MILAN: Italians waited with bated breath yesterday for talks between Prime Minister Mario Monti and Fiat boss Sergio Marchionne on the future of a troubled auto giant that once symbolised Italy’s boom.
Marchionne has repeatedly warned he may be forced to shut down one of Fiat’s five massive Italian plants, which are all producing way below capacity because of a slump in European car sales that has hit Italy particularly hard.
The subject is an emotive one in Italy — where Fiat is the biggest employer in the private sector and the company’s 113-year history is closely bound up with the ups and downs of the Italian economy and the trade union movement.
Marchionne laid out his cards on Friday, saying he hoped the Italian government had taken note that Fiat’s recent successes in Brazil had been helped by “financing and tax breaks” given to auto sector investors there.
Fiat’s Brazilian plant in Pernambuco, he said, had received “up to 85 percent financing on a total investment of $3bn”. “We know very well that, considering the current European rules, similar financing conditions are impossible within the European Union,” he added.
A report in La Repubblica daily said Fiat could unveil a programme of early retirements and reduced hours and a plan to allow production at its Italian plants by other auto companies to stave off outright factory closures.
The most recent controversy over Fiat was unleashed when the company last week said it was dropping a strategic plan it had announced in 2010 to invest ¤20bn and produce 1.4 million cars in Italy by 2014. Fiat said it could no longer meet the targets because the economic crisis has brought car sales in Italy back down to their level 40 years ago.
AFP
