Italy is prepared to invest EUR450m (US$614m) to convert Fiat‘s Termini Imerese car plant in Sicily, industry minister Claudio Scajola has said.

Fiat wants to close the loss-making plant, which employs 1,400 workers, in 2011. It is ready to expand production at other Italian sites, including transferring production of the Panda model from Poland.

“The maintenance of jobs and saving the industrial presence in the region (of Sicily) cannot be ignored,” Scajola said in an address to the Senate, according to a Reuters report.

The minister said there were 14 proposals for converting the plant and he would favour those coming from the auto sector. Fiat unions have insisted the plant should remain dedicated to car production.

Public funds would be available for improving the infrastructure of the plant, Scajola added.

Fiat has said it costs between EUR800 and EUR1,000 more per unit to produce cars at Termini Imerese because of poor infrastructure.

Parts for the Lancia Ypsilon models assembled there have to be shipped in from factories on the Italian mainland.