The Italian government is considering a bailout for its own auto industry. The news comes as Fiat posted a 44% drop in revenue compared to 2007.
It looks like Prime Minister Silvio Berlusconi and the Italian government may come to the rescue of the ailing auto industry in that country. The news comes as the Fiat Group, Italy's largest automaker, posted 2008 revenues 44% worse than a year earlier. Fiat's last quarter was 19% worse than the 4th quarter of 2007.
Profit totals are also down significantly. The entire Group's net profit for the last three months of '08 equalled €180 million, down from nearly €600 a year earlier.
The prime minister would only confirm to reporters that government representatives would look at each business sector in a meeting next week, but he would not say who would attend those meetings. "There are some sectors that need an intervention, for example the auto sector, which is in steep decline," Berlusconi said.
This situation is hardly unique to Italy. In the European Union, Sweden has already granted a bailout to help the auto industry there, while France is considering a government-backed loan package of €5 to 6 billion. Berlusconi says he is in close contact with French President Nicolas Sarkozy about the issue.
Fiat, which also owns Alfa Romeo, Ferrari, Lancia, and Maserati, recently signed a non-binding deal with Chrysler LLC. If finalized, the no-cash deal would give Fiat 35% of the troubled American automaker, while Chrysler would get access to several cars in the Italian company's lineup. Chrysler desperately wants to put fuel efficient small cars, like the Fiat 500 and Alfa Romeo Mi.To, on the American market as consumers' tastes there may have changed due to recent surges in the price of gasoline.
Fiat is already carrying nearly €6 billion in debt.