=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/05/06/f= inancial1105EDT0084.DTL --------------------------------------------------------------------- Thursday, May 6, 2004 (AP) Italian government proposes new management for Alitalia ALESSANDRA RIZZO, Associated Press Writer (05-06) 08:05 PDT ROME (AP) -- The Italian government on Thursday asked for the resignations of Alitalia's chief executive and its chairman and proposed to appoint the chief of the state railroad to lead the struggling airline -- the latest management shake-up aimed at rescuing the carrier. The proposed changes came amid eleventh-hour talks in Rome between government officials and union leaders on a strategy to save the state-run company. The ANSA news agency quoted Deputy Premier Gianfranco Fini as saying that Giancarlo Cimoli, who served until now as the CEO and chairman at the Italian railways, would be the new head of a slimmed-down Alitalia board of directors. The government reportedly wants to reduce the size of the company's nine-person board. Cimoli would occupy the positions of CEO and chairman, the reports said. Alitalia's current CEO, Marco Zanichelli, was named to the job in Februa= ry following clashes between the government and the previous chief executive, Francesco Mengozzi, over a restructuring plan and proposed job cuts. Alitalia chairman Giuseppe Bonomi was appointed last summer. The government, which owns 62 percent of the airline, is also reportedly proposing steps to help Alitalia through the current emergency. No details of the proposed industrial plan, emergency measures or the magnitude of a proposed capital increase -- aimed at drawing in private investment_ were immediately available. The new round of talks came after three straight days of meetings between management, the government and the unions failed to reach an agreement on a restructuring strategy. Top ministers held a meeting ahead of the talks with the unions. Trading in Alitalia shares have been suspended since Wednesday pending the outcome of the board meeting Thursday afternoon. Restructuring plans have called for thousands of layoffs in Alitalia's 21,000 work force. But the unions have said they are not willing to accept any job cuts and would only concede limited outsourcing. Last week, they staged a series of wildcat strikes that grounded 1,500 planes over several days, stranding thousands of passengers and plunging the airline into chaos. Before the strikes, Alitalia was estimated to be losing 50,000 euros ($60,000) an hour. The company last achieved an operating profit in 1998. The financial situation is so difficult that some government officials earlier this week raised the possibility of bankruptcy or receivership. Fini, who has been chairing the talks, denied receivership was an option, saying Wednesday that "Alitalia is in difficulty, but it's not bankrupt." The stakes are high for the government, which is eager to avoid the insolvency of a national symbol on the eve of important local and European elections next month. ---------------------------------------------------------------------- Copyright 2004 AP