Fiat’s New Deal

Fiat Industrial, a division of Fiat specializing in trucks and construction/agricultural equipment has announced a change in management structure to help the transition of acquiring a new subsidiary, CNH Global (agricultural equipment maker).

The new structure will emphasize brands and brand awareness, in addition to region by region operations. The adoption strategy will be similar to when Fiat acquired the American car company Chrysler in 2011.

While negotiations of the acquisition are still in progress, Fiat Chairman Sergio Marchionne is confident they will succeed, however expensive it may be. While this may briefly take a toll on the company’s overall revenue and income, its assets will increase with the purchase of a new division. Since CNH Global is a company with nearly $20 Billion in revenue yearly and business in over 150 countries, the deal should turn out to benefit Fiat in the end.



In addition to acquiring CNH Global to bolster Fiat Industrial, Marchionne has announced that Alfredo Altavilla will take over operations in an attempt to turn around Chrysler Group LLC, the failing American car company that is 58.5% owned by Fiat. in addition to American sales, Fiat announced it will be focusing on returning Chrysler’s market presence in Europe, the Middle East and Africa as well.

In the next two years, due to the aforementioned acquisitions and the attempted turnaround of Chrysler, Fiat expects to lose money. As a result they are turning to innovation to differentiate themselves. They plan to introduce 19 new models in the next four years including a Jeep compact car. Also, they are making efficiency a priority in their Italian factories they feel are under performing. By renovating and innovating they are attempting to stop the tide of losing money Chrysler faced due to the American economic crisis of recent years. Making a Jeep compact and over half a dozen new Alfa Romeos and Maseratis is going to push Fiat’s products into new market segments that will bring them more customers and greater revenue. Maximizing efficiency of existing processes, in addition to reducing costs and raising output, may have the added benefit of improved products, which could help them to retain customers better.

Additionally, visionary leader Marchionne has approached leaders of American car company General Motors and French car company Peugeot with an idea of combining forces to take over Volkswagen’s dominance of the European automobile market.  However, it is unclear if such a deal would ever take place, especially considering that both GM and Peugeot have taken bailout money from their respective governments in recent years, weakening their financial position.






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Increased Pressure on Foxconn Workers Creates Defects in Apple Inc. Products


After increased pressure from management and quality control inspectors, workers at a Foxconn factory in China have reportedly gone on strike. With exceedingly high production demands due to Apple’s new product, the iPhone 5, combined with increased quality standards for finished products, the manufacturing workers are under enormous pressure.

Quality control inspectors have placed more rigid quality control standards on their workers due to pressure from Apple to have phones that leave the factory completely defect tree. This has created a great deal of stress, and with a range of error as small as  .02 millimeters it is easy to see why some workers are having a tough time. However, a few have responded to the stress by threatening or acting out with physical violence towards the inspectors. Despite what seems like a major problem, factory management ignored it for as long as they could, up until production had to be halted. Many of the quality control inspectors and some other workers, an estimated total of 3,000-4,000, have gone on strike largely due to these incidents.

With reports of multiple incidents of physical violence between front-line workers and quality control inspectors and rumors of a large scale strike, Apple appears to still be having trouble meeting demand for its latest product. On top of the working conditions manufacturers say are leading to frequent scratching and defects, it has been reported that many workers and not being allowed to leave work for holiday. Foxconn, a Taiwanese company and one of the world’s largest producers of electronics has denied most of these reports, saying that production was not halted due to incident and that no such strike has occurred. Additionally, they stated that the workers working over their holiday were paid triple their normal wage as mandated by the government.

Foxconn, a company who recently came under fire for poor working conditions and a 2,000 person brawl this September, appears to be having more problems relating to worker treatment and morale. Multiple production interruptions and even the mysterious death of a 22 year old in their employee housing have plagued the company since they have been struggling to meet the demands of one of the most highly anticipated products of the year.

Additionally, the workers have virtually no way of helping themselves to improve their conditions and control the immensity of demand placed upon them since they are forbidden from unionizing by law. Even without a union, a strike of such a large scale should get the attention of the parent company. Corporate statements denying the existence of a strike aside, 3,000 unhappy workers is a sure sign of both systemic flaws, and problems in the future.