The announcement from Fiat CEO Sergio Marchionne just over 48 hours ago, which came in the wake of the Fiat Group posting an unexpected second-quarter profit, has boiled over in Italy. Shifting production to Serbia would put a big dent in the proposed "Fabbrica Italia" plan under which Fiat has claimed that it intends to raise Italian car production to around one million units to counter claims that it is shifting assembly abroad.

This comes at a time of worsening relations between Fiat and its unions as threats hang over the future of some of its historic Italian plants. The Termini Imerese factory in Sicily, the smallest of its car production sites in Italy, will close next year when the current-generation Lancia Ypsilon ceases to be built, while the threat hanging over Alfa Romeo's underused Pomigliano d'Arco factory near Naples has only just receeded after Fiat announced this month that it would go ahead with a major 700 million euro investment despite more than a third of workers voting against a new labour package that came with plans to build the next-generation Panda at the beleaguered plant.

Yesterday Minister Sacconi weighed into the growing row over the production switch by asking Marchionne "not to act unilaterally" on the decision to build the car that will replace Lancia's Musa and Fiat's Multipla in Serbia. He stressed that there was an urgent need "for discussion with the union representatives on how the Italian sites should be used." Today the Minister announced that he will urgently convene a "round table" meeting between Fiat and its unions to analyse the "Fabbrica Italia" plan. The meeting, announced in a written statement, will take place at 10:00 a.m. on Wednesday July 28 in the offices of the Piedmont Regional Authority in Turin.