Fiat Suppliers Expand Abroad to Survive image

The European crisis and Fiat’s struggle on the continent has forced the automaker’s suppliers to focus on other markets to be able to survive.

For more than 30 years, Salvatore Giordano has been supplying plastic parts to the Italian automaker from his small plant in the Asti region. But Fiat’s struggle in Europe and its decision to retrench in the country also forced Salvatore to lay off 18 of his 68 workers, and begin to focus on other sources of revenue such as making furniture and reduce its dependence on the automaker.

“We understood that if we want to get through this grave crisis, we have to go abroad,” said his son Gianluca, who was a university classmate of Fiat Chairman John Elkann. “After a trip to VW’s headquarters in Wolfsburg in July, we are now in talks to become a supplier.”

More than 75 parts makers had to close their doors last year, others have chosen to sacrifice their corporate loyalties in order to survive. As Fiat’s sales have fallen by a third since 2009 and its plan to invest 20 billion euro in its plants was delayed, the component manufacturers have begun to expand abroad.