Casaluci (Pirelli): « Future at risk, you need an urgent solution on governance »

The relationships between the Management Pirelli and Sinochem are at the least. The 2024 and quarterly financial statements were rejected by the representatives of the Chinese shareholder, leading to a stall in the Council who « is putting at risk the future development of the group » warns the CEO Andrea Casaluci. The stall was born following the declaration of forfeiture of the Control of Sinochem on Pirelli, deliberated by the board of directors and indicated in the 2024 budget. The Chinese councilors voted against believing that they still have this prerogative, thus also wrecked the agreement under discussion to overcome the problems related to the development of business in the USA. Casaluci is confident about the possibility of reaching a solution, but also worried about the persistence of the stall.

What is going on in Pirelli?
«I would start from a premise: that of 2024 is the best balance in the history of the group and also the quarterly just examined presents record counts. Despite the external context of the automotive world today is particularly complex, Pirelli emerges as one of the few realities that is continuing to grow, which has a more profitability than that of the industry in which it operates. Sustainability plans are also giving the results we had set ourselves. We are positioning ourselves as one of the most innovative companies ever in the automotive « .
However, Sinochem seems more interested in governance than results. Last year the Golden Power has subtracted power over the strategic subjects for Pirelli and now there is the problem of the American announcement on the Chinese components for connected vehicles, which again question their role in the group.

Let’s frame the situation first. Today from a geopolitical point of view there is a consolidated conflict between the United States and China. It had started with the first Trump administration and continued with Biden. In this context, having a relative majority shareholder directly controlled by the government of the People’s Republic of China is creating many difficulties in the development of business in the United States. Let’s clarify, there is no China theme for Pirelli, we have an extraordinary relationship with the country in which we have been with industrial presence for 20 years. So the theme is not of relationship with China, but the presence in Pirelli’s shareholding and governance of a Chinese partner controlled by the government and with a significant share « .

The rejection of the accounts, born following the dispute on the existence or not of the control over Pirelli, opened a rift, confirmed by the no to the proposal to overcome the US problem. What did you foresee?
« We proposed to Sinochem a solution, in the interest of all shareholders, to allow Pirelli to comply with the regulations in the United States, because the impacts are already on a market that is worth 40% of the High-Value segment.
Unfortunately, as Pirelli has already communicated, Sinochem has refused the proposal and instead informed us that he had presented his own directly to the Golden Power, without involving the company, not even subsequently on our solicitation, and which we still do not know today ».
Sinochem said yours was a proposal in Camfin’s interest.
« The solution was designed in the interest of all shareholders, because we would never have done an operation that was not fair and symmetrical for everyone. However, it should be remembered that Camfin, for almost 40 years, has been alongside Pirelli to support his industrial development and has always been available to evaluate solutions in Pirelli’s best interest ».

Now the situation is stalled. Wait for the Golden Power Committee to give an indication?
«Pirelli is an asset considered strategic for the country and we have protected technologies on which the Golden Power Committee supervises. The latter, who had already intervened in 2023 to restore the original spirit of the parasocial pacts, will make the assessments that he will consider most appropriate. For our part, the goal is to find solutions that can guarantee Pirelli to operate in all markets in the world, in particular the US one, without constraints and restrictions, thinking only of the industrial development of the company. In the absence of a solution, the development of Pirelli’s relevant technologies would be compromised and consequently even future growth would be strongly at risk, in all markets and especially in Italy « .

Why in Italy?
«Here is the heart of our technology: the research and development of Milan, the Digital Solutions Center in Bari, the Technological Pole of Settimo Torinese and the Bollate factory, dedicated to high -end bike tires. We have also been studying a new center of innovation and experimentation for the connected and sustainable mobility of the future that will connect all these realities involving our industrial partners in a large network. For this center we have already identified industrial or military sites in disuse to be redeveloped. This path of development, which may have a potential employment impact of up to a thousand highly qualified people, risks shipwrecked in the absence of a solution quickly. This is our concern, but we are confident of finding a solution ».

The Connected Vehicles legislation affects the software and hardware components starting from 2027. Is it so urgent to face it now?
«Yes, because the car manufacturers are already developing the vehicles that will be marketed in 2027 taking into account the new regulations. Hence the urgency.
The issue relating to restrictions on components for connected vehicles is the one that most worries us, because precluding development for the United States means affecting the future of cyber tyre: no car house would develop a vehicle with a technology that in the USA is banned for its technical characteristics and for the governance of the company that produces it. The Cyber ​​Tyre is a hardware and software system that allows you to collect unique data from the sensors in the tire and process it, thanks to our owner algorithms, in information useful to improve security and driving performance. Cyber ​​Tyre technology is not a limited application only to cars, but we are also developing it in Italy for monitoring and maintenance of the road network with important partners, such as Movyon, Autostrade per l’Italia and Anas « .

Have you already found that the current governance structure creates problems for Pirelli in the USA?
«Yes, we had feedback from the US authorities on the topics raised and we are constantly in contact to find a path. We have updated the Council on the evidence that emerged and on the perspective risks, which are not limited to the connected vehicles, but also to the duties and industrial investments necessary to expand the production capacity. We must be able to develop the strategies and for this reason it serves a quick and definitive solution to continue to grow and create employment in all the countries in which we operate, keeping the heart of innovation in Italy. Pirelli is an excellence that brings Made in Italy to the world. Continuing to grow is the most important thing for the future of the company ».