Fiat Closes Sicily Factory

Italian manufacturer Fiat said it will close the doors of its production plant in Palermo, Sicily in 2011 but the other domestic facilities won't be affected by the measure. According to a report by Autonews Europe, the facility will be officially phased out once the Lancia Ypsilon is discontinued in summer 2011 but, even so, the plant won't be entirely closed. It will still keep an "industrial presence with non-automotive production activities", the aforementioned source said.

This is the first Fiat plant closure that takes place after the Italian manufacturer completed the deal with Chrysler. What's interesting is that some Fiat workers expressed their concerns that Fiat might turn to this kind of measures after joining forces with Chrysler in a broader attempt to move production of certain models in the United States.

The Italian government and Fiat's board met today to discuss the way the Chrysler alliance influences Fiat's domestic operations, with local officials repeatedly asking Fiat not to affect its Italian operations, especially if the deal with Chrysler goes through.

"Prime Minister Silvio Berlusconi will preside over the meeting with the management of the company, unions and the president of the regions where the main manufacturing plants are located," Industry Minister Claudio Scajola said in a statement announcing the meeting.

Marchionne said in the past that joining forces with Chrysler won't affect Fiat's domestic plans but confirmed in a letter sent to employees of the American company that Fiat will supply some technologies to Chrysler.

"Over the next several months, we will begin the process of transferring Fiat's technology, platforms and powertrains for small- and medium-sized cars into Chrysler's manufacturing facilities. This award-winning technology will be critical to helping Chrysler round out its product line and give the company a strategic advantage in many markets around the world," he said.