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Thursday, 7 November, 2002, 16:34 GMT
Fiat Auto's losses set to soar
Workers block the Milan central station, Italy, protesting against job losses
Fiat workers protest against mass lay-offs
Italian car maker Fiat Auto expects to make a 2bn euros loss this year, a union official has told Reuters.

MIM metalworkers union representative Giorgio Capriolo told of the company's gloomy prediction following talks with both government and Fiat officials,

During the first nine months of this year, the car unit of the industrial giant Fiat made an operating loss of 1.2bn euros.

Mass redundancies and sharp cutbacks are due to shake the troubled car maker as it tries to sort out its finances.

No merger

The situation is desperate for Fiat Auto which is 80% owned by Fiat and 20% by the US car giant General Motors GM).

Fiat has an option to sell its stake in Fiat Auto to GM, and this has sparked rumours of a merger between the GM subsidiary Adam Opel of Germany and Fiat Auto.

But this has been denied by Opel chairman and managing director Carl-Peter Forster in an interview with Frankfurter Allgemeinse Zeitung.

"We cannot do anything with under-utilised Fiat plants," he said.

However, Mr Forster did compare the two brands, insisting that the Opel and Fiat brands would fit well together.

Angry workers

Fiat factories were hit on Wednesday afternoon by a two-day strike as disgruntled staff raised their voices against more than 11,000 job cuts by Fiat.

Fiat is the country's largest private sector employer, so its plans to lay off one in five of its car workers and close factories have been hugely unpopular.

In addition, the country's three leading unions have called a national strike for metalworkers on 15 November.

Market share

It seemed Fiat was clutching at straws.

Earlier this week, a member of the family that controls Fiat, Umberto Agnelli, pointed out that Fiat's market share in Italy has risen to 29.2% this October from 28.7% in September.

"Today we must acknowledge that from the month of September to October the registrations have improved. That is a positive fact," he said.

But a rising share of a rapidly shrinking market is rarely enough.

New car sales in Italy fell almost 4% in October when compared with a year earlier.

And although Fiat's sales rose when compared with the previous month, it was still down 21% when compared with a year earlier.

See also:

15 Oct 02 | Business
11 Oct 02 | Business
09 Oct 02 | Business
27 Jun 02 | Business
21 Jun 02 | Business
10 Jun 02 | Business
14 May 02 | Business
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