Alfa Romeo moves south

Naples to become the HQ

For the past decade Alfa Romeo's Sud plant on the outskirts of Naples has been an embarrassment to the company, bedevilled by strikes, absenteeism and even violence. Today the mood has changed completely, to the extent that Alfa Romeo's finance and sales divisions have moved south as a prelude to the centre of operations being at the Pomigliano d'Arco plant instead of Milan.

The state-owned company had a change of heart about Naples four years ago and set about curing the problems at the plant which lies in the shadow of the extinct Vesuvius volcano. In return for complete modernisation of the factory the unions agreed that 1,500 workers should be permanently laid-off, so that instead of having 15,000 people producing 500 Alfasuds per day they now have 13,500 producing 700 cars per day.

Perhaps the most vital part of the deal was to utilise the Pomigliano plant better, involving the Nissan corporation and the joint venture Arna model. For a number of years the production of Alfa's advanced alloy flat-four engine had exceeded the body production capacity. A total of 864 power units is made each day by workers who operate in groups (rather than on a long line), while the transmissions are assembled individually by men who work on their own at 36 stations. Robot-like driverless trolleys, guided by underfloor cables, bring the components to each station and, 35 minutes later, take away the complete assembly, this process going on for 16 hours a day in two shifts.

The Arna situation is a bit confusing — even, apparently, to insiders, because even though the model is in full production the marketing arrangements have still not been worked out between the Nissan and Alfa Romeo importers. Apart from the wheels and the badging the Nissan Cherry Europe and the Alfa Romeo Arna are identical, Powered by the Alfa flat-four unit and using the 33's running gear. Alfa Romeo will sell the Arna in Italy, Nissan-Datsun the Cherry Europe in Britain, but details have not been thrashed out for all the other markets.

Alfa Romeo own 66 per cent of the Arna Operation, Nissan 33 per cent, though the Japanese value in each car is only 20 per cent. The bodies are made in the nearby Ave(lino plant then taken to Pomigliano for Painting, assembly and trimming, and it becomes clear that Alfa Romeo are committed to building up production of the 33 as a priority, letting the Ama take up spare capacity.

In the first full year 30,000 Arnas will be built, alongside 90,000 of the type 33, but in 1985 Alfa Romeo expects the plant to be running at or near its 172,000 capacity with a third of the production being the Ara. Nissan takes 20 per cent of the Arna production, 6,000 in the first year rising to 12,000 in 1985, Alfa Romeo selling half of their share on the Italian market.

Dottore Franco Perugia, Alfa Romeo's director of publicity, leaves no doubt that the Italian company is in the driving seat on this deal, its priority being to build up the 33's sales on home and export markets, an estate car model being due in 1984 to widen its appeal. Massive financial losses have been incurred since 1979 but are diminishing year by year, the company expecting to break even in 1984 and to show a profit in 1985. An investment of £170 million per year for the next five years is scheduled, the Pomigliano plant initially having the lion's share of this. The plant is now fairly highly automated, having 80 robots on the production line, an automatic stacking system in the warehouse, designed by Olivetti, and an advanced anti-corrosion and paint process.

The Italian market, where Alfa Romeo sell 55 per cent of their production, is down by 8 per cent at the moment, and more seriously, the luxury car market is down by 12 per cent. This, of course, is Alfa's own territory, and Doss. Perugia makes no secret of the fact that the Milan production line will be on short time next year, with production down to 90,000 cars.

The company will be negotiating 4,000 permanent redundancies with the unions from a workforce totalling 27,000 ("these will be labelled 'crisis talks', but you have to realise that this is a ritual"), but a more positive aspect is that the short-time working will enable the company to install more advanced production equipment, and to tool up for an important new model due next autumn. This is likely to be the Giulietta, while in the further future the Mena will be replaced by a completely new model late in 1986.

The Alfa Romeo 164 (already dubbed the "Alfona") is a joint project by Alfa Romeo, Fiat and Lancia to give all three companies a flagship model for the latter half of the decade. Sneak photos show it to be a large, handsomely styled wedge-shaped car which will be powered by a variety of engines, in Alfa's case anything from the 2-litre four-cylinder to the 2.5-litre and a new 3-litre V6, and it will remain a rear-driven model. The 164 is being developed by Alfa Romeo on behalf of the consortium, which would lighten the financial burden considerably.

Today Alfa Romeo is not as near the threshold of success as Austin-Rover, for instance, since the vital home market shows no signs of recovery. The organisation is more fragmented, too, but they don't refer to the "Sod" plant any more, Pomigliano d'Arco being a fully integrated part of the group and the home of the diesel engine and aero divisions. It will, clearly, become increasingly important as time go by. M.L.C.