Italy Demands Details of Fiat’s Capacity Plans

The Italian government expects Fiat SpA to explain within the next few weeks whether it intends to continue investing in its domestic plants, Industry Minister Corrado Passera tells reporters.

Fiat has said it will unveil a new plan for its Italian factories when it reports third-quarter results in late October.

Politicians and union leaders have been demanding that Fiat clarify the future of those facilities since the company suspended fresh investments in Italy early this month. Fiat says it is reviewing future projects in light of Europe's slumping auto sales.

The delayed programs include the retooling of a car plant in Mirafiori, Italy, that was scheduled to begin making a crossover variant of the 500 city car in late 2013 and a replacement for Jeep's Compass small crossover in 2014.

CEO Sergio Marchionne has warned since February that Fiat might shutter two of its five Italian assembly plants unless they can make vehicles at competitive labor costs for export to the U.S.

The company's previous threats to freeze domestic investment won efficiency-boosting concessions from its unions last December. In exchange, Fiat pledged to invest €20 billion to modernize its Italian factories. But in June Fiat slashed 2012 capital spending in Europe by €500 million and delayed several vehicle launches, citing the region's shrinking car market.