MILAN, Sept 21 Italian automaker Fiat
is spending 2.3 billion euros on a new factory in Brazil and
will receive public financing and tax breaks, something not
allowed in Europe, Chief Executive Sergio Marchionne said in a
statement on Friday.
"The last time this sort of transaction took place
(involving public financing) involving Fiat in Italy was at the
start of the 1990s in Melfi," the statement said, pointing out
that such financing is not allowed under EU rules.
The chief executive has come under pressure to provide
details of Fiat's Italian strategy as the economic recession
heightens concerns over job losses at the country's biggest
Fiat's decision to delay investment spending on new
mass-market models for Italy has caused a storm of criticism at
home. Italy's weak economy has fueled concern that the
carmaker's lack of investment could be a sign it is shifting its
focus to growing markets like Brazil and the United States,
where it controls Chrysler.
Fiat has delayed the launch of its new Punto car, which is
made in Italy, until 2015, for example.
Marchionne is due to meet Prime Minister Mario Monti,
Industry Minister Corrado Passera, and Welfare Minister Elsa
Fornero in Rome on Saturday to discuss its investment plan.
Construction started on the new factory in Brazil, Fiat's
second, on Sept. 18. Fiat will receive financing for up to 85
percent of the full amount, it said on Friday, and also will
receive tax benefits for five years after it starts production
of new cars there.
(Reporting by Jennifer Clark; Editing by Hugh Lawson)