More on Testore from NY Times

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From NY Times, Dec. 11, 2001:

Fiat Auto Chief Resigns in Midst of a Revamping
By DANNY HAKIM
DETROIT, Dec. 10  Roberto Testore, the chief executive of Fiat Auto, resigned today as Fiat S.p.A. (news/quote), the parent company, announced a restructuring plan.

The restructuring by Fiat, the world's eighth-largest automaker in terms of vehicles sold, reflects the continued struggles of the global auto industry as economic conditions worsen. Fiat will close or overhaul 18 plants and lay off 6,000 workers worldwide by 2004 as part of the moves. 

The Italian auto giant is in a situation somewhat similar to the Ford Motor Company (news/quote). Ford and Fiat Auto have dismissed chief executives this year, and the two companies are expected to report annual net losses. Ford executives are also at work on a turnaround effort to return to profitability. 

The health of Fiat, by association, affects General Motors (news/quote), since G.M. owns a 20 percent stake in Fiat Auto and Fiat owns 5.6 percent of G.M. as part of a relationship that extends to sharing power-train and purchasing operations in Europe.

Mr. Testore will be replaced by Giancarlo Boschetti, the chief executive of Iveco, a trucking company owned by Fiat S.p.A. Fiat Auto includes the Fiat brand, in addition to Alfa Romeo and Lancia, a European luxury line. None of the three brands' vehicles are currently sold in the United States, though there are plans to bring back Alfa Romeo to the United States in 2005. Fiat S.p.A. also owns the Ferrari brand and Maserati as part of a separate operating unit. 

Fiat said its restructuring plan would result in a charge of 800 million euros this year ($712.6 million using current exchange rates).

Fiat Auto will be broken into four distinct operating groups, the company said, in an attempt to reinforce its various brands. Fiat also projects that divestments from noncore businesses will be worth more than $2.2 billion. Fiat also said it would close two United States plants operated by its CNH unit, which makes farming and other machinery. 

Fiat S.p.A.'s auto sales in Western Europe fell 4.6 percent through the first 10 months of the year, according to Ward's AutoInfoBank, a data service. The company is expected to lose about 56 cents a share this year, according to Morgan Stanley, and its net debt soared in the third quarter from roughly $6.2 billion to $8.4 billion.

Sonny 91 164S

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