‘FCA agrees to conditions for €6,3 billion state-guaranteed loan’
According to Italian financial newspaper Sole 24 Ore on Sunday, Fiat Chrysler (FCA) is prepared to agree with the conditions – mainly on job preservation – the Italian state is stipulating for a state-guaranteed loan of €6,3 billion. The States Council is said to agree, but the Minister of Economy has still to sign.
The demand for a loan with state guarantee has fueled the debate in political Italy whether compensations should accompany it. The group’s headquarters are in Amsterdam in the Netherlands, and a big part of its operations are conducted in the US.
“A company asking a substantial sum of money from the Italian State has to reinstall its legal seat in the country,” said Andrea Orlando, vice-president of the (co-ruling) Democrat Party in May when the demand was debated first.
The three-year loan would come from Intesa Sanpaolo, the number one bank group in Italy, with agreed and a bank guarantee of 80% was asked by FCA Italia from SACE, the Italian agency for export credits in the frame of a recent decree on aiding companies to manage the corona crisis.
In the first quarter of this year, FCA lost 1,7 billion euros due to the corona crisis. Until now, the most significant state-guaranteed loan to a car manufacturer in Europe was the one for Renault in France, representing some 5 billion euros.
No job cuts until 2023
FCA employs some 55 000 people directly in Italy and is also working with 5 500 suppliers in the country, representing another 200 000 persons indirectly working for them. The car industry is a key sector in the Italian economy, representing 6,2% of the total GNP.
According to the newspaper, the group would engage itself in investing 5,2 billion euros in Italy on existing and new projects, and 1,2 billion on some 1 400 suppliers from abroad. FCA declares it won’t cut jobs until 2023. If FCA doesn’t comply with the conditions, it faces a fine to the tune of 500 million euros.