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Italy ready to invest €450 mln in Fiat plant

Italy is prepared to invest €450 million ($614 million) to convert Fiat SpA's (FIA.MI) Termini Imerese auto plant in Sicily, Industry Minister Claudio Scajola said.

Fiat wants to close the loss-making plant, which employs 1,400 workers, in 2011. It is ready to expand production at other Italian sites, including by transferring production of the Panda model from Poland.

“The maintenance of jobs and saving the industrial presence in the region (of Sicily) cannot be ignored,” Scajola said in an address to the Senate.

The minister said there were 14 proposals for converting the plant and he would favor those coming from the auto sector.

Public funds will be available for improving the infrastructure of the plant, he said.

Fiat has said it costs between €800 and €1,000 more per unit to produce cars at Termini Imerese because of poor infrastructure. (Reuters)