Media from Associated Press to The Business Standard of India are abuzz with reports that Fiat (the company) is planning to cut 5000 jobs and will be spinning off its car division this summer. The stock market seems to like the idea: Fiat’s shares rose 4.15 percent.
The job cuts will affect the car division’s 30,000 employees. The Italian Newspaper La Repubblica [sub] reports that union sources believe that a further 2000 – 2500 workers will be made redundant at Fiat’s plant in Turin and another 500 will be laid off at Pomigliano. According to two analysts, what drove Fiat’s share price up weren’t the job cuts, but the rumour that they’ll spin off the car division sooner, rather than later. Does the market believe that the car division is a toxic element to the rest of the company? Well, any entity which is invested in Chrysler is probably going to be treated like a ginger-haired stepchild.
Fiat on the other hand isn’t in the mood to entertain La Repubblica’s story, dismissing the 5000 job losses as “absolutely premature and groundless.” Sergio Marchionne said “we are still working,” (well, at least they haven’t been fired) and that “it’s just speculation in the papers and whatever I might say would be incomplete.” Premature, maybe. But most premature babies tend to grow into screaming little monsters …
UPDATE: Reuters reports that
In the United States, where Fiat has taken a stake in struggling carmaker Chrysler, the Italian group would seek to produce seven models using the brands Fiat, Lancia and Alfa Romeo for a total production of more than 350,000 units.