Fiat Chrysler entitled to seek state-backed loan, says Italian PM

by SpeedLux
Fiat Chrysler Automobiles (FCA)

Italian Prime Minister Giuseppe Conte stated on Saturday that Fiat Chrysler Automobiles (FCA) was entitled to apply for the country’s state-backed loans as the automaker employs thousands of workers in the country, even though its legal base is located outside the country.

The Italian-American group confirmed on Saturday its Italian unit was working with the government to obtain state guarantees on a 6.3-billion-euro ($6.8 billion) loan facility designed to help Italy’s automotive industry, comprised of about 10,000 small and medium-size businesses.

The coronavirus outbreak, which has hit the country hard, put the brakes on demand for new vehicles and forced automakers to stop most production, has caused significant crisis within auto industry.

Fiat Chrysler Automobiles NV (FCA) stated in a statement that discussions were ongoing with lender Intesa Sanpaolo for a three-year credit facility exclusively dedicated to the automaker’s activities in Italy.

Asked if FCA, which has its legal headquarters located in the Netherlands, could get a loan guaranteed by the Italian government, Conte said the automaker qualified.

“We’re not talking about the parent company, we’re talking about the group’s companies in Italy, which employ thousands of people,” Conte said.

FCA runs several plants and research and development centers in the country, directly hiring around 55,000 people.

Furthermore, more than 200,000 people work in Italy’s 5,500 parts suppliers and 120,000 people in car dealers and service companies, with the automotive industry representing almost 6.2% of Italy’s domestic product, FCA stated.

News that the automaker asked the Italian government for liquidity support has attracted criticism.

The ruling party PD’s deputy president, Andrea Orlando, wrote on Twitter that if a company asked the Italian government for loan, then it had to bring back its legal base to Italy.

During April, the Italian government had approved on emergency decree that will offer over 400 billion euros ($432 billion) worth of liquidity and bank loans to companies impacted by the ongoing coronavirus crisis.

FCA stated the state-backed credit facility it is seeking will have “the sole purpose of providing operational support for payments to Italian suppliers to support their liquidity and, at the same, support resuming production and investment at Italian plants.”

The automaker has gradually resumed operations in Italy since the end of April.

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