AUTO BAILOUT BOMBSHELL: Fiat Says Chrysler, Jeep Production May Move to Italy

Coming hot on the heels of speculation that some Jeep production may be moved to China comes a bombshell from a Bloomberg report. Fiat is now considering moving Chrysler and Jeep production to Italy.

According to the piece, "To counter the severe slump in European sales, (Fiat CEO Sergio) Marchionne is considering building Chrysler models in Italy, including Jeeps, for export to North America. The Italian government is evaluating tax rebates on export goods to help Fiat. Marchionne may announce details of his plan as soon as Oct. 30, the people said."

So, let's be real clear here, we are talking about vehicles that will be built in Italy and exported to America. The evidence is clear that Fiat is looking at ways to move production of vehicles from the US to elsewhere, whether it be China or Italy, costing American jobs. This is becoming indisputable, despite outcries from certain parties to the contrary.

Mitt Romney has rightfully criticized the Obama Administration for handing over Chrysler to the Italians and now leaving the fate of American workers in the hands of Fiat management. Fiat is not a healthy company and the auto industry is in as great a risk as ever. The insistence that all is well by those with political motivations does not mask the danger. More jobs are at risk of being lost and more taxpayer money may be lost as well.

Let's face it, the auto bailouts were not well thought out. Perhaps General Motors' CEO, Dan Akerson, said it best when he said, "The good thing about our bankruptcy is that it took only 39 days. The bad news is that bankruptcy took only 39 days. If we had been there longer, people would have asked these questions and looked at these things."

The whole auto industry bailout process was rushed through with the wrong primary motivation of protecting the politically powerful UAW's interests. The Obama Administration never considered that giving Chrysler to Fiat was not a great idea and could eventually hurt the same UAW workers it was trying to protect. Manufacturers like Chrysler and GM are at a competitive disadvantage due to UAW obligations that were not properly addressed in the bankruptcy process. The industry is more competitive than ever and the government does not seem to be the best innovators to lead the sector to real health. This truth is very likely to become more apparent when the political season ends.

Mark Modica is an NLPC Associate Fellow.