Termini Imerese will be reassigned non-car manufacturing duties within the Fiat Group once production of the current-generation of Lancia Ypsilon (above) which is built there runs out in 2011.

There is no chance that there will be a reprieve for the closure-threatened Termini Imerese factory in Sicily according to Fiat CEO Sergio Marchionne, even if newly planned government investments in the area are brought into the equation. Last week it was revealed in the announcement of a new medium term industrial plan that the factory would be reassigned non-car manufacturing duties within the Fiat Group once production of the current-generation of Lancia Ypsilon which is built there runs out in 2011.

A change from car production after four decades, which has seen models including the Fiat 126, Panda and Punto built at the island factory, to other duties, is "a plan to be taken on" Marchionne said yesterday. Workers and unions fear that once car production ends it will spell a gradual run-down of the plant, and, just as they have done several times this decade already, they are gearing up for a fight for their survival.

Marchionne however was adamant that they won't change Fiat's plans, he added that: "we don't need to make a fuss about this. People react irrationally to some things: I have opened the way to interventions by us, by the regional and national governments, precisely to find a solution that would suit Sicily as well. What is impossible to imagine is keeping on this plant as a vehicle production asset considering that not the minimum level of allied industry has grown up around that plant".

He said that Termini Imerese "was conceived on another planet: there is nothing around it [and] it cannot be sustained. We don't press parts at Termini Imerese, the logistic costs are enormous." This week the Italian government has announced a 300 million euros aid package for the areas around Termini Imerese and Alfa Romeo's Pomigliano d'Arco factory near Naples which could also see its manufacturing scope reduced. However Marchionne sees this as making no difference to his decision: "It has no reason for being there," he added. In a further shrinking of the Fiat Group's established manufacturing base in Italy, it is also to close the CNH Global factory located at Imola within the next two years. However the other two Italian plants belonging to the Group's agricultural-and-construction equipment division will be unaffected. "Both that at San Mauro and the one at Lecce are not at risk of closure for the present," Marchionne stated yesterday, "because by reorganising the Imola production in these two plants we should assure their future."

Marchionne was also dismissive of the company's unions and the position they have taken in recent weeks. "Following the meeting at Palazzo Chigi, including one with the unions, I would advise them to take a more reasonable stance," he said of the negotiations held with the unions and the national government over future job security. "This is a market where I cannot create demand: I can fight; I can position the company, try to win market positions, but I cannot just dream up demand. If you can't shift the gear, all of the obstacles they place in front of me aren't helping the future of Fiat. These are vain victories," Marchionne said, before adding that: "I advise them to have a look around at the kind of world we're living in."