MILAN (Bloomberg) -- Fiat Group will start building Maserati's first SUV, the Levante, at the Mirafiori factory in Turin, Italy, by the end of next year, unions said.
The carmaker will extend layoffs for 5,300 workers to retool the plant for the SUV, Fismic union leader Roberto Di Maulo said after meeting with CEO Sergio Marchionne in Rome.
Fiat will invest slightly less than 1 billion euros ($1.32 billion) at Mirafiori, Uilm union chief Eros Panicali said.
The Levante originally was slated for production at the Jefferson North assembly plant in Detroit, but Marchionne said early this year the vehicle would be built at Mirafiori.
In a statement, the automaker said it will "immediately" start investments at the factory in exchange for prolonged layoffs, without elaborating on the production plan.
Fiat, which closed a plant in Sicily in 2011, has focused on temporary layoffs rather than permanent job cuts in response to a six-year decline in the European car market.
In a bid to rehire all its Italian workers by 2016, Fiat plans to add upscale models from the Maserati and Alfa Romeo brands to fill capacity at under-used factories. Fiat will extend furloughs for workers at Mirafiori, the automaker's oldest and largest factory, for most of the next year while the retooling takes place after an existing agreement expires at the end of this month.
"The era of uncertainty over the future of Mirafiori is finally finished," Di Maulo said.
Bolstering Maserati's global appeal is key to Marchionne's effort to end losses in Europe, which totaled more than 700 million euros last year. Fiat is counting on overseas demand for higher-margin luxury cars to keep workers at under-used Italian factories busy. While investing in upscale models, Marchionne has scaled back spending on new mass-market models for Europe.
Fiat narrowed its first-half operating loss in the region by 48 percent to 185 million euros by cutting costs and reducing spending on developing new cars.
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