Could an entire town go bust?

Don’t put all your eggs into one basket

Pomigliano d’Arco is a town of about 40,000 inhabitants in Italy. It lies northeast of Naples and quite near to Mount Vesuvius, once the scene of some real fall-out. The town basically has one industry – automobiles. And it also has only one kind of car – Fiat. The entire town relies on Fiat for its very life.

Disaster country

Mimmo Vacchiano stands outside the locked gates of the Fiat car plant and says there is going to be a disaster unless its gates reopen. And the people in this part of Italy know all about disasters. “If this plant closes, there’s nothing else here, only unemployment.” But there is something else in the town and that is organized crime on a massive scale. “We can choose which way to go - unemployment, crime or a volcanic eruption,” says the 48-year-old father of two.

We live in panic

“We’re living in panic. Every morning I promise myself that today is the day I will take a Personal Loan and buy railway tickets for my family so we can move to Northern Italy where there is still hope. Here in the south job opportunities are zero. This place is going to be like Pompeii after Vesuvius blew her top.”

Unemployment

Unemployment in Pomigliano already runs at nearly 20 percent and Fiat’s temporary closure of the plant - in a bid to slash costs, same as other major automakers – has brought the town to its knees. Fiat employs 5,000 people directly and the plant provides jobs for 20,000 if suppliers are taken into account.

A shut down?

The Pomigliano workers are among the most militant in Italy. They have already clashed with police and are now warning the government not to do anything rash with the Fiat plant. “Shutting this plant would cause a revolt,” said Vacchiano. The Fiat CEO has said he will only meet unions once he has a clearer idea of the possible deal with Opel but, with Fiat idling the plant for weeks at a time, workers say monthly welfare payments of about $950 are not enough.

A melt down?

The volcano of Mount Vesuvius cannot be completely disregarded. The famous eruption in AD 79 led to the destruction of the Roman cities of Pompeii and Herculaneum and the death of 10,000 to 25,000 people. The volcano has erupted many times and is still considered active. Today it is regarded as one of the most dangerous volcanoes in the world because of the 3 million people living close to it and its tendency towards explosive eruptions.

The auto industry’s woes

CBS aired an overview of the state of the auto industry yesterday on their newscast and the senior editor, Joe Wiesenfelder, put the subject most succinctly:

• If fuel prices weren’t high and the economy got soft – they might be OK.
• If fuel prices went high but the economy was still strong – they might be OK.
• All these different factors together leave them with losses at every turn.

Back in Italy

Things are tough and things are going to get tougher. We built a car industry to save the world and make it a better place to live. Now that industry is sick and we’re all going to get the plague.