Busy week in Rome this week. Many celebrities in town. All the bosses from the big corporates were in town for the industrialists’ meeting, and for the seismic waves emanated from it, conferences and the like.

So today at 5pm Mr Marchionne appeared magically (from Detroit? from Berlin? from some Ministero?) in steamy hot hot-house Rome, wearing his Linus-style blue jumper in an appropriately sub-zero air conditioned conference room. He sipped an espresso in religious silence at the speakers’ table in front of a couple of hundreds of eyes. I thought the moment was very Louis XIV.

Bits and pieces. He explained platforms and said that an Opel today has a 80% Fiat Punto skeleton. So the operation should make a lot of sense to the German government, if you know that I mean. (But we’ll see how that turns up over the weekend).

He also said that in the car industry top management either comes from the back  – the kitchen, ie the factory -  of from the glitzy front, the Geneva Car Show. But the car industry cannot look pretty and sassy in the front if it does not clean up its ugly kitchen. (For sure there were some greasy c(r)ooks at the helm, in those kitchens…)

He said that the car industry has been destroying value for too many decades. (That  makes a lot of sense. If the car industry were the IT one, we would still be running Lotus 123 and playing Pac Man, with advertising on TV boasting “green figures on a black background: cool!”).

He explained the negative Net Working Capital mechanism. You get paid for the sale of the car before you pay the metal that goes in it. Sort of magic. That magic stops  when you stop producing.

He said that the car industry did all sorts of monkey corporate behavior. Buy financial services. Sell them. Buy components manufacturers. Sell them. They tried all the tricks. Now it’s over. (Good auto-critique…or car-critique).

What else…he said that Fiat didn’t ask for State money, while the Volvos of this world did. (Well, hold on a minute. Maybe not under his management – and still we should get supporting evidence and check the data but it’s friday night. But what about the past century? The compounded amount of State aid received by Fiat and the freeze to good regional and metropolitan railway infrastructure in Italy for the past century I guess is a quite hefty bill for Italy. So I won’t buy it).

He said that the car industry beyond this point will never be the same. (That’s fair. I think this applies to quite a bit of industries…so it’s not a surprise. But the ode to critical mass is something we heard also for banks a while ago…? so are we left with too little of them or too many? What’s the difference between Too big to fail and too small to fail? But let’s not get too technical…after all, it’s friday night).

He showed the impact of the car incentives on car sales since January 09 in Italy, France and the exceptional kick enjoyed in Germany, where the 2,500 Eur windfall bonus could lower the tag price of a car, no matter if it was Benz or a Panda. (Not to be extrapolated).

When asked by a half-German half-French peer what sort of cultural integration this flurry of deals would call for, the half-Austrian half-Italian half-Canadian speaker said that the boss of the technical side in Fiat is already a German, that they have lots of Americans already so that kind of process had started quite a while ago. (That’s good. Parochial management styles, we don’t like those. We like people speaking many languages and being able to relate to different cultures).

Still we don’t like people bullying others around. The Franco-German CFO kept on answering “French and German! Definitely both!” when Marchionne asked him what nationality he was at the end. But M. kept teasing him, concluding, autoritavely – or so he thought – that since the father was German, then the CFO had to be German. (Here at BerlinRomExpress we’re happy mongrels from the border and don’t like such arm-twisting).

Anecdotes. He said that he met a US Treasury guy who was chain-smoking like him outside of a building in Washington. This guy used to be a big cat on Wall Street and so he asked him what motivated him to work for the government now. The now slimmer cat said that he wanted to be able to write on his grave “I did A difference”. Now that sounds a bit rhetoric but maybe Marchionne picked it as a quintessential element of the american attitude in starting over again and feeling part of a collective effort.

Marchionne used the example in order to express his convinction or frustration that Europe (especially the EU) is behaving in a destructive way and not towards a collective effort, unlike the US. “Since the Treaty of Rome, any sort of agreement has been always difficult to reach, the French get up and leave” and this centrifugal force will do no good for the state of the economy. (I would add that the Yugoslavian wars are also a good example of dysfunctional Europe. But there were many good examples too. Talking about “collective effort”, shall we start from Italy first, the country deprived of any civil religion and the kingdom of free-riding?)

Another anecdote. When he met recently with a manager from one of the US companies, the guy introduced himself as the Senior Vice President of Whatsoever. He told him to cut the bullshit short. “If you introduce yourself always in this way, this forces me to specify to you each time that I am the CEO”. (There! Bureaucracy exists also in the US, not only in old Europe…must be a typical feature of “value-destructive” organizations).

Branding. He said that VW did wonders, in camouflaging an Audi A3 like an Audi when the platform it uses is VW’s. He said chapeau to the pricing power. (I am unsure on the exact % of envy, sarcasm and irony in his voice. The man thinks fast but mumbles even faster).

He showed a Financial Times Lex article of 2007 “Choosing a car-maker is like picking the least flea ridden dog”. (In terms of presentation effectiveness, he scored a high point here. Auto-critique).

“I’m done”, he said at the end, and closed in a very Louis XIV way, by saying (briskly to say the least) that he wanted to smoke a cigarette. “Anybody wants to buy a car?”.

Er…no thanks. When it comes to Freude am fahren, BerlinRomExpress prefers 2 wheels from BMW rather than 4 by anyone else…and for the rest, we’re fans of Siemens, Alsthom, Ansaldo and anything white and fast which runs on rails…

PS
at 6pm this article appeared on the online edition of the Financial Times. The plot thickens!

Beijing Auto signals interest in Opel stake

By John Reed in London and Patti Waldmeir in Shanghai

Published: May 22 2009 11:42 | Last updated: May 22 2009 18:14

China’s Beijing Automotive Industry Corp (BAIC) has expressed an interest in buying a stake in Opel together with the rest of General Motors’ European operations, for which three other companies have already entered bids this week.