Fiat declines to give clues on new investments
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TURIN -- Fiat declined to give any details on its future investments because of the economic downturn and slumping car sales in Europe.
Fiat said after meeting unions in Turin it would provide information on products and plants with its third-quarter results in October.
"The international economic crisis and the difficulties in the European car market do not allow us to give indications on future investments for the time being," Fiat said in a statement on Wednesday.
It said that despite the crisis, investment at its Grugliasco plant in Italy had already started, with the Maserati Quattroporte prototype already in production there for launch at the end of this year.
Fiat also confirmed that preparatory work to produce a new Alfa Romeo model -- the 4C - at its factory in Modena was under way.
But the statement made no mention of plans for Mirafiori, Fiat's historic hub near Turin, where Fiat had announced plans to build a Jeep-badged SUV and an Alfa SUV.
It also did not refer to the Giulia sedan, the new Alfa to be launched in 2014 and a crucial project for the Fiat-Chrysler partnership.
The statement came a day after Fiat reported a second-quarter trading profit of 1 billion euros, bolstered by soaring sales at Chrysler.
Fiat CEO Sergio Marchionnne has said he will close a second Italian factory, after shuttering a plant in Sicily last year, unless he finds a way to export cars to the United States.
European auto sales are set to fall for a fifth straight year as high unemployment and the region's sovereign debt crisis causes consumers to hold back from making big ticket purchases. Fiat's first-half deliveries in Europe fell 17 percent.
Capital spending at Chrysler will rise to $4 billion this year from $3.1 billion in 2011, while Fiat is reducing European investment by 500 million euros in 2012.
"Delaying investments at Italian plants, with such a sales crisis and an unclear political situation in Europe, is a legitimate decision," Giuliano Noci, associate dean of the MIP business school at the Milan Polytechnic, said. "At the same time, Fiat needs to keep spending for new models especially in fast growing markets, such as China and Russia."
But Giorgio Airaudo, from the Fiom CGIL metalworkers' union, said: "If you don't invest in new products in Europe you keep down debt levels and boost liquidity, but you lose market share that you won't get back when the crisis ends."
Fiat said it is focused on temporary layoffs to reduce costs during the crisis as opposed to permanent job cuts. "Difficult conditions persist in the European auto market, particularly in Italy where demand is approaching the lowest level since 1979," the company said.
Reuters and Bloomberg contributed to this story
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