Fiat Industrial SpA : Italy's Iveco to Close Five Plants in Europe by Year End
07/01/2012| 03:48pm US/Eastern
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--Iveco to close five plants in Europe
--Iveco CEO sees European demand down 10% in 2012
(Updates to add cities where plants are to be closed, details.)
By Gilles Castonguay
TURIN, Italy--Italian truck maker Iveco plans to shut down five plants in Europe by the end of the year as it consolidates its manufacturing base to become more competitive in a region where demand for heavy vehicles has dropped as a result of the crisis.
Iveco Chief Executive Alfredo Altavilla announced the plans at a news conference held to showcase a new version of the Stralis heavy truck in this northwestern Italian city.
"About 1,075 workers will be affected," he said in responding to a question posed by a journalist.
The plants are located in Goerlitz, Germany and Graz, Austria; Chambery, France; and Ulm and Weisweil, Germany.
One of the results of its plan to consolidate its base is a EUR500 million investment in Spain, especially in Madrid, where it is revamping a plant where the Stralis will be made. For the year, Iveco forecasts demand for heavy trucks weighing more than 3.5 metric tons falling by 10% in western Europe.
Daimler AG (DDAIY, DAI.XE) expects the European truck market to reach last year's level, at best, in 2012, but added the market could also decline by up to 10% depending on economic developments.
In the first five months of the year, heavy-truck sales in the region fell 6.3%, according to the latest industry figures.
As regards other regions where Iveco operates, Altavilla said he expected demand in Latin America to fall 15% this year.
In China, where Iveco has a significant presence, demand for light commercial vehicles is seen by the truck maker dropping 5% and falling 30% for heavy trucks, he said.
Write to Gilles Castonguay at gilles.castonguay@dowjones.com
Corrections & Amplifications
This article was corrected at 1100 GMT July 2, because the country was misstated where the town of Goerlitz is located and misspelled the name of the town Weisweil as Weisweill in the fourth paragraph. Goerlitz is in Germany, not Austria.
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