Marelli, Auto Parts Manufacturer, to Close Italian Plant Due to Declining Petrol Engine Demand

20 Sep, 2023

Marelli, Auto Parts Manufacturer, to Close Italian Plant Due to Declining Petrol Engine Demand

Auto parts manufacturer Marelli announced its decision to close one of its Italian plants, located in Crevalcore, Emilia Romagna. This plant is involved in the production of components for internal combustion engines (ICE). Approximately 230 employees are currently working at this facility, which manufactures plastic and aluminum components for ICEs.

The shift towards electric mobility has rendered Marelli's ICE component business unsustainable. A union representative who engaged in discussions with the company lamented, "Electrification claims its first victims in Italy."

Marelli released a statement explaining that its decision stems from the diminishing demand for ICE-related business due to reduced investments by automotive industry players. Additionally, escalating costs of raw materials and energy have played a role in this choice. Projections indicated that volumes and revenues at the Crevalcore plant would continue to decline in the coming years, with capacity utilization expected to plummet to a mere 30%.

To adapt to these changes, Marelli intends to relocate the production of plastic components from Crevalcore to another facility within Italy, while aluminum component production will be outsourced.

Unions, following their meeting with the company, issued a separate statement warning of potential further closures unless the Italian government supports the prompt transformation of plants still connected to ICE technology.

Marelli, a company owned by private equity firm KKR, was established in 2019 following the sale of Fiat Chrysler's car parts unit, Magneti Marelli, which is now part of Stellantis.

Marelli has expressed its commitment to collaborating with unions and relevant institutions to mitigate the impact of this decision on the affected workforce.