Fiat Hints At Deeper Cost Cuts

Paris, September 25: | Updated: Sep 26 2002, 05:30am hrs
Carmaker Fiat signalled on Wednesday it was moving towards deeper cost reductions to deal with difficult market conditions that have saddled the firm with significant excess capacity. Fiat Auto Chief executive Giancarlo Boschetti would not ruleout further job cuts, saying the firm was struggling with excess capacity of 20 to 30 per cent while working to maintain its product investment spending.

If you reduce capacity by 20 per cent you can find money for investment. That is what we are doing, he told reporters at a conference ahead of the Paris Auto show.

Our cost structure is not ideal...we are in the midst of a massive cost reduction programme, Boschetti said.

Boschetti said the company was planning to spend some 2.4billion euros to 2.5 billion euros annually in developing new products.

When asked whether Fiat Auto would cut more employees he said, Who knows

Fiats major labour Union said last week that the company could cut up to 6,000 more jobs in Italy as it battles slow sales and high debts, with the axe falling as early as next month.

Between 5,000 and 6,000 more jobs will go. The only question is whether they will all come at once or bit by bit, like Chinese water torture, Giorgio Airaudo, head of metalworker Union CGIL-FIOM told on Thursday.

A cut of 6,000 jobs would represent nearly 15 per cent of the Italian workforce of Fiat Auto. The company, Italys largest private employer, cut 3,000 jobs in July.

Reuters