Stellantis examining line closure at Italy's Melfi car plant

MILAN: Stellantis is studying a plan which would involve closing one of two production lines at its Melfi car plant in southern Italy, the head of the FIM CISL union told Reuters.

Jeep's Renegade and Compass models and the Fiat 500X compact SUV are produced at Melfi, which is considered the most efficient Stellantis plant in Italy, but could be moved to a single production line.

Closing a Melfi line could mark a first step by Chief Executive Carlos Tavares to tackle excess capacity in Italy.

The carmaker's production is under scrutiny in the country for costing more than elsewhere, as Stellantis seeks more than 5 billion euros ($5.9 billion) a year in savings.

FIM CISL's Ferdinando Uliano said on Thursday that the plan was being assessed, but Stellantis had not taken any decision on it, and the union had yet to receive official confirmation that such project was being considered.

Tavares had committed not to cut jobs or close plants following the creation of the company from the merger of Fiat Chrysler and France Peugeot maker PSA earlier this year.

"We're very worried," Uliano said. "Once you have reduced production capacity at one site, it's very difficult to gain it back".