Fiat Will Close Siciliy Plant Despite Scrappage Scheme

Fiat is really keen on continuing its plans to close the Termini Imerese plant in Sicily and said, through the voice of its CEO Sergio Marchionne, that a local scrappage scheme won't save the production facility. Basically, Marchionne claims that a potential scrappage campaign would only help the auto sector on a short-term schedule, as buyers would hurry to purchase the cars they would normally acquire in the next years.

"Rather than a temporary stimulation of demand, what is needed now is a serious and committed industrial policy aimed at strengthening the competitiveness of the auto industry," he said according to just-auto.com.

He emphasized that he would support the Italian government in case local officials want to suspend the scrappage scheme.

"The government believes by extending the scrappage scheme in Italy, that that will [give] us an alternative to keep the Sicily plant open," a Fiat spokesman told the aforementioned source. "That is not the case."

Marchionne also stated that Fiat has the ability to handle the current economic environment from all point of views.

"In relation to the eco-incentives, I want to emphasize that we would fully support any decision by the Italian government not to renew them," Marchionne said. "As stated last week, when the Group communicated its official outlook for 2010, Fiat is capable of managing the situation from both a financial and industrial point of view, even under the most pessimistic scenario," he added when talking about Fiat's resources to cope with the economic environment.