Dow Jones Newswires (Milan) - Fiat SpA's (F.MI) chief executive Sergio Marchionne Tuesday urged legislators to make Italy more business friendly or risk having the country's largest car maker move its headquarters abroad.
Speaking before a parliamentary committee, Marchionne reiterated Fiat's commitment to invest EUR20 billion in Italy in coming years, but he made it seem as if it was against his better judgement.
"If we consider the alternatives that our company has and the industrial policies adopted by many other countries that compete with Italy, the fact that Fiat has decided to commit itself (to the country) is an anomaly," he said.
The outspoken Fiat CEO has repeatedly complained about Italy being uncompetitive and reluctant to address the challenges of globalization.
Marchionne faced stiff opposition from labor unions last year when he demanded more flexible working conditions in exchange for investments to modernize Fiat's aging plants and double local production.
Marchionne caused another stir early this month when he said he could see Fiat move its headquarters to the U.S. after it took control of its Detroit-based partner Chrysler Group LLC.
The comment prompted Prime Minister Silvio Berlusconi to call a meeting with Marchionne on Saturday.
Fiat controls a 25% stake in Chrysler and could become majority shareholder as soon as it meets a series of conditions detailed in the U.S. car maker's restructuring plan, wich was drafted by the U.S. government as part of Chrysler's bailout package in 2009.
Fiat is looking to merge its operations with Chrysler to benefit from economies of scale and better compete with larger rivals.
As Marchionne works to forge a new global car giant, labor unions have voiced doubts about his real intentions in Italy and fear job losses at a time when the country's economy remains weak.
Wearing a suit, a tie and a shirt with cufflinks, rather than his customary dark sweater and open-collared shirt, Marchionne told the committee that Italy discouraged private investment through high taxes, bureaucracy and inflexible labor laws.
"Our businesses cannot and must not be obliged to abandon the country because they lack the conditions to produce competitively," he said.
Marchionne raised the specter of moving production out of Italy last year when he sought to convince workers to accept his demands for new working conditions. Workers accepted his demands eventually.
Marchionne said Tuesday that Fiat's headquarters must have direct access to financial markets and favorable conditions for the manufacturing base need to be ensured.
"If we create the conditions that are at the base of our plan (to invest EUR20 billion)...our country will be in a position to keep the legal seat," he said.
He highlighted potential issues related to a double stock market listing once Fiat had organized Chrysler's initial public offering later this year.
"When we will have two legal entities that coexist and are listed on two different markets, there will obviously be a problem of governance," he said. Fiat is listed in Milan, while Chrysler's listing is widely expected to be in the U.S.
Irrespective of the location of its main headquarters, Fiat would likely have a series of operational centers based wherever it produces and sells cars, Marchionne said.
"If Fiat's heart is...in Italy, our head must be in more than one place," he said, explaining how the company's European operations could be run from Turin and the American business from Detroit. Additional centres could be established in Brazil for Latin America and in Asia, he added.
After Marchionne's presentation, some politicians said they were not convinced and demanded more details about his investment plan in Italy.
"A transparent industrial plan does not exist," the leader of the centre-left Italy of Values party, Antonio Di Pietro, said in a statement.
