Fiat Outlines Strategy To Cut Costs Amid Recession
June 18 2009 - 5:07AM
Dow Jones News
Fiat SpA (F.MI) Thursday said it plans to keep production of
cars at its Termini Imerese plant in Sicily only until 2011 as the
Italian car maker seeks to contain costs to face the economic
crisis.
Fiat Chief Executive Sergio Marchionne told a meeting with the
government and the company's labor unions that the Termini Imerese
plant, which employs about 1,700 people, would be retooled from
2012. He didn't elaborate.
Fiat said it would define a layoff plan at its agricultural and
construction equipment unit CNH. Marchionne told a meeting attended
by Italian Premier Silvio Berlusconi and union officials that it
was hard to maintain employment levels due to the recession.
The Italian economy is expected to contract by more than 5% this
year, after shrinking by 1% in 2008, marking the worst recession
since World War II.
Workers at the Termini Imerese facility went on strike last
month, fearing the closure of their plant. Further protests are
likely, according to analysts.
The Italian government and Fiat could agree to a EUR900 million
financing plan to help keep its plants running near full capacity,
daily la Repubblica said Thursday.
The government last month said it would continue to help Fiat
only if it keeps its five Italian plants open as it seeks to expand
to create one of the world's largest automakers.
Fiat last week took a stake and management control of Chrysler
after the U.S. car maker emerged from bankruptcy protection.
-By Giada Zampano and Luca Di Leo, Dow Jones Newswires; +39 06
697 66921; luca.dileo@dowjones.com