Question

Fiat announces its intention to build an all-electric car plant in Belvidere, Illinois. Fiat also announces it intends to sell one million vehicles per year. It hires 3000 additional workers - enough to keep the plant operating at full capacity. Fiat also signs contracts with its unions committing to pay all of its workers at this plant for 2 full years whether or not the production at the plant reaches capacity. Is this a strong strategic commitment by Fiat?

Answer 1

Yes, this is Fiat's strong strategic commitment, as a company's strategy corresponds to the set of actions that a company plans to achieve its long-term goals and objectives.

When the company then announces to stakeholders its intention to build an electric car plant in Illinois, as well as its plans to sell one million vehicles a year, hire 3,000 additional workers, and sign workers' pay contracts for 2 full years, it is assuming to its target audience a commitment to comply with their declarations, which means that the new investments and launching of new products will impact the company as a whole, its profitability, market value and competitiveness, which can then be understood. as a strong strategic commitment by Fiat.