Fiat SpA has assured the Italian government that the carmaker will not resort to job cuts in the country. Fiat chief executive Sergio Marchionne affirmed the carmaker’s commitment for Italy during a meeting with newly appointed industry minister Flavio Zanonato on May 31, 2013. Zanonato had recently asked Fiat "to stay in Italy" after consummating a planned merger with American unit Chrysler Group in 2014 after local unions expressed worries that the carmaker will transfer its corporate headquarters to the United States.
During the meeting Fiat and Zanonato pledged to work together to re-launch the Italian car market, the ministry said in a statement. They also emphasized the importance of the carmaker’s Italian manufacturing base as part of its brand image. The meeting was also attended by Fiat's controlling shareholder John Elkann, who also assured the carmaker plans to maintain employment in Italy despite falling demand for vehicles in the country.
Vehicle sales in Italy dropped 20 percent in 2012 and are expected to decline 5 percent more this year to around 1.3 million vehicles. Although the Italian government does have some ways to help revive domestic sales, Fiat is planning to produce Jeeps and a new line of Alfa Romeos in Italy for export to markets in Asia, Latin America and the US.
While Fiat’s plants are operating at below capacity, the Italian carmaker has repeatedly given assurance to politicians and unions that it has no plans to shut down its local sites. Fiat’s losses in Europe are offset by high demand for luxury marques Ferrari and Maserati, as well as for volume brands in the US and Brazilian markets. [source: Reuters]