Two Fiat plants may close without US export boost: CEO

MILAN - Agence France-Presse

REUTERS photo

Two Fiat auto factories in Italy may close owing to a weak eurozone market unless there is a rise in exports to the United States, chief executive Sergio Marchionne said on Friday.

"The Fiat factories in Italy have the opportunity to export to the United States," Marchionne told leading daily Corriere della Sera. "The weakening of the euro to the dollar helps, but the costs must be competitive," he said.

Marchionne has been credited with turning around the Italian company from the brink of collapse and engineering an ambitious partnership with US giant Chrysler after it was forced into bankruptcy during the global economic crisis.

"We have all we need to succeed in seizing the opportunity... but if that doesn't happen we must pull out of two of the five current sites" in Italy, the Italian-Canadian CEO said without naming the factories affected.

Since Fiat went into a partnership with Chrysler, Marchionne has toughened working conditions for Fiat's operations in Italy, allowing factories to operate round the clock as they do in the United States.

Fiat, which also owns luxury car makers Ferrari and Maserati, had to quit Italy's employers federation in order to do so, because it flouted longstanding collective bargaining arrangements.

The group, Italy's biggest private sector employer, was a driver and symbol of the country's postwar economic boom.

The deal on new working conditions, signed by Fiat and all unions with the exception of the left-wing Fiom, also included increased overtime, reduced breaks and penalties for those who are absent without permission.

Workers at two of Fiat's five factories -- southern Pomigliano and the flagship Mirafiori factory in northern Turin -- approved the new conditions by referendum, and they were extended to the others at the start of the year.

Asked about the future of the alliance between Fiat and Chrysler, Marchionne noted three possibilities: the listing of Chrysler on the stock market, the acquisition by Fiat of 100% of Chrysler's capital or a merger of the two groups.

The first is the "least likely," he said.

Last month Marchionne told US media that Chrysler and Fiat would merge into one company "not before 2013 and no later than 2015." Fiat took over operational command of the US automaker in June 2009, when Chrysler emerged from a government-supported bankruptcy. In June 2011, it took a majority stake and now controls 58.5 percent of the company.