Back in the 1950s, while Americans were cruising the highways in massive V8 Chevrolets, Italians were bouncing around their narrow cobbled streets in tiny Fiat 500s. That 500 stands for cubic centimetres, equivalent to 30.5 cubic inches or a large American lawnmower.
In the decades since then, the United States has put men on the moon and created world-changing innovations such as the 747 jumbo jet, personal computers, the Internet and Google. Italy has given us the pleasures of pasta, pesto and pizza, coffee culture (via Seattle) and balsamic vinegar, but no great inventions or great corporations. Italy’s small and family businesses have thrived, largely under the radar, but its big corporations including Fiat have lurched from crisis to crisis.
By 2000, Fiat was keen to get out of the car business and did a deal to sell to General Motors. In 2005, GM paid $2 billion to get out of the deal to avoid taking on what The New York Times called Fiat’s ailing auto business. And now here we are barely four years later with GM in dire straits while Fiat is thriving, partly thanks to booming sales of its updated classic Fiat 500. In fact Fiat boss Sergio Marchione has bought a 20 percent stake in Chrysler and is now looking to take over big parts of GM’s European operations.
Reversal of fortune or what?
Of course Fiat’s bid to grab GM Europe and create a pan-European, transatlantic car group may not go through. And with the Chrysler deal too, Fiat may end up with a severe case of indigestion. As the Financial Times put it, “Sergio Marchione is either a visionary or seriously deluded.”
For Americans, the prospect may well be startling. Fiat’s signature cars are mostly sub-sub-compacts by American standards—they look as if they would easily fit on the back of a pickup and maybe even in the back of an SUV. They’re the sorts of cars that many Americans find it hard to take seriously, but they may start having to do just that. The design concept that Fiat executed so memorably in the 1950s still works today, albeit in an updated, more sophisticated form. How many American car companies could revive one of their designs from decades ago and have it work in today’s cash-strapped market, with the prospect of peak oil hanging over us all?
