This article is within the Citizen Audit series.

Do not worry, will not be an article about Giambattista Vico and his "cycle".

In recent articles, you might have noticed that referenced repeatedly what business partners in Turin told me few decades ago, when they were a supplier of the local business champion, the FIAT car maker: that they could not anymore present the invoices for factoring, as were considered too risky.

Those events happened not long before Sergio Marchionne was chosen as the new CEO to sort out issues.

When this happened, I remember that many from Turin told me that they were worried that he had too much finance in his background.

Frankly, mostly overlapping with those who years later said when Meo left the group that he was just a marketing man and understood nothing about cars: typical local feed-back on outsiders or insiders that move elsewhere.

On Marchionne, I usually replied to those objections that, for all the engineering prowess shown by e.g. the research center, automotive was not just about products.

No, I did not lecture about "industry of industries" and what implied in terms of financing e.g. having to develop not just a new model but a new platform, and financing sales and operations.

I remember how in Rome, when was announced by the "ticker tape" on a TV showing news the payment by General Motors of a significant amount to avoid having to acquire FIAT, the remarks from somebody much higher in social status than me was about how long would take FIAT to waste that too.

Keeping balancing the two sides, resulted in seeing a company that late 1990s to early 2000s seemed up for dismemberment and acquisition instead acquiring and integrating Chrysler- including the Jeep brand, whose products were to become ubiquitous in Turin.

What happened over the last few years, even before the predecessor of the current CEO was selected, was sometimes puzzling, sometimes felt as a déjà-vu of the pre-Marchionne era.

Reading news, and having had few dozen years of experience on business number crunching in small and large multinational since mid-1980s, allows to connect the dots also without having access to any insider information: annual reports and reading news releases looking at the overall market and regulatory context is enough.

Something that, in a completely different domain (European institutions), generated some "fantasmes" while living in Brussels, when I first appeared there to settle over 20 years ago.

Eventually, they understood that experience and continuous learning and continuous updating directly and via network contacts enables low-cost signal intelligence- pre-empting often those insiders who cannot admit the reality as they have a vested interest into their own prior assertions.

As an Andersen partner told me in the late 1980s while I was working on the release of the general ledger for a major Italian bank as "resident": a management consultant is somebody who (often) gets paid by the customer to borrow the customer's watch and tell the customer what's the time.

Not because nobody can read a watch- but because telling what the watch say usually is filtered through layer upon layer of considerations about impacts, so they need an outsider to tell what nobody want to be held accountable for telling.

I would like to go directly to the point- again the former FIAT is getting into financial issues but, frankly, as discussed offline, it has been discussed repeatedly over the last few years:



I do not know what will happen- but, as for cashflow, will discuss the point in the last section, which is really on the line of what shared today online on Linkedin, reporting on yesterday's announce that the car sharing element has been sold to a German company.

Still, too many of the announces since early 2025 (even before the current CEO choice was announced) were a bit unusual.

Also some local encounters in Turin from French, Italian, and other nationalities resulted in commentary that sounded a bit as somebody walking in the dark in an unknown room, and trying to use memories of a known room as a reference.

Projection while making choices generates some issues- but that was already shown in that late 1990s to early 2000s feed-back that received from colleagues working in Turin (at the time, I was living in London and working mainly in Paris and German Switzerland).

Yes, on my you will find that between 1986 and 2024 had missions for companies belonging to the former FIAT group (mainly now under Exor).

Curiously, both the first project (for FIAT Auto 1986-1987) and the second (for Magneti Marelli 1988) gave me an appreciation not just on the automotive manufacturing and business per se, but also of the overall supply chain within automotive and its financial complexity (as the first was on procurement, a recommendation system on which invoices to pay, and the second was on management reporting at the group level, few dozen companies- I think around 60- covering what "composes" a vehicle, from chassis to lights- growth by acquisition).

My focus in this article is the usual: organizational culture, in this case specifically as represented by what is reported on media and public announces from the company.

Why now? Not just due to that article from Il Sole 24 Ore and what will happen this week, but also due to how this could evolve.

Not just for Turin, Italy, or even Stellants in Europe- but overall for the European automotive industry, as a collateral damage that, in part, already started to happen.

The table of contents:
_ A_Past
_ B_Choices
_ C_Cyclical patterns
_ Conclusions and next steps



A_Past

We associate the FIAT brand with cars, also after the company was merged with Chrysler into FCA, and then FCA was merged with PSA into Stellantis.

In reality, in over a century of history, the company grew into a conglomerate that produced cars, but also trucks, equipment for building sites, military planes, mopeds, and even, from mid-1980s, integrating a company that produced plastic components as well as landmines (eventually the production stopped).

Just looking at my experience in missions in different companies since 1986, what I saw from media was how often the overall group structure was re-arranged, including to integrate acquisitions.

