Sills Cummis scoops US work on Fiat's US operation closure

The firm, which also has offices in New York and San Francisco, saw off competition from Chadbourne & Parke, Morgan Lewis & Bockius and Reed Smith to advise Fiat on day-to-day legal issues.

The move coincides with Fiat's decision to shut down its New York office. The company is in the throes of a restructuring, the details of which were announced in December 2001, when Fiat set out plans to close 18 plants and make E3bn (£2.04bn) worth of disposals.

Much of the company's problems involve its Fiat Auto division, which last year announced a E1.3bn (£882.4m) loss.

The company is now in talks with General Motors, which owns a 20 per cent stake in Fiat Auto, about widening its joint co-operation agreements in sharing inventories and other areas.

As a result of the New York closure, which is due for completion at the end of March, local general counsel Jim Kennedy will retire after three years with the company.

Scott Smith, a lawyer based in Fiat's central legal headquarters in Turin, said that the company undertook a review of its US advisers last year. The review concluded in retaining Sills Cummins because the firm offered lower rates than its competitors.

So far, Sills Cummins has been involved in acting for Caffaro, an affiliate of Fiat, on a mediation case involving a fertiliser plant in Colombia.

Smith said that the company would consider using alternative firms for future US projects. Fiat's head office is currently using US giant Cleary Gottlieb Steen & Hamilton for advice on its refinancing.