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By Gianni Montani
TURIN, Italy, June 24 (Reuters) - A turnaround plan drawn up by Fiat sees a return to positive EBITDA only in 2006, the mayor of Turin said on Tuesday after examining the Italian industrial conglomerate's still secret blueprint for recovery.
"They are expecting to return to having positive EBITDA (earnings before interest, tax, depreciation and amortisation) in 2006," Sergio Chiamparino said after meeting Fiat Chief Executive Giuseppe Morchio at the firm's Turin headquarters.
"It is a serious plan which aims to restart the company and contains a strong commitment to investment," Chiamparino told reporters after he and other local officials met Morchio.
Morchio, appointed as Fiat's fourth CEO in a year in February, is due to announce his plan on Thursday.
It is expected to include job cuts -- reports have put the redundancies as high as 12,000 with the axe falling mostly outside Italy -- as well as a capital increase to raise about two billion euros.
In 2002, Fiat posted an EBITDA loss of 1.34 billion euros. After booking more than 3 billion euros of one-offs, the company's net loss gaped to a record 4.26 billion euros.
A Fiat spokesman declined to comment on the forecast mentioned by the mayor on Tuesday.
The last time Fiat sketched out a timeframe for a turnaround was in April when Chairman Umberto Agnelli said "2003 should see everything coming together so that in 2004 we should reach the turnaround we all hope for."
Arndt Ellinghorst, an auto sector analyst with bank West LB Panmure, said confirmation of the 2006 EBITDA target would worry investors just as they were likely to be asked to buy new shares as part of the rescue plan.
"Something has to happen before 2006 at the operating level. That's a very long time away," he said. "In this kind of market environment shareholders...are not going to give credit for that kind of time."
Fiat, once Europe's biggest carmaker, was forced to sell assets and lay off 15,000 workers last year as sales of its outdated models slumped and its car arm bled cash.
Morchio is due to unveil Fiat's latest rescue plan at 0830 GMT on Thursday. Then he flies to London to meet analysts and investors to drum up support for the expected capital increase.
Fiat is hoping a string of new cars will help it claw back market share which recently hit record lows. It is also waiting to see if partner General Motors Corp will contribute to a five billion-euro refinancing of its struggling car arm. (Additional reporting by William Schomberg in Milan)