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Fiat Comes to America

January 25, 2011

The economic crisis has seen the rise of a new important multinational firm in Indiana—Fiat.  This Italian carmaker has not sold a car in the US in 27 years (although it will unveil the Fiat 500 in America this month), yet it now owns 20 percent of Chrysler, with plans to increase its ownership.  However, while Fiat aggressively expands overseas, it was also threatening to shut down its factories in Italy.  While many automakers control a large share of the market in its home country, the same cannot be said of Fiat, which only has about one-third of the market.  In addition, compared to its other factories, Fiat’s Italian plants are much less efficient.  In the end, Italian unions agreed to Fiat’s proposal.

However, with the acquisition of Chrysler, Fiat will be a brand with a global reach well beyond Italy.  For instance, though Chrysler, Fiat will now have a strong presence in Indiana.  Fiat/Chrysler recently announced that it will be investing $843 million in a plant in Kokomo, Indiana.  This factory makes transmissions, and will be retooled to produce a new Fiat transmission which will be placed in Chrysler vehicles.  As a result, Indiana’s ties with Europe will only be strengthened as another multinational company invests in the Hoosier State.

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