Italian Government Granting Fiat, Unions Assistance in 10 Days

January 29, 2009

We previously reported Fiat and Italian labor unions' warnings that without aid from the Italian government, up to 60,000 jobs are in jeopardy. Today the Italian government announces it will unveil a collection of measures in ten days to assist Italy's largest automaker as well as auto parts makers and suppliers. The assistance is designed to help them weather the global credit crisis.

CGIL (Italian General Confederation of Labor) union leader Guglielmo Epifani said that "the government has given itself 10 days" to respond to their and Fiat's' requests for assistance to weather decreased product demand.

Last Sunday, Reuters spoke of a "popular revolt" if the assistance for Fiat goes through. Roberto Calderoli, a conservative member of Prime Minister Berlusconi's cabinet, insisted that the government has already assisted Fiat multiple times and issued a strong warning as the Italian government weighed the possibility of providing assistance.

How quickly a lack of cash changes minds…only last November we reported that Fiat Group SpA CEO Sergio Marchionne voiced strong disapproval of U.S. government bailouts for the domestic auto industry.

[source: Detroit Free Press, CNBC via Reuters]

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