Fiat must change business model

Fiat CEO Sergio Marchionne told senior managers on Tuesday that the Italian carmaker must change its business model to survive. "We have to rethink the business model that we are used to," said Marchionne, who has also been the chief executive of Chrysler since Fiat took over the American company in 2009. He said Fiat has to look to the United States and elsewhere because Italy and Europe could no longer be considered its only end markets. Fiat has been badly hit by the recent slump in the European auto market. Marchionne admitted his work with Chrysler had created unease and concern that he was neglecting Fiat, but he reassured the Italian managers that he had not, and would not, abandon them. Unions fear Fiat may one day move its headquarters to the United States and scale down production in Italy after an eventual merger with Chrysler. "I've never stopped taking care of Fiat and I do not intend to," he said. The comments echo commitments Marchionne made to keep Fiat production in Italy after meeting Italian Premier Mario Monti on Saturday. The government called for the meeting after Fiat said it had revised its plans to invest around 20 billion euros in Italy in a five-year period because of the crisis of the European auto market. Trade unions and the main centre-left Democratic Party have said Fiat has not been sufficiently clear about its investment plans in Italy.