"State guaranteed loan" is an expression that we hear more and more often today. This device allows a company in difficulty to ask its usual bank for a loan guaranteed by the State to support its treasury. In France, numerous companies have applied for such loans and the same is true in different European countries such as Italy for example. There, it is a national gem that asked for help, namely the Fiat Chrysler group, which includes the brands Fiat, Chrysler, Jeep, Maserati, Alfa Romeo, Dodge and Ram.
The objective is to "finance FCA's activities in Italy and provide additional support to some 10,000 small and medium-sized enterprises in the automotive supply chain," the group said in a statement. Thus, under the Italian government's liquidity decree (adopted in April to support the economy in the face of the coronavirus pandemic), the total amount of this credit may be equivalent to 25% of the consolidated turnover of industrial entities FCA in Italy, up to 6.3 billion euros.
Fiat Chrysler employs around 55,000 people in Italy in its 16 factories and 26 dedicated sites. The group claims to work with 5,500 subcontractors in the peninsula, for nearly 200,000 jobs. A key sector of the Italian economy, accounting for 6.2% of national GDP, the automobile has been hit hard by the epidemic of coronavirus.
This request did not go unnoticed since the vice-president of the (ruling) Democratic party, Andrea Orlando estimated: A company that demands a large sum of money from the Italian State must repatriate its headquarters to Italy ". As a reminder, the headquarters of the industrial group is based in the Netherlands. A argument quickly defeated by Council President Guiseppe Conte who indicated "We are not talking about the parent company. We are talking about the group companies in Italy which employ thousands of people". FCA is therefore eligible for this aid.
Despite this difficult context, FCA and the French group PSA have confirmed their intention to merge at the end of the year, beginning of 2021.