Fiat to Lay Off Almost a Third of Plant Workers : Automobiles: The action reflects the start of a long-expected weakening in West European new car demand after years of record sales.

Fiat SPA, the Italian automotive and industrial group, is laying off close to a third of its Italian car production work force for up to four weeks to cut production and reduce bloated stocks in the face of falling domestic and international sales.

The layoffs will affect about 35,000 of the 117,000-strong Fiat Auto work force at five of the group’s nine car assembly plants in Italy.

The move is intended to cut output by 75,000 units by year-end and reduce excess stocks of more than 10,000 vehicles.

The layoffs are the most dramatic evidence to date of the start of the long-expected weakening in Western European new car demand after five consecutive years of record sales.

Fiat is being hardest hit among the big six car makers in Europe. Its share of the domestic Italian market dropped to 54.4% in the first six months from 58.1% a year ago.

Fiat, in second place in the European new car market behind the Volkswagen group of West Germany, has suffered an estimated fall of about 4.2% in its sales volume across Western Europe in the first seven months of the year, compared to a decline of only about 0.3% in the overall market.

Fiat’s trade unions reacted calmly to the planned layoffs, but called for more details. Workers’ representatives, however, called for urgent meetings of the unions.

In the first quarter, Fiat said it thought this year’s production would exceed the 2.3 million vehicles manufactured in 1989, but forecasts have been revised sharply downward after a steep fall in demand in the second quarter.

Sales of Fiat group cars, including Lancia, Alfa Romeo and Ferrari, in the Italian market had been “well below expectations,” said the company, with a decline in the first six months of this year to 740,000 units from 776,000 in the same period last year, despite a 1.8% rise in the overall market.