Fiat SpA to spend €20 billion revamping its Italian operations

Fiat SpA is to spend €20 billion in revamping its domestic Italian operations, said its Chief executive. Sergio Marchionne, Fiat SpA chief executive announced the firm’s plans after a meeting with Italian Prime Minister Silvio Berlusconi. Italian Industry Minister Paolo Romani said Fiat is keen on expanding its international operations but will maintain its thriving Italian presence as well.
Marchionne was speaking after attending a meeting with members of Berlusconi’s administration. Fiat CEO and Chairman John Elkann was at the meeting as well.

Earlier on, Marchionne had alluded to a possible move to the US, with a complete merger with US based Chrysler Group LLC, but later denied there were any plans for such a move. Fiat owns a 25 per cent stake in Auburn Hills, Michigan-based Chrysler.
Fiat plans to build as many as 280,000 cars and sport-utility vehicles a year under the Jeep and Alfa Romeo brands at its Mirafiori plant in Italy starting in 2012 as part of its alliance with Chrysler. Under an accord with unions, workers will put in more hours, take shorter breaks and risk having pay withheld for persistent absenteeism.

The Mirafiori agreement is part of a project to revamp Fiat's five Italian car plants, where the company aims to raise annual production to 1.4 million vehicles by 2014 from 650,000 in 2009. Marchionne will also discuss those goals at a parliamentary hearing in Rome on February 15.

Fiat aims to improve productivity and capacity utilization to restore profitability in Italy, still its main market. None of the company's earnings came from Italy in 2010, Marchionne has said. The automaker may lose €814 million in Europe in 2011, according to Kristina Church, a London-based analyst at Barclays Capital.

Fiat can gain a further 10 per cent stake in Chrysler in two steps if the US carmaker reaches milestones including some sales goals outside of North America. Fiat has an option to raise its holding to 51 per cent; a level Marchionne has said he aims to reach before the end of this year, after Chrysler repays US and Canadian government loans.

Fiat S.p.A. is an Italian automobile manufacturer, engine manufacturer, financial and industrial group based in Turin in the Piedmont region. Fiat has also manufactured railroad vehicles, tanks and aircraft. Fiat-based cars are constructed all around the world, with the largest number produced outside Italy being built in Brazil, where they are best-sellers. It also has factories in Argentina and Poland.

© Copyright 2010-16 Invest in EU All rights reserved.