January 14, 2009 / 1:12 PM / in 10 years

UPDATE 2-Fiat names Sergio Cravero as head of Alfa Romeo

(Adds Italy minister comments on alliances)

By Gianni Montani

TURIN, Italy, Jan 14 (Reuters) - Fiat SpA FIA.MI on Wednesday named Sergio Cravero chief executive of its flagging Alfa Romeo sports car brand, replacing Luca De Meo, whose surprise resignation sent its share price lower.

De Meo was seen as a rising star on a mission to revive the iconic Alfa marque and his departure on Monday dealt a psychological blow to Fiat, Europe’s sixth-biggest car maker by unit sales.

Like other manufacturers, Fiat is facing the worst industry crisis in decades and says it is looking for a partner to help it survive.

In fresh evidence of anaemic demand, a source at Fiat told Reuters the closure from Jan. 12 to Feb. 8 of Alfa’s main plant at Pomigliano d’Arco near Naples had been extended to Feb. 15 with a further production halt scheduled for Feb. 23 to March 8.

A week-long production stoppage at its Cassino plant starting Feb. 2 was extended until Feb. 15, the source said.

Italy’s welfare minister, Maurizio Sacconi, added his voice to calls for an alliance on Wednesday, saying Fiat should find a partner in the short term.

“It needs to find a big partnership urgently,” Sacconi told reporters in Rome.

Fiat shares were up 0.1 percent at 5.205 euros in Milan. The DJ Stoxx auto index .SXAP was up 0.33 percent.

REORGANISATION

A wider reorganisation of the group’s core car division will see Cravero, head of marketing at Alfa since 2005, lead product development at Alfa Romeo as well as the two other car brands, Fiat and Lancia.

De Meo was the third executive to resign from Fiat’s car business in about a year.

In July, Roberto Ronchi quit as head of Maserati, a small luxury car brand managed outside the division. Antonio Baravalle left Alfa Romeo in December 2007, making way for De Meo.

La Repubblica newspaper quoted De Meo as denying reports that he was leaving because of disagreements with the group’s overall head, Sergio Marchionne. He declined to comment on reports that he could take charge of marketing at Germany’s Volkswagen (VOWG.DE). (Writing by Gilles Castonguay; Editing by David Cowell)

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