The Italian government has offered to help Fiat restructure following this week#;s announcement of 2,900 job cuts at Italian car plants and June#;s temporary lay-off of 10,000 staff, the Financial Times (FT) said.
The paper quoted prime minister Silvio Berlusconi as saying: “The government is willing to examine possible intervention so long as the measures do not violate the free market and equality among businessmen.”
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Berlusconi did not specify what aid the government could give, the FT said, but added that Fiat was Italy’s “most important private company”.
The FT said this week#;s job cuts are small by motor industry standards but Italy’s falling industrial competitiveness is causing concern. Fiat once employed over 200,000 people in Italy but restructuring plans, including moving production to countries with cheaper labour, has halved that, the newspaper added.
Analysts told the FT that the job cuts reflected excess capacity in Italy rather than rigid labour laws for which the country is often criticised.
“The temporary lay-off system for which the government pays much of the bill was created primarily for Fiat,” a senior banker told the Financial Times. “That’s Fiat’s problem. The government has protected it too much in the past against competition.”
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By GlobalDataThis week Fiat announced a 299 billion euro loss and said it would sell part of Ferrari through a stock market float. There has also been recent speculation that the car operations will be sold to General Motors.
