UPDATE 1-Fiat working on new industrial plan for Italy -unions
ROME Oct 16 (Reuters) - Italian carmaker Fiat Chief Executive Sergio Marchionne will announce a new, scaled-back investment plan for Italy on Oct. 30, along with third-quarter results and new financial targets, union leaders said on Tuesday.
The combined Fiat-Chrysler group, which now makes more than two thirds of its profits in the United States, has put on hold a five-year, 16 billion euros ($21 billion) investment plan for Italy dating from 2010.
"The industrial plan is being changed to take into account the different market conditions," said Fim-Cisl leader Giuseppe Farina after meeting Marchionne.
The changes "will guarantee investment in new models and continued production" in Fiat plants.
Fiat had no comment, and Marchionne left the meeting without talking to reporters.
In 2010, Fiat promised the investments in return for greater labour flexibility. New labour contracts are now in place at its plants, but Fiat has meanwhile shifted some production to lower cost countries and postponed investments in Italy, where car sales have slumped to their lowest levels in 40 years.
That stalled investment plan has sparked fears that Fiat could close plans or cut staff in Italy, where it is the biggest private industrial group and employs more than 20,000 people.
Marchionne has said he will not waste money by making investments during a five-year European market slump, and last month predicted Fiat would lose 700 million euros in Europe in 2012.
Marchionne was meeting with unions on Tuesday to update them on the company's investment plans, reiterating that he did not intend to close any of Fiat's five factories.
The carmaker recently postponed the launch of its new Punto compact until 2015. Production at its Melfi factory, where Fiat makes the Punto, will shut down from October 17 to November 9.
Last month, a Fiat source had said the carmaker's board would not discuss an industrial plan on Oct.30. On Tuesday, however, unions said the company would instead provide some details about how it intended to move forward with its investments in Italy.
"Marchionne told unions that Fiat is working on a new industrial plan for Italy based on the current economic outlook, and that it will be presented October 30," said Roberto di Maulo, secretary general of Fismic labour union, after a meeting with the executive.
At Mirafiori, its flagship plant in its hometown of Turin, Fiat plans to start making a small Fiat-branded sports utility vehicle (SUV) at the end of 2013 and a small Jeep SUV in the second quarter of 2014. Work on installing the production lines has not begun and the company has not given a date for when the lines could be installed.
An announcement on Oct. 30 that the Mirafiori investment is going forward would help dampen criticism over Fiat's decision to delay the launches of new models until the economy improves.