Italy has earmarked €300 million ($418 million) to help areas around Fiat's Pomigliano and Termini Imerese plants, where the company is cutting back or changing car output, a cabinet official said.
Fiat, which has agreed to take a 20% stake in Chrysler and seeks to bring the US car maker back to health, said last week it would halt car output at Termini Imerese in Sicily in 2011 and produce something else.
At Pomigliano, near Naples, it will produce new models on a new platform around 2010.
The funds will be provided by the economic planning committee CIPE, Cabinet Undersecretary Gianfranco Micciche told reporters on Friday.
Fiat Chief Executive Sergio Marchionne called on the government and unions to back its efforts to maintain jobs while cutting output in the country after a meeting on June 18 in Rome.
At that time, the government said there would be investment partly from the state and partly from private players for the areas. (Reuters)