Fiat Group CEO Sergio Marchionne has moved to cut costs at the company's Lingotto headquarters in Turin, axing a quarter of head office staff, as well as announcing the formation of a new 'Executive Council'.

The head office clear-out equates to fifty out of the two hundred staff, although it was not reported how many redundancies would be voluntary or redeployments.

Around twenty of these dissolved positions are from top management, a move with is expected to find favour with the entrenched unions who are at present vehemently opposing any widespread job cuts.

Sergio Marchionne, who became Group CEO on the 1st June following the abrupt departure of the previous incumbent Giuseppe Morchio, arrived with a reputation for getting the job done.

51-year-old Marchionne, who holds joint Italian-Canadian nationality, only recently finished introducing a new management structure within the core car division, which is now the main focus of the Group's restructuring plans. He aims to "foster the responsibility of individuals and facilitates rapid decision-making."

He also announced yesterday, the formation of a new 'Executive Council', which will harmonise all the Group's many diverse branches, while at the same time, bringing them under closer overall control.

The Executive Council will include representatives from cars (Fiat Auto), components (Magnetti Marelli), lorries, trucks and buses (Iveco), agricutural equipment and tractors (CNH Global), and sportscars (Ferrari-Maserati). It will also include representatives from areas such as purchasing, marketing and communications.
 

All council members will report directly to Marchionne, who sees it as "generating numerous benefits in terms of operating efficiency, resource management and cost-cutting."

Marchionne, who successfully returned Swiss certification and testing group SGS to profitability, prior to becoming Fiat CEO, is targeting "a profound change in mentality" within the Italian carmaker, changes he sees as permeating from top to bottom.

An example of ongoing efforts to 'internationalise' thinking on the shop floor has been the introduction of English language-only 'Hollywood' films, which are now being shown during breaks in factory canteens and recreation zones in an attempt to widen perspective.

Meanwhile speculation is still swirling around Herbert Demel's tenure as Auto Division CEO, after fresh Italian newspaper reports that he is on his way out.

These rumours have been fuelled by a recent whistle-stop tour of Europe by Marchionne and other Fiat top managers that failed to include the Austrian amongst it. Fiat themselves strenuously deny these claims.

Rumour is now rife that Martin Leach, the former Ford Europe CEO, and who is now holding the reigns at Maserati, could be brought into the Fiat Auto structure without replacing Demel, perhaps to take responsibility for product and marketing, areas he has acknowledged strengths in.