(Releads with Berlusconi comments)
By Gianni Montani
TURIN, June 20 (Reuters) - Fiat is putting the finishing touches to an industrial plan that would slim down the automaker, sources said on Friday, even as Italy's prime minister said he expected domestic job cuts to be limited.
The plan, to be presented on June 26, is the latest in a series of attempts by what was once Europe's largest automaker to reverse widening losses and revive interest in its cars, which have lost market share even in the home market it long dominated.
Analysts have said they hoped the plan would tackle the company's excess capacity, but Italian job reductions will be limited to white-collar jobs, newspapers have reported, saying that factory workers will be spared after politicians and unions assailed another plan last year calling for thousands of cuts.
Italian Prime Minister Silvio Berlusconi said on Friday that job cuts in the industrial plan would be "much lower" than originally contemplated.
"The cuts are much lower than the first plan, and we think they can even be offset by new positions," Berlusconi told reporters on the sidelines of an EU summit in Greece.
Newspapers have reported that 8,000 to 10,000 Fiat workers outside Italy could lose their jobs. Fiat on Friday denied a magazine report that it would close a plant in India as part of the restructuring.
Fiat officials are still at work on the financial details of the plan, the sources said. Newspapers have reported the turnaround blueprint will call for a rights issue worth between two and three billion euros and cost cuts of 800 million euros.
GM ROLE UNDEFINED
"There are still a few working days before the board meeting which must examine the plan, and they will all be used," said one source.
The exact role of industrial partner General Motors in the turnaround has yet to be defined. Newspapers have reported that Fiat CEO Giuseppe Morchio is flying to the United States this weekend to present the plan to top executives at GM, which owns 20 percent of Fiat's auto unit.
Fiat sources would not confirm he was going to the United States, but several other sources said Morchio, named in February as Fiat's fourth CEO in a year, would make the trip.
Morchio has also been making the rounds of Italian government ministers and the industrial group's main creditor banks in recent days to show them the plan, the sources said.
"The meetings with various involved parties are continuing," said another source. "After the weekend, the final conclusions will be reached."
Fiat, whose shares have lost 45 percent over the past year, the European sector's worst performer, will also focus on improving profitability at truckmaker Iveco and U.S.-based farm-equipment maker CNH Global NV , the sources said.
The plan will also call for Fiat to retreat from unprofitable markets after a period of broadening its global reach, with the closure of some foreign headquarters, they said.