* Fiat CEO says Italy, Europe no longer sole end markets
* Seeks to rally staff in Italy
* Mum on models, volume, time frame
By Silvia Aloisi
MILAN, Sept 25 Fiat's chief executive
confirmed on Tuesday plans to have its Italian factories make
cars that will be sold outside Europe, particularly in the
United States, as the company looks to counter a five-year
market slump in Europe.
Sergio Marchionne told staff in Italy that Italy and Europe
could no longer be considered the only end markets for Fiat,
which also runs Chrysler in the United States.
"We can and we must think of the car sector in Italy in a
different way, refocus it ... so that it becomes an important
production centre for exports outside Europe. In our case, that
means above all the United States," he said.
Fiat had already said after a meeting over the weekend
between Marchionne and Prime Minister Mario Monti that it would
start making cars at its idled Italian factories for sale
A source close to the situation said that meant producing
cars, probably Jeep and Chrysler models, for the United States,
where the market is growing and Chrysler plants are running at
Fiat, which has been managing Chrysler since a 2009 bailout
agreement with the U.S. government, has 61.8 percent of the U.S.
In the past three years, Chrysler's turnaround has made it
the biggest income generator for the combined group,
contributing more than two-thirds of total profits.
Fiat expects to lose 700 million euros in Europe this year,
and Marchionne is under pressure in Italy to explain how it can
keep its factories there open when car sales have plunged to
their lowest level in 40 years.
Europe is in the throes of a debt crisis that has taken a
toll on a number of industries, including autos.
Fiat has effectively abandoned plans to pour 16 billion
euros (US$20.6 billion) into its Italian factories, putting
investments on hold until it sees signs of a market rebound.
Unions and analysts have said that it was difficult to see
how Marchionne could make those plants, currently running at
around 50 percent capacity, produce cars for the U.S. market if
he keeps delaying investments.
No details about models, production volume or the time frame
for the export plan have been provided by the company.
"We will ask (Marchionne) to get started with the new
models, that's the choice that Fiat has to make," Luigi
Angeletti, leader of the UIL union, told Italian radio on
Tuesday before a meeting between labour groups and the Rome
Marchionne is asking the Italian government to help the
manufacturing sector become more competitive. Industry Minister
Corrado Passera said on Monday that the government was
considering tax or other incentives to help exports.
In his speech, meant to rally staff in Italy behind him,
Marchionne said he was aware that his frequent trips to the
United States might have created fear among Fiat's 20,000
Italian employees that they were being "abandoned".
He said his commitment towards Fiat was unchanged, and he
told local staff to ignore critics who have accused the company
of gradually disengaging from its home country.
He also repeated calls for the European Commission to
guarantee a level playing field and attacked German carmakers
for "creating conditions that are more favourable to their own
Marchionne has accused German rival Volkswagen of
contributing to a "bloodbath" among carmakers by waging a price
war in Europe and ramping up production at a time when the
continent faces huge overcapacity.