Fiat’s recent alliance with Chrysler promises to give the Italian automaker a new foothold in the U.S. market, but trouble looks to be brewing in the company’s home market. Fiat and its union say that 60,000 jobs could be lost in Italy’s auto sector if the government doesn’t intervene.

Like the rest of the global auto market, Italy has been hit hard by a collapsing economy and an ever-tightening credit market. As such, the government will begin talks with the auto sector this week, according to The Detroit News.

Fiat’s profits tumbled 70 percent in the fourth quarter of 2008, with 2009 not looking any better. The Italian automaker expects demand to drop another 20 percent this year. Fiat’s deal with Chrysler should add some demand – as it will give Fiat access to the largest auto market in the world – but it remains to be seen if it will be enough to keep the automaker’s head above water without help from the Italian government.



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