Fiat's decline impacts Turin’s economy

In the shadow of the Alps, Turin, Italy's historic automotive capital, is facing a critical juncture as its once-thriving car industry teeters on the brink of decline. The city, home to Europe's oldest car factory and the birthplace of Fiat 125 years ago, now embodies the broader challenges confronting the European automotive sector.

Turin's Mirafiori plant, formerly the crown jewel of Fiat's manufacturing empire, stands as a stark symbol of the industry's downturn. Once employing 60,000 workers and producing up to a million cars annually in its 1960s heyday, the factory now operates at a fraction of its capacity. Currently, it manufactures the electric Fiat 500 and two Maserati models, but production has been frequently suspended due to low demand. As a result, 2,800 workers find themselves on furlough with reduced pay.

Giacomo Zulianello, a plant worker and FIOM Cgil trade union official, grimly observes, "Mirafiori has already been closed. It's just that it reopens sometimes." This sentiment echoes throughout the city, where the word "decline" has become taboo, according to urban sociologist Luca Davico of Turin's Polytechnic.

Add WION as a Preferred Source

The roots of Turin's automotive troubles can be traced back to Fiat's gradual loss of Italian identity. The company's merger with Chrysler in 2014 and subsequent fusion with PSA to form Stellantis in 2021 marked significant shifts in its corporate structure and focus. Over the past four decades, Turin has lost four of its car plants, starting with the iconic Lingotto in 1982 and ending with Grugliasco in 2022.

The impact on Turin's economy and workforce has been profound. With 50,000 to 60,000 jobs still tied to the automotive industry, the mood in the city is sombre. Workers are preparing for a national strike and march in Rome to press both the government and Stellantis to safeguard jobs.

Stellantis' Italian production is projected to fall below 500,000 vehicles this year, the lowest since 1958, according to the FIM Cisl union. This decline mirrors industry-wide challenges affecting even market leaders like Volkswagen. The workforce at Mirafiori is ageing, with an average age of 57-58, and younger generations are increasingly disinterested in the automotive sector.

Francesco Zirpoli, a management professor at Venice's Ca' Foscari University, attributes the slump in Italian auto production to Stellantis' limited investments in new models, particularly for its Italian factories. "More than a mistake, it was a choice," he states. The shift from Fiat to Stellantis has also meant that Turin is no longer the primary hub for engineering and product development.

The human cost of this industrial decline is evident in the experiences of workers like Davide Manago, a FIM Cisl official and plant worker. Manago recounts the financial struggles faced during periods of furlough, with reduced salaries barely covering basic needs. "My fear is going back to that," he says, expressing hope that his children will find better opportunities outside Turin or even Italy.

Despite these challenges, Stellantis maintains that Mirafiori has a future. The factory produces gearboxes for electric and hybrid vehicles, hosts a recycling centre for car parts, and will begin manufacturing a new hybrid version of the Fiat 500 in late 2025. Additionally, the Italian government is in talks with Chinese automakers Dongfeng Motor Group and Chery, potentially ending Stellantis' monopoly as the sole major national car producer.

Turin has attempted to diversify its economy, promoting itself as a tourism destination and knowledge hub with multiple universities and academies. The city also boasts a thriving aerospace industry and is home to Juventus, Italy's most successful soccer club. However, these efforts have yet to fully compensate for the decline in automotive manufacturing.