Fiat CEO to meet with Italian labor minister to discuss investments

Article by Anita Panait, on August 9, 2012

Fiat chief executive Sergio Marchionne and Italian labor minister Elsa Fornero may enter into talks this month to discuss the Italian carmaker's investment plans, Fornero told RAI's Radio Anch'io. Fornero said that based on statements she has heard, she understands that Fiat will maintain its investment plans in Italy despite the current hard times.

Marchionne, who is also the chief executive of Fiat unit Chrysler Group, confirmed on July 31 that the Italian carmaker is planning to invest EUR7.5 billion this year, most of which will be spent outside Italy. The next day, Fiat released a statement saying that it would not invest more money in Italy due to the five-year depression in the European auto market.

Marchionne has remarked that in Europe, Fiat would just "sit on the sidelines" in terms of planning an update of its Punto subcompact. The slumping European car market has led to speculations that Fiat might soon announce that it would shut down a second plant in Italy, whose economy had shrunk by 2.5 percent in June 2012 from a year ago.

Fiat implemented a temporary layoff in many of its Italian plant earlier this month due to weakening car demand. Marchionne, however, said that any plans for its Italian operations may be announced after the third quarter of 2012, when the company will have “a better reading of the European market."

Fiat disclosed last month that it managed to cut its trading loss to EUR138 million from EUR207 million in the first quarter of 2012, this despite facing a slumping European car market. The auto industry is likewise having a difficult time in Italy, where overall car sales dropped 21.4 percent in July to 108,826, according to data from Italy's Transport Ministry, with Fiat suffering a similar fate.

Topics: fiat, investment

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