Fiat SpA has just completed its public tender offer to buy the remaining 30 percent of Magneti Marelli it doesn't already own. Is this an advantage or disadvantage for you?
In terms of operative freedom and speed of action, it is clearly an advantage. To deal with a single shareholder is clearly faster and easier.
And how do your non-Fiat customers feel about this?
None of them have said they have a real problem with Fiat increasing its stake to 100 percent. Our customers ask us for innovative products at competitive prices and a fully satisfying service. That is all.
What are the advantages of the alliance between Fiat and GM for Magneti Marelli?
With both Fiat and GM, I believe that (former GM in-house parts unit) Delphi and Magneti Marelli begin every bid from what could be termed a 'preferred position.' But in the end, the company that gets the contract will be the one that offers the best product at the most competitive price. Of course, Magneti Marelli now has greater opportunities within GM - but the same works for Delphi within Fiat. As always, it will be a tough battle.
What is Magneti Marelli's e-procurement strategy?
We have created our own virtual market place - both for our clients and suppliers. We have been able to improve our customer relationships and make the purchasing process faster, leaner and more transparent.
Are there any risks with so many e-marketplaces, and with everyone having their own technology?
I don't think this will become a real problem. I am sure all the best and most innovative technologies will be applied in e-procurement. Quite rapidly, the more competitive technology will become the leading technology. But I don't think there will be a single, dominating e-procurement network. There will be many e-marketplaces of different size and orientation.
In 1999, Magneti Marelli doubled its operating profit - but it is still just 2.7 percent of sales. In the first half of 2000, it is down to 1.1 percent. What's the problem?
We are entering new sectors such as 'Infomobility' and diesel engine management. This means we are heavily investing in operations that are still generating zero turnover.
(For example, Magneti Marelli will not see the financial benefit of its contract to supply Fiat and GM with the new MultiJet common-rail diesel fuel injection system until the second half of 2002.)
A similar case in point is the Midas quick service network. We have just opened the 500th shop - but in this business it takes three years to get a new shop operating at full speed and six or seven years to pay back the investments. And we want other 500 shops in the next three years.
In other words, we are heavily investing in our future. This gives us a profitability level that is not as high as we would like, but we are looking toward the medium term.