Fiat Could Cut 550 More Jobs in Italy

Struggling industrial group Fiat could increase the number of job cuts in Italy by 550 as part of a sweeping plan to cut deep losses and high debt, a document released on Wednesday showed.

Fiat had already announced 2,887 mainly blue-collar job cuts in its home country, where it is the top private employer but where high labour costs are sucking on weakening revenues.

A document issued after Fiat met with unions on the proposed job cuts said 550 more jobs could go at Fiat's Power Train joint venture with General Motors Corp.

Fiat's problems are not just on the balance sheet, and the head of Italy's biggest metalworkers' union, Fiom-Cgil, refused to sign the job reduction plan, saying he lacked evidence Fiat's restructuring would do any more than cut costs.

"The plan is not credible. It will not pull Fiat out of the crisis. It is just a plan to cut jobs," Gianni Rinaldini told reporters after a two-day meeting with Fiat.

Other unions signed an agreement to put thousands of people on a "mobility" scheme, whereby redundant workers are paid part of their salary from social security for a period of time.

The Cgil union is Italy's most militant and has split with other groups at a wider level over controversial labour reforms. Fiat is searching every corner of its energy-to-insurance business for ways to cut costs and raise money to slash its debt, estimated at more than 30 billion euros.

As part of the plan, Fiat sold 34 percent of its Ferrari sports car group to a group of banks led by Milan's Mediobanca, which is reported to want to hive the top-end Alfa Romeo brand out of loss-making Fiat Auto and into Ferrari.

Fiat Auto, which also owns the Fiat and Lancia marques, has been dragging Fiat into deep losses and analysts expect it will be sold to GM in 2004 under a "put" option agreed when the U.S. giant bought a 20 percent stake in 2000.

Stripping out Alfa would likely infuriate GM but on Wednesday, a parliamentary commission looking into a crisis in the car market said it would be "the preferable solution."

In a draft document on its findings, the commission said "the continuation of the current ownership would be a guarantee of keeping an important industrial presence in our country."

Ferrari already owns the sleek and powerful Maserati brand and the commission document suggested all three brands would be joined together all the way from research to marketing.