This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ THE DREAMERS - NOW PLAYING Set against the turbulent political backdrop of 1968 France when the voice of youth was reverberating around Europe, THE DREAMERS is a story of self-discovery as three students test each other to see just how far they will go. THE DREAMERS is released uncut with an NC-17 rating. Watch The Dreamers trailer at: http://www.thedreamers.com \----------------------------------------------------------/ State’s Stake in Alitalia Won’t Be Cut, Leader Says February 26, 2004 By ERIC SYLVERS MILAN, Feb. 25 -Prime Minister Silvio Berlusconi said on Wednesday that the government would not reduce its stake in Italy's ailing national carrier, Alitalia, jeopardizing the company's plans to enter the merger of Air France and KLM. Alitalia, which according to its chief executive loses 50,000 euros an hour, had been counting on the government's selling at least part of its 62 percent stake as a prelude to a combination with its French and Dutch partners. Air France and KLM announced late last year that they would merge, and left the door open for Alitalia to join them on condition that the Italian government reduce its holding significantly. "Not at the moment," Mr. Berlusconi said at a news conference in Rome when he was asked if the government would lower its stake in Alitalia. "A new managerial team is being considered." Francesco Mengozzi, chief executive of Alitalia, has said that he will leave his post if the restructuring plan he presented in December is not accepted by the government. He has also said that he would not amend the plan to meet conditions set by the government. Until Mr. Berlusconi's remarks Wednesday, the government had not commented on the plan. Italian news reports have said that Alitalia's general manager, Marco Zanichelli, would take over for Mr. Mengozzi. Mr. Zanichelli has been with Alitalia 15 years and has been general manager since April. He is close to Gianfranco Fini, the deputy prime minister. Mr. Fini also leads the second-biggest party in Mr. Berlusconi's coalition. Alitalia declined comment on Wednesday, except to confirm that a board meeting would be held Thursday. On Friday, Mr. Berlusconi will meet with his ministers to consider the outcome of the Alitalia board meeting. Alitalia has not been able to shed jobs and cut costs like many of its European and American rivals, leaving it unprepared to handle the worldwide decline in air travel that followed the Sept. 11, 2001, terrorist attacks in the United States. Alitalia lost 365 million euros in the first nine months of last year. The company has said its full-year loss for 2003 will top 400 million euros ($499.7 million). Those results are expected at the end of March. Air France and KLM also insisted that Alitalia overhaul itself and return to profit by shedding jobs and cutting expenses. Mr. Mengozzi's December presentation addressed those concerns, calling for layoffs of 1,500 employees over three years and another 1,200 job cuts as more services are outsourced. The payroll was to be further reduced by 300 people through attrition in the three years ending in 2006, leaving the company with about 18,500 employees, down from around 21,000 now. Air France and KLM wanted the Italian government to pare its stake so that a newly merged company would not be subject to the whims of electoral politics. Some analysts have attributed the government's reluctance to carry out Mr. Mengozzi's turnaround plan to Mr. Berlusconi's unwillingness to take the politically unpopular decision to lay off workers at the airline. On Wednesday, the prime minister blamed the center-left government that preceded him for Alitalia's problems. Italy will hold elections for the European Parliament in mid-June in what is seen as an important test of Mr. Berlusconi's political strength. It is unlikely that he will approve any plan before then that includes job cuts at Alitalia, an icon of Italian business. Every move to cut jobs at Alitalia has been met by strikes that have halted the airline's operations and led to further losses as flights are cut. http://www.nytimes.com/2004/02/26/business/worldbusiness/26alitalia.html?ex=1078808150&ei=1&en=05bfa8df54151094 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! 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