Fiat Denies North American Production Shift, Brand Consolidation

Yesterday's report that Fiat is consolidating brands and shifting production to North America is "premature and not based on fact," according to the automaker.

Italian newspaper la Repubblica reported that Fiat, which holds 20 percent of Chrysler, is moving production of 350,000 vehicles to North America; cutting a combined 5000 jobs from three Italian factories, which would represent roughly 16 percent of the automaker's workers there; boosting annual production in Italy by 50 percent to 900,000 units; and reducing its number of models from 12 to eight.

Fiat denies the report, saying it will outline its five-year plan on April 21. A Chrysler spokesperson would not comment on the paper's findings to the Detroit Free Press.

Currently, Fiat will close its Termini Imerese plant in Sicily at year's end, though CEO Sergio Marchionne said in December that Fiat would boost production to between 800,000 and 1 million vehicles annually by 2012. The automaker will produce as many as 130,000 units of the 500 minicar at a Chrysler plant in Toluca, Mexico, but a gap remains in Marchionne's projected production numbers.

Whether the U.S. looks viable as a production base falls on the value of the dollar, according to auto analyst Max Warburton. "Making cars in the U.S. versus Italy makes sense at current exchange rates, but is obviously a bet on an ongoing weak dollar," Warburton told the Detroit Free Press. "It could go very wrong if the dollar strengthens."

Source: Detroit Free Press

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