Fiat reassures Berlusconi over Italy plans

Sat Feb 12, 2011 11:33am EST

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By Catherine Hornby

ROME, Feb 12 (Reuters)- Fiat (FIA.MI) boss Sergio Marchionne reassured Prime Minister Silvio Berlusconi on Saturday over his plans for Italy after suggestions of moving the Turin-based group's headquarters outside the country caused outrage.

Berlusconi summoned Marchionne and Fiat Chairman John Elkann for a meeting at his office on Saturday to clarify whether Fiat would pursue its $27 billion investment plan for Italy.

Earlier in February, the Italian-Canadian manager said he might move the carmaker's headquarters to the United States after merging it with Detroit-based peer Chrysler in two or three years after a deep restructuring.

The suggestion caused outrage in Italy, where Marchionne is already under attack from unions for pushing to impose new labour conditions under a plan to boost productivity at car plants.

"(Fiat Chairman) John Elkann and Marchionne have confirmed to the government the intention of pursuing the Italian group's development objectives," Berlusconi's office said in a statement on Saturday after the meeting.

"The government acknowledges positively the intentions shown by the company as well as its role on the global market."

Fiat's plan for Italy, known as Fabbrica Italia, envisages 20 billion euros ($27 billion) of investment in exchange for more flexibility at its five auto plants in Italy.

The statement carried no details about Fiat's plans but said the government will help create useful conditions for investment.

NEW CONDITIONS

Industry Minister Paolo Romani told a news conference that Fiat had ensured it would maintain its "Italian heart" even as it expands worldwide, but the company wanted to see Italy keeping up with global standards.

"There is a certain way of manufacturing cars in the world, Fiat is asking that things are done in Italy like they are done in the rest of the world," Romani said. Workers have already accepted the new labour conditions at the historic Mirafiori in Turin plant and at Pomigliano, in the south of Italy.

Sergio Chiamparino, the mayor of Turin where Fiat is based, also welcomed the outcome of the meeting, which he attended, and said the Italian identity of the group was ensured.

"The company reaffirmed its intention to retain its Italian identity, in all its aspects, while recognising that it relies on global dynamics," Chiamparino said.

Fiat took a 20 percent stake in then bankrupt Chrysler under a 2009 U.S. government rescue plan.

The maker of the iconic Fiat 500 now controls 25 percent and is speeding up steps to reach full control of Chrysler.

Fiat, Europe's No.6 automaker by sales, is losing market share at its core European markets and has recently been overtaken by German rival Volkswagen (VOWG.DE) as Brazil's largest car seller.

(Writing by Danilo Masoni and Lisa Jucca; editing by Patrick Graham)

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