Fiat has joined the list of auto-makers seeking tax-payer funded financial assistance. Just over a week after announcing a joint venture partnership with Chrysler, Fiat has approached the Italian government with its hands out.
As Italy?s largest private-sector employer, Fiat may have to scrap up to 60,000 jobs if the company isn?t granted financial aid. Negotiations between the Italian government, unions and Fiat are scheduled to start this week.
Falling sales on the back of the global financial crisis produced a 70 percent drop in forth-quarter profits for Fiat. Sales forecasts predict that demand for Fiat products will fall a further 20 percent in 2009.
But not all in the Government support additional assistance for Fiat. Cabinet Minister Roberto Calderoli told Italian TV there would "be a revolt" if the Government gave more tax-payer money to Fiat: "...you can't keep sharing the debt and keeping the profit," he said of the giant automaker.
Any request from Fiat for aid is now complicated by the tie-up with Chrysler and the USD$4 billion bridge loan to Chrysler from the US government. Both the Italian and US governments will reportedly take a cautious approach to any assistance granted by the other party when considering further financial assistance.