Marchionne needs to reassure Berlusconi that he isn’t planning to move Fiat

Article by Christian Andrei, on February 14, 2011

Italy's Prime Minister Silvio Berlusconi has a meeting scheduled with Fiat S.p.A. CEO Sergio Marchionne to discuss Fiat's future plans. The 58-year-old Marchionne must reassure Berlusconi that he has no plans to move Italy's biggest manufacturer a month after winning government backing in a battle with unions over labor concessions.

Marchionne recently caused a stir in Italy when he said on Feb. 4, 2011 that the Turin-based carmaker and its 25 percent-owned Chrysler Group LLC may “end up looking like one entity,” possibly based in the United States. He later backtracked and said no decision has been made.

Labor Minister Maurizio Sacconi, who will also attend the meeting, said integration with Chrysler may lead to new combinations, which is why he believes that it’s vital for Italy to have a “prominent position.” Sacconi also said that the government wants to verify with Fiat's management the status of the Italian investment plan.

Fiat plans to build as many as 280,000 cars and SUVs annually for the Alfa Romeo and Jeep brands at its Mirafiori plant in Italy starting in 2012 as part of a Chrysler venture.

In an agreement with unions, employees will work longer, take shorter breaks and risk having pay withheld for persistent absenteeism.

The Mirafiori deal is part of a EUR20 billion ($27 billion) investment project to revamp Fiat's five Italian car plants, where it aims to produce 1.4 million vehicles annually by 2014 from 650,000 in 2009. [via autonews - sub. required]

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