You are here

Fiat cuts 12,000 jobs

26/06/2003 13:28
Fiat, the Italian industrial conglomerate, has unveiled a rescue plan aimed at reversing vast losses and regaining some of its former glory.
Chief executive Giuseppe Morchio said the group planned to cut 12,300 jobs by 2006 and close 12 factories in 2003 and 2004, most of them outside Italy.

The carmaker, one of Italy's biggest companies, also plans to invest 19.5bn euros ($22.3bn; £13.4bn) in new products and is preparing a 1.8bn euro rights issue, issuing new shares to raise funds for its restructuring.

But Fiat does not expect to report a net profit until 2006 as it recovers from record losses last year.

Moving on

Fiat, once a successful national icon, has blamed much of its woes on the struggling Fiat Auto division - maker of the Lancia, Alfa Romeo and Fiat brands.

It reported a net loss of 4.3bn euros for 2002 and the death of its legendary leader Gianni Agnelli in January sparked concerns over the company's future direction.

Mr Morchio said Fiat would now withdraw from certain markets, but said because of "the respect owed to certain people" he could not yet disclose which sites these would be.

Fiat will be strengthening its position in Brazil and China while some factories in Europe would close, Mr Morchio said.

He added that the long-awaited sale of its aviation unit Fiat Avio would go ahead this weekend.

Fiat agreed to sell Avio in April to the US private equity fund Carlyle and Italian defence group Finmeccanica in a deal worth 1.6bn euros ($1.8bn;£1.1bn), including debt.