Berlusconi says he hopes Fiat’s plans to move some production to Serbia won’t harm Italy

Italian govt seeks roundtable on Fiat production

MILAN — Premier Silvio Berlusconi said Friday that Fiat can build cars where it sees fit, but his government still wants to have a roundtable talk with Italy’s largest manufacturer to discuss the announcement this week that it would produce new minivans in Serbia instead of Italy.

“In a free economy and a free country, an industrial group is free to locate its production where it sees fit,” Berlusconi told reporters at a news conference after meeting with Russian President Dmitry Medvedev. “I hope, however, that this doesn’t happen at the expense of Italy or of Fiat workers.”

Fiat CEO Sergio Marchionne said the decision to shift production to Serbia was necessary to guarantee smooth production of future rollouts as the company emerges from a painful industrywide crisis and attempts to build a larger global automaker with Chrysler Group LLC, which Fiat controls.

Labor Minister Maurizio Sacconi said he wants to meet with Fiat to discuss the plans, and the head of the Italian business lobby urged Fiat to avoid unnecessary conflicts.

Others were less measured, accusing Fiat of taking advantage of government incentives on cleaner burning engine technology to weather the crisis, and then moving jobs out of the country.

Marchionne had previously announced plans to increase production at Italy’s underutilized auto factories, as government officials and unions sought assurances that Fiat’s global ambitions wouldn’t penalize Italy.

Fiat earlier this month confirmed that it is going ahead with plans to invest euro700 million ($903 million) to move production of the next generation Panda from Poland to a plant near Naples, despite objections from one union to concessions it sought. But the battle over the Naples plant colored the Serbia decision.

Marchionne told analysts this week that Fiat’s plans involve more than euro20 billion in investments, and the automaker cannot afford labor issues hampering production.

Marchionne is moving ahead with a spinoff of Fiat’s industrial units into a separate company, in order to launch a global auto company including Chrysler. The spinoff is expected to be completed by Jan. 1.

(This version CORRECTS to euro20 billion in penultimate graf rather than euro1 billion.)