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Fiat Halts New Investment in Italy
Fiat SpA has again suspended fresh investments in Italy while it reviews future projects in light of the international economic crisis and Europe's struggling car market.
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Fiat SpA has again suspended fresh investments in Italy while it reviews future projects in light of the international economic crisis and Europe's struggling car market.
Fiat reiterates it will unveil a new plan for its Italian factories at the end of October when it reports third-quarter results. The company says it intends to complete investments under way at three Italian factories.
CEO Sergio Marchionne told labor leaders on Wednesday that Fiat will suspend a planned investment at its assembly plant in Mirafiori, according to Bloomberg News. The company previously said it would retool the factory to begin making a new Fiat model at the end of 2013 and a replacement for Jeep's Compass small crossover in 2014.
Fiat has engaged in a series of promises and threats to its Italian unions. In 2010 and again last year it threatened to halt further domestic investment unless workers agreed to boost efficiency. When unions accepted concessions in December, the company pledged to invest €20 billion ($25 million) to modernize its Italian plants.
But Marchionne warned in February that Fiat might close two of its five domestic assembly plants unless they can build vehicles at competitive labor costs for export to the U.S.
In June the company declared it was slashing capital spending in Europe this year by €500 million ($615 million) and delaying several vehicle launches. It is unclear whether those actions overlap the investment freeze just disclosed.
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