to tell VW that they are getting too big, and destroying other European car companies. It's capitalism, VW is doing its job of being profitable and succeed. No other company should tell them they are getting too big and eating the market. What happend to competition? Fiat, grow up, and make a car that sells. Maybe you can be the next VW if you try harder.
        imoore
        • 2 Years Ago
        @dice
        Profit and success has nothing to do with VW's ambitions. It's all about power and dominance.
        techie69
        • 2 Years Ago
        @dice
        Really dice, that's the best you can come up. VW is not even profitable, its just a market raider for n#1, well I guess your opinion tells alot about how "informed" you are.
          techie69
          • 2 Years Ago
          @techie69
          Cause operations in China and the numbers that come out make ANY mftrs, I mean ANY mftrs numbers make Enron accounting look proper!
          sjmoo
          • 2 Years Ago
          @techie69
          @jasmith2031032, I'm not sure where you got your information, but both BMW and Mercedes-Benz posted larger profits (as a percentage of income) last year than VW AG. Daimler as a whole was drug down by Smart & Maybach, but they were still profitable.
          DuBirus
          • 2 Years Ago
          @techie69
          Hey how come u haven't mentioned VW stellar operations in China that is helping the company?!
        Mary
        • 9 Months Ago
        @dice
        i think that you are confuse. check on yahoo this news from 2014 "Volkswagen’s Sales Disaster Continues" fiat own ferrari and maserati. Ferrari was named the most powerful brand in the world for the second year running and maserati did the record of sales % in 2014 inform yourself better
        theblackemblem
        • 2 Years Ago
        @dice
        Did you read the article? Volkswagen is no better for claiming that "Fiat would not survive the economic recession in Europe without a government rescue".
          Georg
          • 2 Years Ago
          @theblackemblem
          you have absolutly no idea what you are talking about ,,, look at shareholder infromation befor claiming such a BS about VW first half 2012 VAG made a win of 10.1billion Euro befor tax... numbers Macaroni can only dream about with his shitbox Fiat company. VAG has so much money in the pocket that they could buy the whole Fiat empire if they would like to do...
        gtv4rudy
        • 2 Years Ago
        @dice
        Southern Europe is in a major recession and people can't afford to buy new cars right now and that includes small cars like Fiat.
      • 2 Years Ago
      [blocked]
        1STH
        • 2 Years Ago
        nonsense. VWs are robust...unlike their el-cheapo japanese and korean counterparts.....that are reliable for 5 years, then fall apart at the seams.
          1STH
          • 2 Years Ago
          @1STH
          no i feel sorry for you....being satisfied with your soul-less asian appliance rather than buying cars that are actually engineered!
          gtv4rudy
          • 2 Years Ago
          @1STH
          1sth, .. shut the crap up.
          • 2 Years Ago
          @1STH
          [blocked]
        ANDREW
        • 2 Years Ago
        Ive had 12 VWs...not one was ever a problem
          • 2 Years Ago
          @ANDREW
          [blocked]
          1STH
          • 2 Years Ago
          @ANDREW
          exactly. people like WMB are deluded by their terrible taste in cars....so they brainwash themselves into thinking the appliance they are driving is interesting.
      ozibuns
      • 2 Years Ago
      As much as I admire Marchionne's abrasive style, he cannot be serious about expecting the EU to facilitate the plant closures that are overdue and necessary in order for certain OEMs to balance supply and demand? Is this Russia or China? Fiat's lack of foresight in predicting market trends and consequently not developing appropriate products, and the severe cut in R&D and capital expenditure coupled with its (Italian) work force's notoriously lackadaisical approach to quality contrast sharply with VW's aggressive acquisitions and enormous spending spree over the last five to ten years. Marchionne has failed to fix Alfa: ask any dealer in Europe struggling to survive on Mitos and Guiliettas, or the US Fiat network awaiting the oft delayed Alfa launch. Marchionne may like to lay the blame elsewhere, but years of inefficient work practices, unproductive workforces, misplaced investment and incompetent management have led Fiat (and indeed PSA) o this point. Why should taxpayers and the chronically corrupt and bureaucratic EC have to clean up their mess??
        Colin
        • 2 Years Ago
        @ozibuns
        I'm inclined to agree. But VW has targeted Fiat's small cars with the new Up. This is taking sales from Fiat, as VW intended, but none of the Up family is built in Germany, rather in low cost Eastern Europe. And now Fiat has brought the Panda home from low cost and reliable Poland to strike-prone and inefficient Naples. And still the workforce in Italy wants more! Marchionne has been wrong, in my opinion, to suspend development, because there are still people needing to buy new cars and Fiat's refusal to specify old cars sensibly and price new ones competitively is hurting. Plus Renault's low cost Dacia brand is stealing a lot of sales and will continue to do so, because it makes the low cost sensible cars Fiat used to.
      telm12345
      • 2 Years Ago
      Marchionne is right on!!! This is predatory pricing and VW is big enough now that they can take this type of risk. BUT as John McGee and other economists have realized (but not VW apparently), it will only damage them in the long-term. Marchionne is the smartest guy in this room and I am sure he's at a point of frustration that no else see's what he's capable of seeing or has the guts to call VW on it.
        RocketRed
        • 2 Years Ago
        @telm12345
        FIAT should either lawyer up and take the whinging to DG Competition in Brussels or shut up. There is no "dumping" within the common market. If Sergio doesn't think it's fair that VW can offer discounts to keep up market share, because they have money in the bank to take any losses, then he needs to look in the mirror to see why FIAT is not in a similar position.
        • 2 Years Ago
        @telm12345
        [blocked]
          telm12345
          • 2 Years Ago
          Capitalism, YES! Absolutely! But even capitalism needs some form of ethics. Just because you can, doesn't make it ethical nor legal. This is a Walmart waiting to happen.
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