Fiat CEO and the auto industry’s wise old grandpa, Sergio Marchionne, warned the industry that “the day of reckoning is inevitably coming,” when Chinese automakers begin exporting on a massive scale.
Marchionne is usually regarded as being “usually four steps ahead of everybody else,” according to Chrysler executives. It’s no surprise then that his warning, given during the annual conference of the Center for Automotive Research, sounds dramatic. “We cannot afford to be unprepared for the ascent of China, reassuring ourselves of our invincibility,” said Marchionne. “Rather, we need to work to make our industrial base more competitive.”
Even if China exports a mere 10% of what they build, “the risk we face in our home markets is enormous.” No doubt Marchionne has already seen this in Brazil, where Chinese imports are eroding the sales of normally-popular Fiats.
And behind his words is another warning, this time aimed at Detroit: just because the Big Three are profitable again, doesn’t mean that wages and benefits should increase again—long-term competitiveness against foreign threats like China, South Korea, or even South America is key. America may be years from its own Chinese invasion, but if Marchionne has any say, Detroit won’t get caught off-guard. Wolverines!
[Source: Detroit Free Press]