Fiat's third-quarter earnings plummet

Fiat SpA's third-quarter earnings tumble a dramatic 49% compared to the year-ago period. The world's sixth largest automaker's net income fell to €160 million ($144 million) from €313 million ($284 million) in like-2000.

Fiat Auto SpA, Fiat's car division, reported an operating loss of €120 million ($108.4 million) during the quarter, while Fiat's farm vehicles unit, CNH Global NV, reported losses of €40 million ($36.4 million). Overall sales for Fiat fell 0.5% during the quarter to €12.5 billion ($11.3 billion). For the year's first nine months, however, Fiat says its overall sales for the group increased 1.6% to €43 billion ($39.1 billion).

The alliance between Fiat Auto and General Motors Corp. has helped to reduce Fiat's cost structure by €160 million ($145.6 million), in line with the previously announced €200 million ($182.1 million) savings target outlined for this year, the company reports.

Fiat says it will accelerate plans to reduce costs even further and reduce its cost structure by an additional 20% over previous goals in the next two years to maintain profitability going forward.

The company expects to miss its full-year profit target of €1.1 billion ($1 billion) before tax, interest and depreciation expenses. Fiat further expects fourth-quarter earnings to be negatively impacted by previously announced production cuts that are expected to idle 6,800 workers and reduce output by 100,000 units.