Italian Minister Unsatisfied with Fiat Plants Idling

Fiat yesterday confirmed that all Italian manufacturing facilities will be closed for two weeks - the last week of February and the first one of March - in an effort to cope with decreasing demand and sales in its domestic market. This obviously leaves all the employees out of work, a measure that upsets industry minister Claudio Scajola who emphasizes that incentives would affect the auto sector on a long-term plan.

"It makes it more difficult," he told Reuters in a statement. "Incentives are a drug and long-term, they destabilise the market."

Fiat is going further with its plans to shut down the Sicily plant, with some voices familiar with the matter revealing that this could happen after 2011.

"We have decided to shut down a plant in Sicily. That decision is irreversible," said Sergio Marchionne, Fiat and Chrysler’s CEO.

"The reason, simply put, is that European manufacturers simply do not close plants. In fact, they're often paid not to," he continued, hinting that he disapproved of the government’s subsidies that “distorted” the European car market. "We are the largest industrial organization in Italy but we do not have the responsibility to govern the country," Marchionne said of Fiat. "The argument stops there," he said at the Automotive News World Congress.

In an effort meant to help Fiat deal with the Sicily closure, Marchionne is looking into ways to move Panda production to Pomigliano from Poland and increase Italian production capacity to around 1 million units in 2012.

For a more detailed description of Fiat's Italian plans, follow this link.