Marchionne: Fiat loses money with Italy

Fiat and Chrysler Group LLC Chief Executive Officer - Sergio Marchionne

One fact remains a thorn in the side of Sergio Marchionne; Fiat loses money in Italy. Of the 2 billion euro trading profit Fiat is anticipating for 2010, not a single share of it will come from Italy, where all of the company”s passenger-car plants operate at a loss.

“Fiat would do more if it took Italy out from its results. We cannot continue to manage operations at a loss forever,” Marchionne said.

To that effect, Marchionne pledged to invest 20 billion euros in Italy, but only if he sees more labor flexibility at his five Italian plants. Combined, the Italian plants do not match the productivity of the company”s single Polish plant.

Despite clashes with domestic unions, Marchionne has won the backing of workers to introduce landmark changes in the national labor contract, but one major union still opposes. Marchionne is proposing a number of changes, including a reduction in allotted time for breaks in exchange for greater compensation.

– By: Stephen Calogera

Source: Automotive News (Subscription Required)