* Scheme to allow production of Punto at Melfi to continue
* Fiat will invest 1 bln euros for 2 new models at Melfi
TURIN Jan 15 Fiat has asked the
government to approve a special lay-off scheme at its Melfi
plant in southern Italy so the company can restructure it before
production of new models starts, the car maker said on Tuesday.
The temporary lay-off scheme, which will kick off on Feb. 11
and last until the end of 2014, will allow Fiat to stop its two
production lines at the plant.
Melfi, one of Fiat's most important facilities in Italy,
currently makes the Punto model.
Government spending cuts and high unemployment have squeezed
consumer budgets and sent demand for cars plunging across Europe
where the industry already suffers from overcapacity.
Like other car makers, Fiat, which controls U.S. carmaker
Chrysler, has been hard hit by Europe's debt crisis. Last year
car sales in Italy slumped to their lowest level since 1979.
In a statement, a Fiat spokesman said the request had been
made so as "to continue producing the Punto on the basis of
market demand and make the investments needed for building two
Back in December, Fiat said it would invest 1 billion euros
($1.3 billion) to produce a new Jeep and a new Fiat 500 in Melfi
The economic spokesman for the centre-left Democratic Party,
currently ahead in opinion polls for February elections in
Italy, criticised Fiat's move, calling on the government to meet
with the company before approving any such scheme.
"The request for the special lay-off scheme is clear. The
impact on workers' salaries will also be clear and grave,"
Stafano Fassina said in a statement.
Raffaele Bonanni, leader of CISL, one of Italy's leading
trade unions, said it was normal to proceed in this way in cases
"We'll see if it's possible to avoid it ... in coming months
we will watch things to make sure Fiat keeps its promises," he
Pierluigi Bellini of Global Insight told Reuters new car
sales for 15 European states plus Switzerland are expected to
have fallen 15.8 percent in December from a year earlier.