Fiat has seen much success recently. With the launch of the Fiat 500 reboot in 2012 many who were unfamiliar with the automotive brand have now fallen in love with the car line. Now Fiat has moved to expand its reach in the industry. By teaming with Chrysler, Fiat will be manufacturing Jeeps in China and in essence moving potential American jobs to China.
Fiat C.E.O. Sergio Marchionne brokered the merger deal to retain full control of Chrysler in January of 2014. This move was quickly followed by the revel of the new logo for what will now be known as Fiat Chrysler Automobiles or FCA. Marchionne says the roll out and integration of the new logo will be gradual. Other recent announcements have been the new FCA headquarters in London and planned use of the Guangzhou Automotive Group plant in China to build new Jeeps. These steps were taken with an eye on expanding the Jeep brand in China’s booming SUV market.
Although this may be good news for the auto industry at large it doesn’t appear to be a positive sign with regard to US jobs. The US unemployment rate remained unchanged in March at 6.7 percent with optimism the outlook with regard to the remainder of the year. What many have noted as a challenge is the lack of trained personnel to fill many new jobs. A report from Career Vision shows the top 10 areas where the US is experiencing a talent shortage. The report indicates the skilled trades, engineers, technicians and mechanics among the talent shortage jobs listed. This news may partially explain why we are losing some automotive industry jobs. If American workers are not properly trained yet more expensive to employ, that may be a hit to the bottom line that car builders wish to avoid. It’s likely that this perception effected Fiat Chrysler’s decision to open shop in China.
The news from Fiat Chrysler, FCA is a welcome sign to China’s job market which is still recovering from the effects of the 2011 earthquake in Tōhoku which caused major infrastructure damage in addition to the catastrophic loss of life suffered. Conversely, the 2008 US Mortgage meltdown and banking crisis are still being felt in 2014 as well. Where big firms and organizations suffered the most during the initial hit, the trickle down effect has taken some time to reach certain sectors of the country. Although we’ve seen a decline from the nearly ten percent unemployment rates experienced early on, the effect of the delayed impact is still reflected in the unemployment numbers.
Rock solid answers to the challenges of the American job market may be hard to come by. Some lawmakers see innovation as the path to new jobs. Meanwhile, others view innovations in manufacturing as means to create new jobs and establish new Eco and green industry corporations, which may increase exports and boost our economy.
News regarding FCA is focused solely on the projected investment of 4.7 billion Yuan ($755.8 million), which is a third effort at tapping into China’s auto market but, what of the human costs. If the Fiat Chrysler move and creation of jobs in China is perceived as an industry chess move, US automakers are encouraged to devise an effective strategy to remain a viable player within and outside of its borders.
By T. Lawson