Due to the impending closure of their auto components factory—an early casualty of the European Union’s shift to electric vehicles—about 230 workers in Italy’s “Motor Valley” have gone on strike.

The Emilia Romagna facility, which produces internal combustion engine parts for automakers like Stellantis (STLAM.MI), Volkswagen (VOWG_p.DE), and BMW (BMWG.DE), is to be closed by Marelli, which is controlled by the U.S. fund KKR (KKR.N). The company has reportedly become “unsustainable” in light of the EU’s 2035 ban on selling new gasoline-powered vehicles.

Politicians from all parties have paid a visit to the garrison of employees permanently positioned outside the Ferrari headquarters in Crevalcore, less than 40 kilometers away.

The strikes had prevented any completed goods from leaving the facility until last week, but in recent days, a little outflow of components was resumed. This disagreement exemplifies the competing demands on governments as sectors of the economy and industry move toward more environmentally friendly energy to satisfy strict climate targets and improve energy security.

The push for green transportation might result in the loss of up to 70,000 jobs in Italy alone, according to the car lobby ANFIA.

While confirming its intention to close the facility, Marelli has postponed the plan, leaving the workers uncertain. Twenty or so spouses risk losing the whole family’s income.

“Our lives would end,” stated 57-year-old Grazia Vitiello, whose spouse is employed at Marelli. Samira Chouri, fifty, has eighteen years of experience in the Crevalcore facility.

“After years of sacrifices, as a family, we finally felt secure. But we realized that wasn’t true,” she said to Reuters while she and her husband, who works at the same facility, were getting ready for supper at home.

Their experiences show how the shift to electric vehicles is already having an impact on people’s lives, even before most customers worldwide will be able to afford to purchase electric cars—which are still more expensive than gasoline ones.

“BUILDING A HOUSE FROM THE ROOF”

2019 saw the creation of Marelli after Fiat Chrysler (FCA), which is now a part of Stellantis, acquired Japan’s Calsonic Kansei, controlled by KKR, its component subsidiary Magneti Marelli, for 5.8 billion euros ($6.1 billion).

Ten thousand of Marelli’s 43,000 workers were in Italy when the company was founded. Now, there are 7,300 fewer workers in Italy than 50,000 globally.

Marelli has said that 167 employees at its French plant in Argentan, which produces combustion engine parts, will also be impacted.

“I’m not upset with the EV transition,” Crevalcore maintenance worker Sergio Manni stated. “It’s the way Marelli deals with it: firing and closing, zero ideas.”

Many Crevalcore employees are in their 50s; they are too young to retire and too elderly to find employment readily. One such employee is Francesco Simeri, going through his second workplace crisis in ten years.

“It’s like watching the same horror movie again,” he stated. The unrest in Crevalcore and other incidents around Europe may lead politicians to believe that a commitment to climate policy and the populace’s well-being are mutually exclusive objectives as the 2024 EU elections get near.

Giovanni Sanfelice, Chouri’s spouse, stated that while he supported green transportation, the EU was not doing an excellent job of overseeing the shift. “You need to offer workers a solution. Otherwise, you sentence us to death,” he stated. “The EU is building a house starting from the roof.”

Although Stellantis is the only significant manufacturer in Italy, the third-largest economy in the EU, its components business is the second-largest in Europe, according to ANFIA, and it supplies numerous automakers outside. Nonetheless, according to ANFIA, 40% of its enterprises specialize in combustion technology, and over 70% are exposed to it.

Italy may be among the nations most affected by the shift to electric vehicles in Europe due to its reliance on this technology and the modest size of its businesses—two-thirds of them employ less than 50 people.

Francesco Zirpoli, a management professor at Venice University and the scientific head of its Center for Automotive and Mobility Innovation (CAMI), stated, “Small size means little money to invest to convert production.”

All parties except the government

Zirpoli stated that although the country’s declining auto sector posed the most significant danger, Italian component manufacturers could adopt more EV-oriented manufacturing. Italy’s car production has decreased from over two million units in the 1990s to less than one million units.

“This makes businesses very cautious about investing in Italy,” he stated. “Marelli is the perfect example of this.” While navigating the green transition, governments have resources at their disposal. A third of the EU’s post-pandemic recovery budget, which totals 800 billion euros ($845 billion), is designated for investments that promote climate change.

Through 2026, Italy is expected to receive grants and low-interest loans totaling over 200 billion euros, making it the most significant recipient overall. Rome allocated 8.7 billion euros in 2022 to boost the regional car sector, but aside from purchasing incentives, no considerable initiatives have been implemented yet.

The right-wing administration of Italian Prime Minister Giorgia Meloni has pushed to weaken European automobile emission regulations. It is opposing several climate change-related projects in its first year in office.

It makes the case that Italian companies cannot afford the previously set transformation targets. Italy would need to invest an additional 7–13 billion euros a year to reach Europe’s decarbonization targets, according to climate change think tank ECCO.

However, the country’s unwillingness to adopt a green economy has already impeded the introduction of entirely electric cars, which might make the shift more difficult. In the first nine months of 2023, 3.9% of new cars registered in Italy were electric vehicles (EVs), compared to 15.2% throughout Europe.

Vittorio Sarti of the UILM, one of the unions on strike in Crevalcore, stated, “Workers dream of owning an EV car… the only one who doesn’t is the government.”