Romancing the Alfa Romeo
It hasn't been available here since 1995, but parent Fiat is said to be looking to Ontario as it readies a North American relaunch
ERIC REGULY AND GREG KEENAN
From Wednesday's Globe and Mail
April 23, 2008 at 2:30 AM EDT
ROME AND TORONTO — Alfa Romeo, the Italian sports car best known as Dustin Hoffman's runabout in The Graduate, is returning to North America, and Ontario is making a strong pitch to persuade the company to assemble cars in the province.
Sources said the Ontario government has held a series of meetings in recent weeks with officials from Fiat Group, the Italian auto giant that owns Alfa Romeo, Ferrari, Maserati and other brands. “Ontario is aggressively selling itself,” said a source familiar with the talks.
Fiat spokesman Gualberto Ranieri would not confirm or deny the meetings. He would only say that Sergio Marchionne, Fiat's Italian-Canadian chief executive officer, “envisages making at least one Alfa Romeo model in North America” before 2012 and that sites across North America are being considered.
The province is looking to offshore auto makers for new investment and jobs amid plant closings and job cuts by the Detroit Three auto makers that have battered the Ontario economy.
In addition to Fiat, the province has made a strong push to entice Volkswagen AG, which is embarking on a North American expansion, but appears to have chosen the southeastern United States for a new assembly plant.
Any successes in landing new investment would build on the Ontario Automotive Investment Strategy, a $500-million fund that has helped land a new Toyota Motor Corp. factory scheduled to open later this year in Woodstock, Ont. It will join an existing Toyota operation that is the only plant outside Japan to build vehicles for the auto maker's luxury Lexus line.
Honda Motor Co. Ltd. is constructing an engine plant in Alliston, Ont.
Mr. Marchionne has talked openly since December about building Alfa Romeos in North America, where they have not been sold since 1995.
He could not be reached for comment about the Ontario meetings.
He would know the Ontario market well. He was born in Italy, but was raised and educated in Ontario, where he obtained a law degree from Osgoode Hall Law School. His mother still lives in Toronto and he travels to the city about every six weeks to visit her.
The first decade of Mr. Marchionne's career was spent in Canada in senior tax and finance roles at Deloitte & Touche and Toronto packaging company Lawson Mardon Group. He became Fiat's CEO in 2004, when the company was almost bankrupt, and turned it around – to the point where it now is one of Europe's fastest-growing and most profitable auto groups.
Fiat wants a North American Alfa Romeo factory, partly as a hedge against a rising euro that is eating into profit margins for all the Europe-based auto makers that export to the U.S. market. Volkswagen's only North American plant is in Mexico, and the German company also wants to take advantage of the decline in the greenback that has helped turn the U.S. into a low-cost vehicle assembly location.
Mr. Ranieri said Fiat would most likely form a joint venture in North America or construct an Alfa Romeo assembly line at one if its existing Case New Holland factories, which build tractors and other agricultural equipment.
If the CNH option is chosen, Ontario would be out of luck. CNH has 12 plants in the U.S. and one in Canada – in Saskatchewan.
The logical partner in North America is Chrysler LLC, which is seeking alliances to develop its own international growth strategy. Although it has excess production capacity in North America, almost all of it is in the United States.
Fiat uses joint ventures for much of its overseas assembly, including links with India's Tata Group and Chery Automobile in China.
Ontario's pitch to Fiat centres on the depth of its automotive expertise – the province builds more cars than Michigan – and potentially lavish financial incentives.
Two funds would be offered to lure Alfa Romeo.
The automotive investment strategy was set up in 2004, but has been almost entirely paid out to support investments by Chrysler, Ford and GM. Ontario also offers the $1.15-billion Next Generation Jobs Fund, whose goal is to create jobs in manufacturing, health care, pharmaceuticals and environmental technology.
