Fiat to stay in Italy thanks to US profits

Fiat will stay in Italy thanks to profits generated abroad, particularly in the United States, the chief executive said Tuesday amid rising angst that it may be preparing to shed jobs in Italy. "I am trying to profit from the recovery of the American market, exploit it to the maximum, to attain the financial security that would allow me to protect the presence of Fiat in Italy and in Europe at this dramatic moment," Sergio Marchionne told the daily La Repubblica. With collapsing sales and a highly-unionised workforce at home, there has been rising concern that the industrial powerhouse that has come to symbolise Italy's post-war economic boom may close factories and reorient its business to the foreign markets that are generating profits. "Fiat has accumulated losses of 700 million euros in Europe and is supporting these losses thanks to success in the United States and emerging countries," he said. Of the 3.5 billion euros ($4.6 billion) in operating profit Fiat expects this year, none of it will come from Italy, he added. Marchionne over the past few years has forged a partnership with once-troubled US giant Chrysler, which is now propping up Fiat's results, and Fiat plans to unveil a new strategic plan next month. Fiat's previous plan, announced in 2010, strongly committed the company to remain in Italy and forecast a total of 20 billion euros ($26 billion) in investment and production of 1.4 million vehicles there by 2014. Social Welfare Minister Elsa Fornero has said she has requested "urgent talks" with Marchionne and that Fiat has "a duty" to explain itself given its huge role as Italy's biggest private sector employer. Fiat employs a total of 197,000 people, including around 80,000 in Italy. But with car sales down in Italy by roughly 20 percent and union resistance and legal problems, Marchionne has warned on numerous occasions that the company could be forced to close a plant. He noted the Italian car market has shrunk over five years by 1.1 million units to less than 1.4 million, and defended not introducing new models in the current conditions. The Fiat chief said new models might have boosted sales by some 30,000 units but risked losing two billion euros in unrecovered investment.