Italy Minister Says Fiat Must Change Rescue Plan

As Fiat workers the length of Italy went on strike on Friday, European Affairs Minister Rocco Buttiglione said the embattled automaker should change its financial rescue plan to win government approval.

"We have to ask them if they can modify some aspects of the current plan, and we have to talk openly to the company to get these changes made," he told reporters after a cabinet meeting.

Once Europe's largest carmaker, Fiat Auto made an operating loss of 1.2 billion euros in the first nine months of 2002, dragging the energy-to-tractors group into the red. It now wants the government to rubber-stamp its plans to cut 8,100 jobs and mothball factories.

Blue-collar production workers would go on a temporary lay-off scheme that would be partly state-funded if the government agreed to grant Fiat "crisis status".

"There's a discussion about the industrial plan which must continue. The government has got to assume its responsibilities to the hilt, and be close to the workers," Buttiglione said.

Italy's top three unions stormed out of a meeting with Fiat management on Thursday and rejected the plan, arguing that thousands would see their temporary lay-offs become permanent.

In Turin, where Fiat has its headquarters, police estimated 10,000 workers had poured onto the streets to show their anger at the carmaker's plans.

"No to lay-offs. Zero layoffs," read one banner.

And in Sicily, where the local Fiat factory is threatened with closure, unions said at least 20,000 turned out to protest including wives and children of employees.

The government is putting particular pressure on Fiat to promise a future for the Termini Imerese plant in Sicily, one of Italy's poorest regions and the centre-right government's strongest voter base.