The Italian government has signed around $ 7 billion in loan guarantees for Fiat Chrysler Automobiles in an attempt to shore up a key part of the country’s manufacturing sector amid unrest caused by the COVID-19 pandemic.
FCA’s parent company is headquartered in the Netherlands and also headquartered in London, but the roots of the company and its impact on the Italian economy run deep. FCA notes that it is the largest industrial group in Italy and that it directly employs 55,000 people in 16 factories and 26 research and development sites.
The funding, according to an FCA announcement on Wednesday, “will be dedicated exclusively to FCA’s activities in Italy and to support the more than 10,000 small and medium-sized businesses that make up the Italian automotive sector.”
The € 6.3 billion three-year credit facility, as it’s called, was equivalent to around $ 7.1 billion on Wednesday. FCA will borrow the funds through Intesa Sanpaolo, the largest Italian banking group, and the loan is mainly guaranteed by SACE, the Italian export credit agency.
FCA’s director of operations for Europe, Pietro Gorlier, said in a statement that the funding would benefit the Italian economy.
“Faced with an unprecedented crisis, this is an example of Italy joining together to safeguard a vital industrial ecosystem. The combined forces of the government, our country’s largest bank and Fiat Chrysler Automobiles have been put to work to secure the Italian automotive system as a whole. can continue to play its role in restarting the Italian economy; 100% of the money this facility provides will be directed to our Italian business and therefore to the thousands of businesses and hundreds of thousands of workers who depend on the successful relaunch of our entire industry as we pursue change transformer towards a new electric and hybrid future, ”said Gorlier.
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The company said the loan process offers a potential model of assistance to other lines of business in Italy.
The country has been hit hard by both the coronavirus and the economic impact of the virus. The World Health Organization on Wednesday estimated the country’s death toll at 34,675 and its number of cases at 238,833. The FCA itself had lost 22 members of its global workforce to the disease in early May, according to CEO Mike Manley.
The Italian economy has also suffered, with Reuters reporting this week that it is expected to contract by at least 8% this year due to the lockdown measures.
Contact Eric D. Lawrence: [email protected] Follow him on Twitter: @_ericdlawrence.