TRIESTE, Italy -- Fiat should not count on the Italian government's aid to turn it around, Deputy Prime Minister Gianfranco Fini said on Tuesday, urging the carmaker to upgrade models to plug losses.
Fiat plans a five billion euros recapitalization for its cash-bleeding Fiat Auto unit and is still waiting to see whether General Motors of the U.S., which holds a 20 percent stake in the unit, would pick up its part of the bill.
A GM executive on Tuesday reiterated that the U.S. auto giant had no plans at this time to participate in the recapitalization plan.
Italian media have speculated in the past that the government may step in to rescue the 104-year-old carmaker, taking a stake in one of Italy's industrial symbols -- a move widely disapproved by investors and analysts.
"Me and (Prime Minister Silvio) Berlusconi have verified an unwritten rule that in times of profits (investors) come knocking on the government door for privitization, but in times of losses it's expected that someone else would pay," Fini told a meeting ahead of regional elections.
"We have replied to Fiat that they should sell the family jewels and make more appealing cars," Fini said. "We are for the policy of competition between the companies."
Fiat, whose group operating loss widened to 342 million euros in the first quarter, dragged by a 334 million euros loss at Fiat Auto, is closing sales of its most profitable units -- Fiat Avio and insurer Toro -- for about four billion euros.
Three credit rating agencies have cut Fiat's debt to "junk."
Last year, Fiat pledged to invest 2.5 billion euros a year on new and renovated models to reverse 2002's 11-percent sales slump. The firm has said the fleet of new models should pull its core car arm Fiat Auto and the group back to breakeven in 2004.
Fiat top managers have said that the carmaker would present a new business plan at the end of June focusing on innovation, cost control and customer care and aiming to boost efficiency without sacrificing jobs.