Curiously, many in Turin consider the company static and monolithic, and "company town" is associated with nicknames for its employees and factory workers of when was at the peak size in Italy: yes, a ministry of automotive akin to how my British colleagues described a major bank as "the ministry of banking" due to its layers upon layers of convoluted procedures and paper-shuffling organizational structures.

The companies in which Exor still has a significant quota (or recently sold them), such as CNH, Iveco, Stellantis derive from that past- albeit over the years obviously some companies left the perimeter, and others were added.

In 2018 published an article in Italian with the title "Spezzatino"- to qualify what, after Marchionne, could generate conceptually a splitting by brands and units easier to sell.

For example, in 2021 was in a project at CNH, but ended up as Iveco, as in January 2022 there was the long-awaited spin-off.

As I kept remembering to others, when started the succession preparation for Marchionne at FCA (and all the other activities under Exor that he covered), the CEO of CNH, Richard Tobin, announced to media a plan to spin-off Iveco from CNH, and then positioned himself as a successor to Marchionne.

News media at the time reported that Marchionne reply was that Tobin was fine where he was- and, after that riposte, Tobin resigned.

My comment as soon as the 1+2 (concept of spinning off Iveco and positioning for the succession) was reported by media? That actually was mimicking the spin-off of Ferrari initiated by Marchionne to extract value thanks to the brand visibility, with a significant difference.

Ferrari had long been a company with a high value per-unit but a limited production run.

I remember a late 1980s joke from colleagues discussing the potential of selling a MRP (material resource planning) system to the company: considering that customers waited, and whatever was produced found customers even on a waiting list, could have used a spreadsheet to cover that.

Yes, there were synergies within the group- as often is remembered, F1 and high-value cars test the ground for innovations that eventually end up into consumer vehicles.

Still, was and is on a different plane of reality.

In my first mission upon my return in Italy, worked for CNH- and, after leaving it in August 2012, in 2013 was announced that CNH would merge with Fiat Industrial, its parent company- which, incidentally, was the company where FIAT had transferred most of the non-automotive activities.

And, frankly, I think that that separation and merging made sense.

So, if anything, for a long time, Iveco (where I had my first project as a fractional facilitator on the datawarehousing finance portfolio, initially for an Italian partner, then as a direct supplier, in the late 1990s) had been integrating into CNH- and, actually, this allowed to produce vehicles that had a cycle different from what was produced by other units (e.g. construction and agriculture).

Anyway, in large organizations sometimes decisions made for different reasons stay on once the associated bureaucracy is set in motion: have their own inertia.

So, when in 2022 another bit of the "spezzatino" went ahead, I was not surprised.



B_Choices

There has been a constant message that saw since the early 2000s, but saw asserted with more openness since late 2018: extract value.

I will not comment on the 2030 plan- that is for another day, as I prefer first to wait for the annual report- too many announces since summer 2025.

Paraphrasing what wrote in 2018-2020: if you cannot ensure governance of a group of companies with the resources available, better to sell each company to an industrial partner who could provide that governance, and retain a quota to benefit from the new governance and maybe develop some synergies, instead of just selling assets probably at a discount vs. their potential.

So, for example, I wrote back when was announced that selling Iveco (or selling Magneti Marelli) was not the best choice, considering that we have been shifting for some time from private vehicles to something that is increasingly looking as pay-per-use on-demand, i.e. optimizing allocation of vehicles, also for end users.

Something that would require vehicles that are more durable, can be easily upgraded to e.g. align with compliance, and are designed for such uses, i.e. generating more demand for lifecycle services (from spare parts to continuous software upgrades, as Tesla has shown, but already in 2012 in Milan was said from the consulting arm of Porsche).

Hence, when was announced the kick-starting of "circular economy" activities taking vehicles in and replacing, refitting, etc, I did not read it as locals in Turin read it.

It was not a new business sustainable long-term- just a transitory activity that could be automated once vehicles became being designed as airliners, aiming to a similar lifespan.

By allocating people who had experience in production of new vehicles, paving the way for something akin to what happened when Renault sold an automated truck production line to a Chinese company, and the Chinese company removed robots and set in people...

... to then create new robots tailored to the actual redesigned production processes.

In this case, allowing to see which "design thinking" elements could generate new platforms and design concepts to embed within product design to enhance e.g. ease of replacement (meaning: automation) and even new revenue streams (e.g. on board infotainment) and commercial partnerships with "niche" partners.

Selling Magneti Marelli to an industrial partner sounded something on that line- keeping into the game while bringing in external governance.

Eventually instead resulted into something else, assuming the name Marelli..

Net results?



After entering into Chapter 11 in 2025, on June 2026 was reported that both Stellantis and Nissan are in discussion to take over some of the assets.

