Editor's note: Paolo Cantarella served Fiat CEO in the 1990s. A previous version of this blog mentioned a incorrect time period.
When Sergio Marchionne became Fiat CEO in 2004, he quickly purged the automaker of underperforming top managers and most of its bad habits.
But one weakness remains: Fiat still promises big future investments, then underdelivers in the actual spending.
Maybe this bad habit survives to please Italian politicians and unions. Both are always hungry for flamboyant investment announcements to bolster their credibility in a country that is slowly de-industrializing.
It's really hard to imagine how Fiat could invest 20 billion euros (about $27 billion) in Italy up to 2014, as Marchionne and Fiat Chairman John Elkann were reported to have promised when they met Prime Minister Silvio Berlusconi in Rome on Feb. 12.
The figure is part of Fiat's 2010-2014 strategic plan but it was wrongly extrapolated by politicians. Marchionne's plan promises investments of 26 billion euros – but for Fiat as a whole over five years.
On Feb. 15, Marchionne told an Italian government industry commission that Fiat's automotive division will invest 16 billon euros in the next four years and the newly separated Fiat Industrial trucks and tractors unit will invest 5.5 billion euros.
That adds up to 21.5 billion euros. There is no way Fiat's operations in Italy could receive 20 billion euros – almost four-fifths – of that total global investment.
Time will tell how much Marchionne has overpromised in terms of future investments. I suspect he has probably promised too much because unreastlic pledges are part of the air in Fiat's Turin headquarters and Marchionne has breathed in too much of that air.
But his promises are less exaggerated than those attributed to him by politicans and unions, and much less than those of some of his predecessors.
In the early 1990s, then-Fiat CEO Paolo Cantarella promised with a grand fanfare a first-phase investment plan of 20 billion euros, followed by a second phase of 10 billion euros.
Giovanni Agnelli, who was Fiat's chairman at the time, later set the record straight. The investments were just 20 billion euros in total, thus Cantarella had overpromised by half.
If Marchionne can end Fiat's history of big, undeliverable promises on future investments, then his clean up work might really be completed.