Italian government slams Fiat for halting production

Jan 27, 2010, 10:24 GMT

Rome - Italy's Industry Minister Claudio Scajola joined labour unions Wednesday in criticizing car maker Fiat's decision to stop production at plant for two weeks next month due to poor sales figures.

The stoppage will effect some 30,000 Italian workers in six Fiat plants in Italy who during the period will be placed on reduced pay, partly subsidised by the Italian state.

Fiat's temporary shutdown, announced on Tuesday, and set to take effect on February 22, is 'not appropriate,' Scajola said, stressing that the move came as unemployment is a key issue in Italy.

The company's move comes 'during these very days that we are dealing with the delicate issue of Termini Imerese,' Scajola, said in an interview with news television channel SkyTG24.

Fiat Chief Executive Officer Sergio Marchionne, recently announced that the Turin-based company intends to permanently close its plant in Termini Imerese, Sicily by the end of 2011.

Prime Minister Silvio Berlusconi's conservative government has repeatedly urged Fiat to reconsider the move which - if implemented - could render some 1,600 workers jobless.

Fiat's decision on the country-wide temporary stop, 'could be interpreted by some as blackmail,' said the CISL labour union's General Secretary Raffaele Bonanni, referring to ongoing negotiations with the carmaker over the fate of Termini Imerese.

On Monday Fiat posted 2009 fourth quarter results showing a 26 per cent drop in earnings compared to the same period the previous year.

The company which builds Fiat, Alfa Romeo and Lancia branded vehicles, and controls US carmaker Chrysler, said trading profit (earnings before interest, taxes and one-time gains or costs) declined to 488 million euros (688 million dollars) from 663 million euros in 2008.

According to Fiat the results were better than those forecast by analysts, including an estimated group trading profit of 460 million euros for the fourth quarter.