Marchionne calls for Marshall Plan in Italy

No plant closures, full employment in 3-4 years

Marchionne calls for Marshall Plan in Italy

(By Denis Greenan). Florence, June 13 - Fiat CEO Sergio Marchionne on Thursday called for a Marshall Plan similar to the postwar US aid programme that regenerated war-torn Europe to stoke Italian growth and foster modernization in the recession-hit and red-tape-strangled country. "We should bet on the future of Italy," declared Marchionne, who said that the eurozone's third-largest economy needs "a burst of pride, a collective effort, a sort of social pact - call it a 'Marshall Plan for Italy' or what you like. A plan for national cohesion, for economic recovery". Marchionne said the Italian government should adopt "a serious agenda of reforms" to help lift the economy out of its longest recession in more than 20 years. "Choose the five most important things, those that can truly influence the lives of people. Give yourselves 90 days to execute them and then move on to the next items," Marchionne advised, speaking from the sidelines of a Florence meeting of the Italian industry group Confindustria. High on Marchionne's own list would be slashing the tax burden, which is "unbearable for normal citizens" and to clear obstacles to "already partly aborted" labour reforms. As for Fiat, Marchionne reiterated that none of the Turin-based carmaker's Italian plants would be shut down. "The most rational choice would be to close one or two factories in Italy" in order to "tackle production overcapacity," admitted Marchionne. "We have instead said - and I repeat - that we will not close any plants in Italy. We have always managed our freedom with conscience," Marchionne added. Fiat's production plans in Italy should fully employ all workers within three to four years, Marchionne added. Chronic under-employment of a significant number of autoworkers has been a source of labour tension in recent years. Marchionne complained that Fiat continues to be misunderstood by the Italian public, claiming it continues to see the automaker through prejudices formed during the automaker's crisis in the early 2000s - as a maker of substandard quality vehicles and as a sponge of massive public subsidies. But Marchionne said Fiat has transformed since he took over in 2004, tackling dire straits by choosing to "become stronger" and "overcoming isolation" that "would have damaged" the company. The group's recent global mergers, with Chrysler in 2009 and with CNH this year, were motivated by necessity, he implied. "If it had remained the same Fiat of old, we would have taken the books into court (for bankruptcy proceedings) some time ago," explained Marchionne. "We have created work and well-being, and we continue to invest and believe in Italy," Marchionne added. The Italian-Canadian executive stressed the importance of talks for Fiat to acquire the remaining 41.5% stake in Chrysler from the United Auto Workers' (UAW) retiree health-care trust. Asked whether there was still maneuvering room in the negotiations, Marchionne said, "Of course. Otherwise we would no longer be at the table". The UAW retiree health-care trust, called VEBA, received a 41.5% stake in Chrysler as part of the Fiat-Chrysler merger deal in 2009, which rescued the ailing American automaker from bankruptcy. Analysts now value the stake at 3.5 to 4 billion US dollars, Forbes magazine reported at the end of April. Fiat already owns 58.5% of Chrysler. Marchionne added that a deal to refinance Chrysler's debt has yet to be reached, but that he expected those negotiations to be concluded "within a month".

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