Fiat CEO Sergio Marchionne has announced plans to stop production at one of the company's Italian plants.
Fiat will continue to produce its Lancia Ypsilon cars at the Termini Imerese plant in Sicily until 2011, but production will then switch away from cars after this date.
The plant employs 1400 people. It is not clear what production will switch to, but Fiat says it will not be connected to cars. In a statement, Fiat said it would keep 'an industrial presence' at the plant.
Unions are worried that Fiat’s promise to sell small cars for Chrysler in the US could lead to job cuts and factory closures in Italy, and the Termini Imerese news is likely to further fuel these fears.
Fiat will also introduce a new platform at its Pomigliano plant near Naples after production of the Alfa 147 and GT ends in 2010. The Alfa 159 and Sport Wagon models will continue to be produced there after this date.