Thursday October 31st, 2002

Automaker Fiat said today its gross debt was 32.8 billion euros at the end of September, down slightly from debts of 32.9 billion euros at the end of June. The group released the details in a slide presentation to analysts, after reporting third-quarter results below analysts' expectations.

Fiat Chairman Paolo Fresco said the struggling carmaker is committed to carrying out a recovery plan and seeks no new partners.

"I think we are finally seeing some signs of a turnaround. There is no plan to find or accept new partners. This plan has been discussed with a number of interested parties," Fresco said during a conference call, following the presentation.

"We have the will and the resolve to carry out the recovery plan and we will go forward with it. Decisions will not be tainted by any sentimental attachment to any activity in our portfolio," Fresco added.

US General Motors Corp GM.N holds a 20 percent stake in the loss-making Fiat Auto division, which the group is struggling to turn around, and has an option to buy the remaining 80 percent from Fiat from 2004.

However, a source at Fiat said today a 2.5 billion euro recapitalisation of the strugging automaker will not require a contribution from General Motors. Rather, Fiat should save about 350 million euros ($345.5 million) by laying off a total of about 10,000 workers, according to Chief Executive Giancarlo Boschetti.

Fiat said it would lay off about 200-220 managers in the next few weeks. Earlier this month, Fiat announced plans to lay off 8,100 workers, mostly Fiat Auto workers and mainly via a one-year temporary layoff scheme. Earlier this year, Fiat laid off 3,000 workers, mostly blue-collar Fiat Auto workers.

Fiat also denied today press reports claiming Fresco would be resigning soon. "Press rumours about the supposed imminent resignation of Fiat Chairman Paolo Fresco are absolutely false," Fiat said in a statement.

Fiat said the rumours were part of a campaign to denigrate and destabilise the company, and to prevent it from executing a recovery plan.

Published at 16:34:09 GMT