MILAN (Bloomberg) -- Remember Fiat? It made its name building millions of modest cars like the tiny 500 and 600 hatchbacks in the 1960s and '70s.
Sergio Marchionne wants you to forget that Fiat. With the automaker now the full owner of U.S.-based Chrysler, Marchionne -- the CEO of the group -- is shifting away from the European mass market and, in the process, reshaping Italian industry.
To understand his vision, travel to Grugliasco, a suburb of Fiat's hometown of Turin. There, in a plant Fiat bought in 2009 from Bertone, a bankrupt design shop and contract manufacturer, workers in trim blue uniforms turn out about 150 Maserati sedans a day.
The sumptuous speedsters swathed in acres of soft leather bear little resemblance to a classic 500 or 600. "These models are a big step forward," Paolo Rapana, head of the final inspection team at Grugliasco, said as a line of sedans in colors such as Siena Bronze and Blue Passion paraded slowly by behind him. "We're the only plant in Italy working at full speed."
The same can't be said for Fiat's mainstay Mirafiori plant in Turin, a sprawling complex that in the 1970s churned out 600,000 autos a year. Today, it's almost abandoned, a vast zone of dilapidated buildings and weed-choked parking lots, as Fiat shifts its Italian operations from basic transport to upscale cars for wealthy Americans, Chinese and Europeans. For Mirafiori, that means production of a new Maserati crossover.
The change was sealed yesterday as the company said it will rename itself Fiat Chrysler Automobiles NV, with the parent holding company based in the Netherlands. The primary share listing will be on the New York Stock Exchange.
"The first encouraging signs of the potential of the premium strategy have now become visible with Maserati," Marchionne said on a conference call with reporters yesterday. The brand "had higher operating margins than Ferrari." It's said that every Italian has an opinion on two things: the "Azzuri" -- the national soccer team -- and Fiat. That means everyone from ministers to line workers feels entitled to second-guess Marchionne's plan, and across Italy there's a sense that it threatens the industrial heart of the country where Fiat was founded 115 years ago.
Fiat's production in Italy peaked in 1970, when it employed well over 100,000 people there and made 1.4 million cars. As recently as 2002, Italy accounted for more than a third of Fiat's revenue, and the company built more than 1 million vehicles at six plants in the country.
By 2013, Fiat's production in Italy had dropped below 400,000 autos and the country accounted for just 7 percent of global revenue. Less than 10 percent of the cars sold last year by the company, including Chrysler, were Italian-made as the bulk of the group's production has shifted to the U.S., Brazil, Poland and Serbia.
"We need a reality check," said Federico Bellono, the Turin chief of FIOM, Italy's biggest union, which represents thousands of Fiat workers. Marchionne pledged earlier this month to provide full employment to all of Fiat's 31,000 line workers in Italy by mid-decade. Last year, two thirds of them were furloughed for an average of four months.
Bellono doesn't discount the possibility of Fiat Group gaining traction in the luxury market after some initial success. Maserati, which targets selling some 50,000 autos next year, more than doubled deliveries to 15,400 in 2013. The brand's fourth-quarter profit surged to 123 million euros ($168 million) from 13 million euros a year earlier.