Milan: Fiat SpA, the Italy-based car manufacturer that introduced cars like the Ferrari, Maserati and the Alfa Romeo among others to the world, has, in the first half of 2002-03 incurred an operational loss of more than 800 million euros. Now, in a major move, Fiat is laying off 8,100 workers as part of a crisis plan designed to save the company.

The crisis plan released after detailed talks between the management and trade unions in Rome will give the company a “new boost to the profitability necessary for its development,” says the company.

Fiat says the workers will be sent home on protective redundancy from plants in Turin and Sicily beginning December 2002. Umberto Agnelli, head of the Agnelli family’s holding companies, which control Fiat Auto, says he is saddened about the proposed job cuts but says they are necessary.

He also makes it clear that it is unlikely that Europe’s once biggest carmaker would bring forward an option to sell out to General Motors (GM) from 2004. GM holds 20 per cent of Fiat Auto and the Italian company holds an option that could require GM to buy the remaining 80 per cent from 2004.

Fiat of Italy has a car empire spanning the globe and is also into a number of other businesses ranging from power to insurance and publishing. But in the past decade or so, competition from the Japanese, Korean and American carmakers as well as a recession in global markets has resulted in Fiat Auto recording a steady decline in sales.

Consolidation in China and India Other reports appearing in journals and notably in the newsmagazine Il Mondo say the Italian carmaker is planning a major recast of its international operations also. And in what could be good news for India, China, Brazil and Turkey, the company is planning to consolidate its operations in these countries. As a corollary to this, the company will drastically scale back operations in other countries.

Thus, it may sell or shut down plants in Morocco, South Africa, Egypt, Thailand and Pakistan. It also plans to keep output at minimal levels in Argentina and freeze investments in Russia for the present.

Fiat’s international arm that accounts for 24 per cent of group revenues is targeting to achieve an operating profit of 100 million euros by 2005.