Fiat 'to speed up sell-offs'

Fiat may move some car production to eastern Europe

LONDON, England (CNN) -- Fiat plans to accelerate the sale of business and restructuring to save 4.5 billion euros ($4 billion) over the next three years, according to reports.

The revised plan of Italy's largest industrial group goes further than the overhaul announced last December and could involve additional cost-cutting in the range of 700 billion euros to 1 billion euros, the Financial Times reported.

Fiat, which makes cars and construction equipment, may move some car assembly operations from Italy to cheaper plants in Poland and Turkey.

Chairman Paolo Fresco told the Financial Times the moves would address continuing losses in the core Fiat Auto division and the group's 6.5 billion euro debt burden. He said the losses would not force the company to sell Fiat Auto.

"The results have come short of expectations,'' Fresco said. "The strategy does not change but more needs to be done to the execution.''

Fiat's board is to discuss the proposals later this month, before the company's annual meeting in Turin. The company may report pretax losses of more than 300 million euros for the first quarter later this month, the FT said.

Under its revised plans, Fiat is understood to have increased savings targets from 800 million euros to 1.1 billion euros this year, with further reductions of 1.4 billion euros and 1.8 billion euros earmarked for 2003-04, the FT said.

The group has an agreement -- exercisable in 2004 -- to sell 80 percent of the division to General Motors, which paid $2.4 billion for an initial 20 percent stake two years ago.

"It is a contingency and no-one wants to use it,'' Fresco told the FT.

Fiat may consider floating a 40 percent stake of sports car manufacturer Ferrari, which could raise up to 800 million euros, and sell its toolmaker Comau.