* CEO to meet PM Monti about Fiat plans on Sept. 22
* CEO defends decision to delay investments in Italy
* "I never said I wanted to leave Italy"-Marchionne
* Chairman says the Agnellis stand united behind Marchionne
By Jennifer Clark
MILAN, Sept 18 Fiat boss Sergio
Marchionne said he will not close car factories in Italy despite
a plunging domestic market, responding to calls from unions and
politicians to clarify a multi-billion euro investment plan.
The chief executive has come under pressure to provide
details of Fiat's Italian strategy as the economic recession
heightens concerns over job losses at the country's biggest
Italian Prime Minister Mario Monti and his key economic
ministers will meet Fiat's executives on Sept. 22 to discuss the
carmaker's plans for Italy, the government said in a statement.
The company has only earmarked a fraction of the 16 billion
euros for Italian investment outlined in a five-year plan in
2010. Fiat said last week it was unrealistic to expect that a
project announced two and a half years ago could remain
"We're in a dramatic situation here, and I've never talked
about plant closures, I've never said I wanted to leave,"
Marchionne told Rome daily La Repubblica.
"I can assure you that it's a huge responsibility to make
these choices today."
The Agnelli family stands united behind Marchionne,
Chairman John Elkann said on Tuesday.
"We have reiterated today that the investment plan must take
into account a very difficult situation. We are studying the
situation to go ahead in a responsible way," Elkann told
reporters on the sidelines of an event in Turin.
Europe's car sales fell 8.5 percent in August, as demand in
southern Europe slumped. Ford and General
Motors are considering factory cuts in the region.
The executive, who shuttles back and forth between Detroit,
where he manages Chrysler, and Fiat's headquarters in Turin,
said the company spent 800 million euros developing a new
version of its Panda compact car "but it isn't selling, because
there is no market".
The company will release new information about its
investments on October 30. So far it has only announced a 2.5
billion euro investment in three plants, two in Turin and one
near Naples. One billion euros of that is for new small SUV
models and is now on hold pending an upturn in the car market.
Nearly 200,000 people work in the auto industry in Italy,
according to figures from the International Organization of
Motor Vehicle Manufacturers, compared to about 300,000 in France
and in Spain, and about 773,000 in Germany.
Fiat's launch of the new 500L compact car in Italy on
September 22 will be closely watched for any signs that demand
in the car market is picking up.
Fiat has been forced to idle its factories in Italy, where
car sales have fallen back to levels not seen in 40 years. The
company is expected to continue to temporarily halt production
off and on throughout the fall, union sources told Reuters last
But it is investing in the United States, where it unveiled
66 new models to Chrysler dealers last week, including plans for
a return of the sport Alfa Romeo brand to the United States. It
has also started producing a prototype for a new Maserati
limousine in Turin, which will be unveiled at the Detroit car
show in January and is aimed at the U.S. market.
Fiat's focus on U.S. investment has exacerbated concerns in
Italy that it might want to downsize at home.
Marchionne did not discuss financial or market targets in
the two-page interview, except to say that the car market in
Italy next year will "be very, very bad".
Fiat and its mass market competitors in Europe face a common
problem -- the continent has too many car factories compared to
market demand, but closing them down is costly and politically
tense at a time when the economy is weak.
He said his business strategy was to exploit the strong car
market in the United States in order to "protect the presence of
Fiat in Italy and Europe" where the company has accumulated
losses of 700 million euros so far this year. Its business is
profitable because of strong growth at Chrysler.
That's 50 million euros more than Mediobanca's estimate of a
650 million euro loss for Europe this year.
Italian unions say Marchionne should meet with government
ministers to reveal his investment plans.
"If, as all signs indicate, Fiat is oriented towards cutting
production (in Italy), then (the government) should ask itself
how to attract another manufacturer," said CGIL union leader
Susanna Camusso with L'Unita newspaper on Tuesday.