Fiat to Suspend 14 Production Plants

Although it initially seemed like European manufacturers are less affected by the economic crisis, recent news reported that major companies such as Volvo, Volkswagen and Saab started experiencing very difficult times and were forced to impose a number of unprecedented cost-cutting measures. Although it was well-known the fact that Fiat's sales adopted a descending trend since the beginning of the crisis, it looks like things could get even worse for the Italian company.

Fiat today announced that it will shut down the majority of Italian production plants, with approximately 50,000 workers to be temporarily laid off. According to The Detroit News, no less than 14 of Fiat's 20 Italian plants will be closed through mid-January while 48,000 blue-collar workers of the 80,000 employees workforce will “benefit” from a longer holiday. The government will pay a part of these workers' salaries, the aforementioned source reported.

The Mirafiori factory, responsible for the production of Grande Punto and Alfa Romeo MiTo, will close its doors for two weeks, LefLaneNews informed while the Pomigliano d'Arco facility will become unavailable for one month. The Termini Imerese production plant will stop operations for three weeks, the same source added.

In case you were wondering, Fiat's sales were down 25 percent to 71,000 in November 2008, with the European market share slightly increased from 8.2 to 8.3 points. At this time, Fiat has a total workforce of 185,000 employees at 178 worldwide plants.

Fiat recently confirmed plans to merge with another European business that could help it remain in business, with PSA Peugeot Citroen likely to become the major partner. Although the two sides have already negotiated the deal, a decision is expected to be announced in the near future.