Fiat Confident In Management

MILAN, Feb 23 A Reuters story stated that Fiat's Honorary President Gianni Agnelli said on Saturday he had full confidence in the management of the Italian carmaker whose shares hit nine-year lows on Friday.

His comment came after a newspaper reported that Fiat's Chief Executive Officer Paolo Cantarella would resign at a board meeting scheduled for February 28.

``I can say that from my point of view -- and from that of our main shareholders -- there is total confidence in what (Fiat Chairman Paolo) Fresco and Cantarella are doing,'' Agnelli said in a statement given out at an industrial conference.

The Agnelli family's holding companies Ifi (IFPI-p.MI) and Ifil (IFLI.MI) are Fiat's main shareholders with 30.39 percent of voting capital.

``Fiat is going through a difficult economic period, mainly because of the strong competition in the auto business which is weighing on all carmakers,'' the statement said, according to ANSA news agency.

It added that Fiat's balance sheet had also been hit by a spate of acquisitions in the last four years.

The Turin-based company is due to report its 2001 results on Thursday. In December, Fiat forecast a group loss of about 800 million euros, the amount set aside for a restructuring plan it announced at the time.

Fiat says it expects to return to profit this year, but fears that its outlook and 2001 results might be worse than expected fuelled frenetic trade last week, thumping Fiat stock down to 14.052 euros by the end of Friday, the lowest since early 1993.

Il Quotidiano Nazionale, which is not one of Italy's mainstream newspapers, reported that Cantarella had decided to step down from Fiat after agreeing a resignation payment in the shape of a stake in one of Fiat's automation subsidiaries.

The paper said he would be replaced by a manager close to General Motors (GM.N), which took a 20 percent stake in Fiat's auto business in 2000 in exchange for a 5.7 percent stake in GM, now in the hands of Fiat's parent company.

Fiat has the option to sell GM the other 80 percent in 2004 but last week Fresco said it had no intention of doing so. Fiat Auto accounts for a little less than half total group revenue.