Fiat Announces Cutbacks and Reorganisation; Advertising not Immune

13 December 2001

Italian auto giant Fiat announced Wednesday a major reorganisation of its loss-making flagship automobile division, its executives warning that adspend may be slashed as part of a cost-cutting drive.

The car arm – which has suffered declining market share and posted Q3 operating losses of $108 million – will be divided into four autonomous units: Fiat/Lancia, Alfa Romeo, International Development and Services. As part of the shake-up, division ceo Roberto Testore is to step down, joining several thousand Fiat staff who will have to seek alternative employment.

A statement issued by Fiat chairman Paolo Fresco did not directly mention ad arrangements, but a company spokesman warned ominously that all areas of the business were prone to cutbacks. “This is a significant reorganisation, and it will have a potentially large impact on every area,” he said, “… including advertising.”

No mention was made, however, of possible account reviews or consolidations. Any change in Fiat’s ad lineup would be big news for the Italian ad industry, where the car giant is one of the biggest players with the largest ad budget of any auto firm.

Currently managing the main Fiat brand are D’Arcy and Leo Burnett, while Armando Testa handles Lancia and Red Cell is responsible for Alfa Romeo.

News source: AdAge Global