Fiat CEO, labour minister may meet on investments

MILAN Wed Aug 8, 2012 1:34pm IST

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MILAN Aug 8 (Reuters) - Fiat chief executive Sergio Marchionne and Italian labour minister Elsa Fornero have talked about meeting this month to discuss the Italian automaker's investment plans, Fornero told RAI's Radio Anch'io on Wednesday.

"Marchionne and I have spoken recently. We have talked about meeting in August. From the statements I have heard recently, I have understood that Fiat will maintain its investment plans here even though it is a difficult moment," Fornero said.

Marchionne, who also runs Chrysler, on July 31 confirmed Fiat's plan to spend 7.5 billion euros in 2012, most of it outside its home turf in Italy. But Fiat said on August 1 it could not give indications on future investments in Italy because of a five-year slump in the European car market.

In Europe, where it is losing money, Marchionne said Fiat would "sit on the sidelines" in terms of planning an update of its ageing Punto model.

The weak car market has reignited fears that Fiat could be preparing to announce a plant closure in Italy, where the economy contracted 2.5 percent in June from a year ago. Fiat has sent workers at many of its Italian plants home on temporary layoff in August due to slack demand.

"We reserve the right to deal with these issues, including the issue of closing plants, after the third quarter, when we will have a better reading of the European market," Marchionne said in a conference call on July 31.

In Europe, where mass-market automakers are waging a bruising battle with plummeting sales and shrinking margins, Fiat said last month its trading loss narrowed to 138 million euros from a loss of 207 million euros in the first quarter.

Highlighting the crisis in Italy, overall car sales there fell 21.4 percent in July, data showed last week, and Fiat sales suffered a similar decline. Car registrations also dropped in Spain and France. (Reporting by Jennifer Clark and Steve Scherer; Editing by Helen Massy-Beresford)

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