Globalization failures in a neo-liberal world: the case of FIAT Auto in the 1990s

In the 1990s FIAT Auto embarked on an ambitious globalization project (Project 178). FIAT Auto’s main aim was to enter new markets in emerging economies, although globalization also opened up opportunities for cost reduction through global sourcing. The countries chosen were ones in which it was anticipated that neo-liberal programmes of economic reform would result in fast economic growth. The result however was slow growth and economic crises. For FIAT Auto the consequence was a massive shortfall in anticipated sales which contributed along with a number of other factors to a deep financial crisis and a dramatic restructuring of the FIAT Group. This paper seeks to examine and explain these events drawing on a global value chain approach to the analysis of corporate profit and accumulation strategies.