Auto lobby group ANFIA says up to 70,000 jobs could be lost in Italy due to the push toward green transport.
Around 230 workers in Italy’s “Motor Valley” have begun striking over the planned closure of their auto parts factory, an early casualty of the European Union’s transition towards electric vehicles.
Marelli, owned by U.S. fund KKR, wants to shut the plant in the Emilia Romagna region, which makes internal combustion-engine parts for automakers including Stellantis, Volkswagen Group and BMW.
The supplier said the business has become “unsustainable,” amid the EU’s ban on the sale of new combustion-engine cars from 2035.
Politicians from across the spectrum have visited the garrison of workers permanently stationed outside the Crevalcore plant, less than 40 kilometers from Ferrari’s headquarters.
Until last week the strikers had stopped any finished products from leaving the factory before a limited outflow of parts restarted in recent days.
The dispute is an example of the conflicting challenges governments will face as industries and economies shift toward greener energy to meet tough climate goals and bolster energy security.
Up to 70,000 jobs could be lost in Italy alone due to the push towards green transport, auto lobby ANFIA said.
Marelli has put the plan on hold but confirmed it wants to abandon the plant, leaving workers in a limbo. Around 20 couples risk losing their entire family income.
“Our lives would cease to exist,” said Grazia Vitiello, a 57-year-old whose husband also works at Marelli.
Samira Chouri, 50, has worked at the Crevalcore plant for 18 years.
“We have made sacrifices over years and, as a family, we eventually felt safe. But we realized it was not true,” she told Reuters while preparing for dinner at home with her two girls and her husband, who works in the same plant.
Their stories illustrate how the EV transition is already affecting people’s livelihoods, well before buying EVs — still more expensive than combustion models — becomes a realistic option for most consumers around the world.
“Building a house from the roof”
Marelli was created in 2019 after Fiat Chrysler Automobiles, now part of Stellantis, sold its component unit Magneti Marelli to Japan’s Calsonic Kansei, owned by KKR, for 5.8 billion euros ($6.1 billion).
When formed, Marelli had 43,000 employees with 10,000 in Italy. The Italian workforce has now fallen to 7,300, versus an increase to 50,000 worldwide.
Marelli has announced 167 workers at its Argentan facility in France, which makes parts for combustion engines, will also be affected.
“I am not upset with EV transition,” said Sergio Manni, a maintenance worker at Crevalcore. “It’s the way Marelli is dealing with it: firing and closing, zero ideas.”
Many workers at Crevalcore are in their 50s: too young for retirement, too old to easily find a new job, like Francesco Simeri, who is facing his second company crisis in a decade.
“It’s like watching the same horror movie again,” he said.
As the 2024 EU elections approach, the turmoil in Crevalcore, and other similar cases around Europe, might push politicians into thinking people’s welfare and a commitment to climate policies are contradictory goals.
Chouri’s husband Giovanni Sanfelice said he welcomed green transport, but the EU was not managing the transition well.
“You need to offer workers a solution, otherwise you sentence us to death,” he said. “The EU is building a house starting from the roof.”
Italy, EU’s third biggest economy, has Stellantis as its sole major automaker, but its parts industry is the second largest in Europe, according to ANFIA, supplying several automakers abroad.
However, 40 percent of its companies specialize in combustion technology and over 70 percent are exposed to it, ANFIA says.
Reliance on that technology and the small size of its companies — two thirds of them employ less than 50 people — could make Italy one of Europe’s hardest-hit countries in the transition to electrification.
“Small size means little money to invest to convert production,” said Francesco Zirpoli, a management professor at Venice University and scientific director of its Center for Automotive and Mobility Innovation (CAMI).
Everyone but the government
Zirpoli said Italian suppliers had the skills to embrace more EV-oriented production but the main threat came from the country’s shrinking car industry.
Auto output in Italy has fallen from over two million units in the 1990s to below one million now.
“This makes businesses very cautious about investing in Italy,” he said. “Marelli is the perfect example of this.”
Governments are not without means as they navigate the green transition.
About 37 percent of the EU’s 800 billion euros ($845 billion) post-pandemic recovery fund is earmarked for climate friendly investment.
Italy is due to get around 200 billion euros in grants and cheap loans through 2026, making it the single-largest beneficiary in absolute terms.
In 2022 Rome set aside 8.7 billion euros to support local automotive industry, but no major measures have been deployed so far besides incentives to encourage purchases.
During its first year of power, Italian Prime Minister Giorgia Meloni’s right-wing government has lobbied to water-down European vehicle emission rules and is pushing back on an array of initiatives aimed at fighting climate change.
It argues Italian businesses cannot afford previously agreed transition goals.
Climate change think tank ECCO said Italy needed to spend between 7-13 billion euros more per year to meet Europe’s decarbonization goals.
But Italy’s reluctance to embrace the green economy has already slowed penetration of full-electric vehicles into the country, potentially exacerbating the transition challenge.
EVs accounted for 3.9 percent of Italy’s new-car registration in the first nine months of 2023, compared with 15 percent in Europe as a whole.
“Workers dream of owning an EV car… the only one who does not is the government,” said Vittorio Sarti of the UILM, one of the unions on strike in Crevalcore.