Another choice was to expand into the publishing industry- so, after the traditional family newspaper La Stampa of Turin and associated business units, were added other local newspapers in Italy, and eventually also the publishing group that included La Repubblica (one of the main Italian newspapers), L'Espresso (a leading weekly), radios, etc.

Did not last long- eventually, the magazine L'Espresso was sold, and recently also La Stampa, La Repubblica, and all the other related assets in Italy.

So, again, instead of generating value, the "value extraction" approach resulted in something else- "spezzatino" that also unbundled what had taken decades to build.

The "spezzatino" that wrote about in 2018 has become the preferred default choice.

In 2024 and 2025, in Turin blended with French-, German-, English-speaking language groups.

Of course, in a former (?) company town "the company" often was part of the challenges from those attending: and it was curious how often discussions about businesses ended up sounding as head hunting recruitment done by those that, except a few, did not have a clue about the complexity of what is involved in large multinational companies and activities.

Way too often what I heard was the lone leader concept, superimposing, as I wrote within the introduction to this article, projection of the actual experience on the ground of those expressing the assessment onto reality that was and is on a different plane of reality.

Those who read my articles that published in Brussels, now offline, remember probably that blended physics and sociology when discussing about "planes of reality" and perception- in politics and business, and how mutual influence and relative "mass" could affect those interactions.

Choices using a perspective that ignores data resulted in curious comments in late 2024 and early 2025, claiming from the French side that the balance could shift to the Italian side by choosing an Italian: forgetting that business is not the world cup, where you follow your national team.

I shared in past articles about a continuous stream of "signals" from Exor/FIAT that were misread locally, e.g. seen as a sign that Turin and FIAT would become again the European Detroit- when were anything but, looked from an external observer who was not try to cocoon into the memory of past glories: observing a "sunset boulevard" is painful, notably when it is your birthplace.

Nobody bothered apparently to read through the experience of the new CEO: developed on the manufacturing side and with a significant part in Brazil plus outside Italy, and many expressed outrage and a sense of betrayal by the string of announces that confirmed how out of touch with reality had been the locals.

Now many smaller businesses, after waving the Italian and European flag often, including to get softening in compliance (compliance that had been badly designed to start with), plus as usual asking for taxpayers' underwriting their stay in business...

... are being enticed to go elsewhere- from Northern Africa, to the Balkans, to the USA.

Anyway, commented that cognitive dissonance often since 2025 by sharing news items on both Facebook and Linkedin, so no need to share again that commentary and associated data.

So, I had frankly no surprises since June 2025, albeit probably communication could have been managed better- and would have avoided many of the current doubts about those 2030 plans.



From the January 2026 interview in Detroit when the CEO stated that he was "having a blast" being the CEO: shifting from management of production in a plant relatively fast to managing a multinational can be exhilarating- but should have been shared as such only if the bottom line was expected to be on a similar positive trend.

Considering the news reported by media, did not seem the best way to express concern and strategic drive to reposition and improve the group.

Notably when it was delivered few weeks before announcing over 20bln net loss for 2025.



Impacting also on the Exor value despite previous announces about potential improvements.



Few weeks later, both WSJ and Il Sole 24 Ore reported the negative numbers, linking that to listed companies.

Moreover, reported that, instead of improving, the expectation was that also 2026 would "challenging": "The top management also indicated that 2026 will also be 'challenging', but with a clear focus on simplifying the portfolio and the possibility of a significant new investment, in terms of size and ambition, similar to the one in Philips, also thanks to the EUR2 billion proceeds from the sale of Iveco, Gedi, Lifenet and Duo, which have raised the liquidity available for investment to over EUR3.5 billion".

The latest announce? Yesterday- selling Free2Move to Mutares, but, reported an Italian newspaper, retaining the charge stations.

Which, actually, allows to introduce the next section



C_Cyclical patterns

The title of this article betrays my perception (and I am not the only one).

The FIAT group has been since I was a teenager in the mid-1970s alternating between a "financial" and an "industrial" phase quite often (with something akin to a business version of Goldberg variations making more dynamic/chaotic the shift between the two).

Usually, the former gets in when the latter loses track- as happened with the arrival of Marchionne, seen from the outside.

In this current phase, it is curious as, beside the initial announces of new models etc that seemed to herald yet another manufacturing-driven phase when structural weaknesses from two rounds of merger and few de-mergers were visible, frankly most of the implemented announces since June 2025 instead have been, despite the selection of a management with manufacturing background, financial.

From plans presented and routinely postponed, to investments around the world, divestment of assets, freezing of production due to different reasons (latest one is lack of parts, for Turin- more than once) while shuffling staff to outside the EU temporarily so that a unit could make its quote while others sit idle, or having plants converted into "rent space" for Chinese companies, etc.

I and others criticized the beginning of the tenure of the new CEO in June 2025 as still sounded a bit too much as a plant manager (e.g. the curious news items about visits in plants bringing croissants- a team leader trying to cheer up), and communication often followed that pattern.

