Fiat Vows to Remain Italian as Unions Strike

Fiat Chief Executive Gabriele Galateri said on Friday its struggling car unit Fiat Auto "is Italian and will remain Italian," and that the company would study an option to sell the division when the time came.

Fiat has the option to sell its 80 percent stake in Fiat Auto to General Motors Corp. in 2004. GM bought the other 20 percent in 2000 and is working on joint parts ventures with loss-making and debt-laden Fiat.

"We are working intensely with GM on the industrial plan," Galateri told TG1 news bulletin. "We will study the shareholding question when the time comes and according to the original deals."

None of the workers currently being laid off as part of a cost-cutting plan will be out of work forever, Galateri added. "Many of them will come back to work in the company ... and the rest will be paid towards retirement," he said.

Galateri's comments were published as Fiat workers continued to protest across Italy about imminent job cuts. Last-ditch talks with the government and Fiat to limit job cuts failed on Thursday, opening the way for Italy's top private employer to lay off 5,600 workers from Monday.

Analysts and unions say Fiat needs more than job cuts to cure its ills. But Galateri reiterated that the group was committed to cutting debt to three billion euros by the end of the year and confirmed the group expects to have consolidated operating losses of 600 million euros at the end of the year.

At the Bologna Motor Show in northern Italy today, Industry Minister Antonio Marzano said trade unions were not helping to resolve Fiat's problems by protesting over the government's proposals.

"We have heard too many Nos, and with Nos nothing is resolved," he told reporters.