If Fiat S.p.A. didn’t have its money-losing Italian plants, it would have a better performance, according to CEO Sergio Marchionne. Italian news agency ANSA said that Marchionne told the television program Che tempo che fa on Sunday that no portion of the 2 billion euros of trading profit that Fiat is aiming for 2010 will come from Italy, where all Fiat passenger-car plants are racking up losses.
In a pre-recorded interview with the program, Marchionne had said, "Fiat could do more if it could cut off Italy."
Fiat, Italy's biggest industrial group, has made promises to invest billions of euros in Italy if it receives more labor flexibility at its Italian factories, where production is costlier than at some of its foreign plants.
Analysts were surprised last week when Fiat, which owns 20% of Chrysler Group, upgraded its 2010 guidance for trading profit well above forecasts. A Fiat, trading profit is calculated as earnings before interest, taxes and one-time gains or losses.
Marchionne intends to shut down Fiat's Termini Imerese plant in Sicily and he has gotten the support of a majority of workers at the company's Pomigliano D'Arco plant near Naples to present several landmark revisions to the national labor contract.
The problem is that one key union opposes the plans. If the new working agreement is employed, Fiat will produce its new Panda minicar at the Pomigliano D'Arco plant. [via autonews - sub. required]