New Fiat chief executive Alessandro Barberis has suggested that the struggling carmaker's painful restructuring plan agreed with creditor banks would continue. And in a markedly downbeat speech about the struggling carmaker's medium term future – he said signs of recovery would only come at the end of 2003.

Moving quickly to bolster staff confidence, he told Fiat managers that his appointment represented a “sign of continuity” – an apparent attempt to squash speculation that the group might veer away from its plan to cut costs and debts.

"We plan to respect the undertakings we have made with the banks, even if we must generate more cash in our business," he said.

This follows vociferous criticism by creditor banks of any move away from the agreed 3bn euro financing plan at last week's crucial board meeting at which Barberis's appointment was announced.