Fiat chief executive Sergio Marchionne's remarks that the car maker would be better off without Italy provoked outrage from labour and government leaders.
During an interview on RAI state television on a popular Sunday-evening talk show, Marchionne blamed rigid unions and labour law for its money-losing Italian operation.
"We still have a loss," Marchionne said. "If we were to eliminate that Italian side from our results, Fiat would do better."
Not one euro of Fiat's two billion euros of profit came from its Italian plants, Marchionne stated.
Marchionne last week said his company in 2010 would make at least 2 billion euros before taxes and one-time costs.
"One cannot forever manage operations that are at a loss. The majority of our competitors would have found the way out."
Union leader Palombella accused Marchionne of constantly humiliating its workforce in Italy.
"Continually saying that Fiat only makes a profit abroad is humiliating for the workers. They are offensive to those who are working on plans to make things that can say 'Manufactured in Italy'," said the general secretary of the UILM sheet metal workers union.
Guglielmo Epifani of the CGIL, Italy's largest union, said, "Marchionne is very sceptical over the future of Fiat in Italy. The truth is Marchionne wants to leave Italy."
Marchionne repeated claims that poor efficiency in Italy has caused the Turin-based company to lose competitiveness against rivals. He also said that if production could be ramped up he would give workers a pay hike.
Speaker of the low house of parliament Gianfranco Fini accused Marchionne of forgetting about the protection and state aid that the 111-year-old company has received from the Italian government.
"If Fiat is a huge corporation, it's thanks to the fact that the state propped it up for so long," Fini said.