From Stellantis, gradually saw that many of the operational announces were de facto shelved- and turned into what I was not the only one to say would have been more sensible choices: if there is no or reduced demand, why should you produce more units? To then pretend that are sold by "upfront loading" on the dealer network? That would be so 1980s.

Look at the most recent choices: are not really on the industrial side, but on the financial side: cutting and controlling costs, maximizing the use of local potential resources that either have been already paid for or could become de facto subsidies (e.g. the Italian "cassa integrazione", potential "cassa integrazione straordinaria" to keep plants open, and various forms of support for the transition).

If what the Italian newspaper stated about yesterday's agreement is correct, keeping the charging stations is good for the cashflow, and potentially also other initiatives in that direction could generate a positive feed-back.

Reason? Cashflow derived from extraordinary or non-recurring items is cashflow- but does not say anything about sustainability.

Having already invested in plants, infrastructure, etc- if the issue is cashflow to avoid going "junk", converting assets into revenue streams generating cashflow long-term (e.g. further production agreement with Chinese companies) makes sense.

Beside Leapmotor e.g. in Spain, recently media reported that another agreement was reached with a different Chinese company to use a French plant.

Today's announce of selecting a Chinese to lead activities could actually pave the way for more agreements in that line- and even, eventually, an outright transfer of operations not in USA and Brazil (or LATAM) to Chinese companies- as both USA and Brazil have been recently declared strategic.

So, this time, maybe Stellantis will avoid that "boom to bust" cycle that keeps recurring- also if maybe it will mean shifting assets outside the perimeter, and shrinking down.

But, anyway, as shared in previous articles and above, the automotive industry is shifting to a different model.



Conclusions and next steps

Recently Tata postponed its next step into the Iveco acquisition and integration.

Considering the conditions of Stellantis, actually this could be useful to allow maybe to remove something that left me puzzling when read the terms of the "perimeter" of each company on media.

Or: Stellantis still has commercial vehicles from the assorted brands it inherited by acquisition- something that, considering the future of mobility, probably would make more sense to see within Iveco.

Iveco itself, due to security concerns, as expected sold to Leonardo and Rheinmetall in order to be able to sell to a non-European company Iveco.

It will be interesting, notably if Stellantis (or Exor) takes again bits of the former Marelli, to see how the relationship between the different companies will evolve, as still components are shared.

Tata has its own production of commercial vehicles, not just trucks, but already has experience in integrating European companies and brands, and, anyway, has been a business partner of former FIAT companies for a long time.

I hinted within the introduction to the potential impacts not just for Turin, or Italy, but overall Europe.

Personally, I consider often representatives of the Italian automotive industry dinosaurs who, as somebody hinted in late September 2025 at the car expo in Turin, dream of going back to the 1970s and its mass sales of cars.

Still, I agree with those who said that, as usual since 2019 (but in part also before- as wrote already 20 years ago), within the European Union gradually we developed a self-referential attitude to compliance, compounded over the last few years with a continuous "tinkering under pressure" that makes cumbersome to be compliant- notably within automotive.

The "planned obsolescence" coupled with the cost of vehicles reduced instead of increasing the number of vehicles, and reduced the appeal of what used to be for decades the entry point into vehicle ownership: used cars.

Maybe some retrofitting could be feasible if regulations were focused on results, not on technologies, i.e. emissions, not how those emissions are produced.

Notably considering that, as in computer chips and AI models, we Europeans did not develop our own internal supply chain as it was cheaper to either buy or license.

Generating sustainable cashflow might imply for Stellantis producing less vehicles within the European Union and increasing the services and aftersales, including the "circular economy" not just for Stellantis vehicles.

There are at least a couple of elements of the trends set since 2025 by Stellantis that risk converting it into a de facto "Trojan horse" to upset the European Union automotive cart:
1. weakening the compliance rules so far enabled to consider also vehicles produced in countries outside the European Union and with different (weaker) regulatory frameworks see the European Union as a potential market
2. leasing plants in Europe to Chinese companies would spare them the needed investments, generate cashflow for Stellantis, keep at least in part local politicians happy as short- and medium-term will retain at least a fraction of the jobs that used to be within the automotive industry, but would further make economically unsustainable developing local technologies and local industries
3. partnerships with non-European companies whose main production is outside Europe could turn into maquilladora the remaining European plants, i.e. assembling what is produced outside with lower energy costs (China is investing massively into non-fossil fuel production and "compute")
4. looking at our history post-WWII, the Marshall Plan was an accelerator- but an accelerator also to become a licensee instead of developing technology- and we are doing the same with e.g. batteries.

Therefore, will be interesting how the whole context will evolve, and the potential domino-effect of the impacts, also if escapes the "junk" status, of an acceleration of the approach deployed so far.

Stay tuned!