Fiat (FIA.MI) plans to stop car production at one Italian plant and change to a new platform at another, its CEO told government and unions at a meeting on the impact of its deal to steer Chrysler CBS.UL back to health.
Sergio Marchionne, who now also heads the U.S. car maker, told the meeting on Thursday that Fiat planned to continue producing its Lancia Ypsilon cars at the Termini Imerese plant in Sicily until 2011 but would then switch production from autos, a statement from the company said.
Fiat has taken a 20 percent stake in struggling Chrysler and has promised in return it will bring its small-car technology to the U.S. producer.
Unions in Italy have worried this could mean production and job cuts at plants in Italy after the changes at Termini Imerese were outlined in Fiat's blueprint for its failed bid for Opel, the European arm of General Motors (GMGMQ.PK).
Opel is in the process now of being sold to Canadian auto parts maker Magna (MGa.TO).
Prime Minister Silvio Berlusconi said on Thursday Rome was always willing to meet with Berlin on Fiat's offer for Opel, however.
Fiat also plans to introduce a new platform at its Pomigliano plant near Naples in southern Italy, the statement said. It will continue production of the Alfa 47 and GT there until 2010 and will maintain output of its Alfa 159 Berlina and sport wagon there beyond that date.
Fiat will keep producing cars at its other plants in Italy and hopes not to make any job cuts, Marchionne said, but that will depend on financial factors.
He made a plea for European incentives for less polluting cars in order to stimulate demand.
Marchionne also called on the Italian government and unions to lend their support to Fiat, and said if all parties worked together, we can avoid painful consequences and build something strong and long-lasting.