Fiat has decided to commit itself to complete the integration of the Pomigliano plant into the Fiat Group Automobiles manufacturing system.

Fiat has decided to commit itself to complete the integration of the Pomigliano plant into the Fiat Group Automobiles manufacturing system. This commitment will be realized through an important plan of technological investments worth a total of 70 million euros. These investments will be flanked by intensive training programs for employees and they are in addition to the other 40 million euros in extra costs stemming from the suspension of production necessary to realize the plan.

The objective is to bring this plant to best-in-class performance levels and ensure that it will be able to meet the conditions necessary for the allocation of production of new future models.

Normal working activities at the plant will be suspended for approximately two months (from January 7 to March 2, 2008) in order to proceed with a thorough overhaul of the production process in accordance with the World Class Manufacturing principles currently applied at all of the Group’s facilities. In the same period, employees will receive training. The Group will bear all costs of the temporary shutdown, including wages and associated social security contributions.

As regards the manufacturing process, the plant organization will be thoroughly rationalized, eliminating the trim shop and incorporating all vehicle prep areas in the final assembly line. Closure panel hemming, Alfa 159 body framing and all quality activities will be housed in a single building. In the next twelve to fifteen months, the Company will make investments aimed at boosting efficiency at the plant and improving workers’ safety and the facilities provided to them (dining areas, locker rooms, etc.). The work called for by the plan will be carried out by outside contractors, and is expected to involve over 900 contractor employees.

With this initiative, the Company underscores its strong determination to do everything possible, in organizational and financial terms, to guarantee that the plant can continue to exist, and continue to grow. At the same time, the contribution of all employees is absolutely essential to achieve our development objectives. The Company expects that in 2008, once the operation is completed, Pomigliano to have turned into a manufacturing plant which can go head to head with its best competitors.