Alfa Coming to U.S.? Don't Bother

March 31, 2008

As I read the morning RSS feeds for this blog, I rarely have to clean up after a spit take. But here I am, swabbing down after the latest Automotive News story about Alfa Romeo's return to the U.S.

I refuse to believe Alfa's coming to the U.S., because I was around when they left in 1995, and things haven't gotten better.

There's so much wrong with the logic behind the News story - not the reporting, but if it's true, Fiat's logic behind bringing Alfa back -- that you have to laugh. The idea to get into the U.S. market is to either buy an old Big Three plant and retool, or to expand one of the company's Case New Holland factories. Sales would start in 2011 or 2012, and Alfa would expect to build about 150,000 vehicles a year for the U.S. and some for export to Europe.

Now, building for Europe I can see, since the U.S. is now a low-cost country. But everything else sounds like the Italian version of Punked!, in which some desperate state tries to get manufacturing jobs and gets stuck with Alfa instead.

Start from the premise. Buying an old factory and retooling might make financial sense, but the former employees of that plant will inevitably ask for jobs at the newly reopened plant, making a union work force more likely than not. That's not how any transplant has succeeded in the U.S., with the exception of Toyota at NUMMI. The rule is go greenfield - build your own factory and your own workforce far from existing plants and the UAW. It's sad, but true.

Second goof: in case you haven't read, Fiat, the U.S. car market is shrinking, not growing. Where are those 150,000 sales going to come from?

Third false premise: reliability. Even the lowliest Korean car has a higher quality perception and gets more red circles in Consumer Reports than the best Italian car. Given Alfa's past reputation, isn't it likely that not only will the cars have quality issues, but that shoppers will think they have more issues -- and report back to J.D. Power thusly?

Fourth, let's go back to sales. Fiat CEO Sergio Marchionne wants to build 150,000 Alfas and sell most of them in the U.S. Where will those buyers come from when Saab can't break 40,000 units a year?

What kind of folly makes second-tier automakers from Europe, China, and even Japan think that selling cars in the U.S. is a good idea? Is it Piechian vanity, or just a raw number sitting out there that has to be fulfilled for an up and coming capitalist to take the next step to becoming Prime Minister?

The thirst for Italian cars here may be roughly equal to the thirst for Italian-made coffee makers. I want one of those Francis Francis espresso machines desperately because they're stylish, technically fascinating and come in hot colors. And even though I'd pay $1000 for it, I don't think car shoppers are ready to pay $200,000 -- the equivalent markup -- for a 35-mpg hatchback with an iffy reliability history.

Call it a reverse DeLorean. It's not quite the swindle that China's MG suckered in the state of Oklahoma with, but it's bound for failure. Any elected state official that puts up tax dollars to play Alfa's game of doom should be deposed and forced to drive a Milano with a broken connecting rod as punishment.

Buyer beware.

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