Fiat Unions Demand Clarification on No-Investment Plan

Italian politicians and union officials are asking the Italian government to press Fiat SpA for clarification about its suspension of all new investment in the country, Bloomberg News reports.

Fiat said earlier this week it was cutting investments in Europe by €500 million ($618 million) this year and suspending all new projects because of Europe's economic crisis and slumping auto market. The company insists it won't decide until late October which projects to revive.

Fiat sales across Europe fell nearly 17% in the first half of 2012. CEO Sergio Marchionne has been warning since February that the company might close two of its five Italian assembly plants unless they can make vehicles at competitive labor costs to export to the U.S.

Union leaders tells Bloomberg News the cutbacks will suspend a planned investment in Fiat's Mirafiori plant that was to prepare it to make a crossover variant of the 500 city car in late 2013 and a replacement for the Jeep Compass crossover in 2014.

Fiat says its cuts will not impact retooling programs already under way at its plant in Grugliasco (Maserati Quattroporte sedan), Modena (Alfa Romeo 4C sports car) and Pratola Serra (MultiJet engine).