(Bloomberg) -- Stellantis NV vowed to replenish its Italian plants with new models over the next few years as part of a push to repair relations with government and union leaders infuriated by dramatic declines in production.
None of the company’s sites in Italy will be shut down, and 2026 capacity will increase, driven by the new entries, Jean Philippe Imparato, the head of Stellantis’ enlarged Europe region, said during talks in Rome with unions and Industry Minister Adolfo Urso on Tuesday.
The carmaker plans to invest €2 billion ($2.1 billion) in Italy next year and committed to €6 billion in orders from its suppliers in the country, Imparato said.
Under the plan, Stellantis foresees Italian production of 500,000 vehicles in 2025 and a 50% increase in 2026 to around 750,000 units, Imparato added. That’s roughly the level of 2023. Imparato said he couldn’t pledge to bolster production to 1 million units as previously demanded by the Italian government.
“Next year will be tough,” he said during a press conference in Rome. “I don’t want to make promises I can’t keep.”
Stellantis, the multinational automaker forged from the merger of Fiat Chrysler Automobiles and France’s PSA Group, will build a new generation of Fiat 500s at its Turin Mirafiori plant in coming years. It will also start making vehicles on a new platform at its southern Italian Pomigliano facility, it said.
For its part, the government led by Prime Minister Giorgia Meloni has said it’s ready to spend more than €1 billion for the sector in 2025.
Stellantis Chairman John Elkann has been under pressure to halt a plunge in car production that’s put the group’s roughly 40,000 jobs in Italy at risk. Tuesday’s announcement comes after the carmaker ousted Chief Executive Officer Carlos Tavares earlier this month.
While automakers across Europe are struggling with waning demand for electric vehicles and increasing competition from Chinese manufacturers such as BYD Co., Italy’s situation was exacerbated by Tavares’s decision to move production of some Stellantis models to lower-cost countries like Poland.
“After Tavares’s resignation the atmosphere has changed, and today’s plan proves it,” Urso said at the press conference.
The new push from Stellantis is a marked contrast to what’s happening in Germany, where rival Volkswagen AG is locked in difficult talks with unions on a plan that may see the automaker shut plants in its home market.
Tavares had cited high energy costs and the lack of transportation infrastructure as reasons for shutting Italian plants such as Mirafiori for weeks. His push to produce in cheaper countries led to a series of clashes with Rome.
Since ousting Tavares, Elkann has made efforts to reassure governments in Italy and abroad on future investments.
The group’s recent focus on Italy has raised alarm bells in neighboring France. Elkann met President Emmanuel Macron at the Elysee Palace in Paris on Monday to offer reassurances on Stellantis’ commitments to the country, the Elysee said in a statement.
--With assistance from Ania Nussbaum and Craig Trudell.
(Updates with quotes from press conference)
©2024 Bloomberg L.P.