The Italian government has signed off on approximately $7 billion in loan guarantees for Fiat Chrysler Automobiles in an effort to shore up a key piece of the country's manufacturing sector amid the turmoil caused by the COVID-19 pandemic.
FCA's parent company is headquartered in The Netherlands with a corporate office also in London, but the company's roots and impact on the economy in Italy run deep. FCA notes that it is Italy's largest industrial group, and it directly employs 55,000 people at 16 plants and 26 research and development sites.
The funding, according to an FCA announcement Wednesday, "will be dedicated exclusively to FCA's activities in Italy and to support the more than 10,000 small and medium enterprises that make up the Italian automotive sector."
The three-year, 6.3 billion-euro credit facility, as it's called, was equivalent on Wednesday to about $7.1 billion. FCA will borrow the funds through Intesa Sanpaolo, Italy's largest banking group, and the loan is primarily guaranteed through SACE, Italy's Export Credit Agency.
FCA's chief operating officer for Europe, Pietro Gorlier, said in a statement that the funding would benefit Italy's economy.
"Faced with an unprecedented crisis, this is an example of Italy coming together to safeguard a vital industrial ecosystem. The combined strengths of government, our nation's largest bank and Fiat Chrysler Automobiles have been put to work to ensure the Italian automotive system as a whole can continue to play its role in the restart of Italy's economy; 100% of the money this facility provides will be directed to our Italian business and so to the thousands of companies and hundreds of thousands of workers who depend on the successful relaunch of our entire sector as we continue a transformative shift to a new electric- and hybrid-powered future," Gorlier said.
The company said the loan process provides a potential model for assistance to other business sectors in Italy.
The country has been hit hard by both the coronavirus and the economic impact from the virus. The World Health Organization on Wednesday put the country's death toll at 34,675 and its case count at 238,833. FCA itself had lost 22 members of its global workforce to the disease as of early May, according to CEO Mike Manley.
Italy's economy also has suffered, with Reuters reporting this week that it's expected to contract by at least 8% this year because of lockdown measures.
(c)2020 Detroit Free Press
Visit the Detroit Free Press at www.freep.com
Distributed by Tribune Content Agency, LLC.