Fiat's Italian suppliers grab Chrysler lifeline
By Jennifer Clark
TURIN (Reuters) - In 2010 Italian carmaker Fiat made Dario Rinero a tempting offer: would the creator of exclusive handcrafted leather sofas make seats for the new Chrysler 300 sedan in the United States?
Fiat was fresh from its surprise swoop on Chrysler in 2009 and Rinero, the CEO of Poltrona Frau, immediately grasped that he had a unique chance to expand his car furnishings business from such luxury niches as Maserati and Ferrari into the U.S. mass market.
The hitch: Fiat needed the seats immediately. So Rinero scrambled, found a U.S. partner who could handle the fine leathers and parachuted in expert craftsmen from Italy.
Rinero says that experience led to the purchase of the U.S. company, Acord Holdings, bringing yet more opportunities. "We are now in talks with new clients to expand our growing business," he says.
The Poltrona Frau story highlights how Chrysler provides a potential lifeline for Italian automotive suppliers hit by a downturn that has sent Italy's annual car production tumbling to 400,000 from 1.12 million over the past 10 years.
The general decline is worrying enough for the 872 suppliers based in and around Turin. But with Fiat contributing 46.4 percent of their 17.9 billion euros ($23.4 billion) in annual revenue, they cannot afford to ignore developments at Fiat-Chrysler.
Though not without risk - as Daimler's (DAIGn.DE: Quote) ill-fated 1998 merger with Chrysler testifies - Fiat Chief Executive Sergio Marchionne is pushing ahead with deep integration with the U.S. carmaker to cut costs by sharing suppliers, manufacturing processes and the platforms on which different vehicles are built. Continued...