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Talks start at Italian Fiat plant


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Talks start at Italian Fiat plant


Free Press Business Writer

Fiat and Chrysler CEO Sergio Marchionne is prepared to invest $1.32 billion in a 73-year-old Turin assembly plant to make a Jeep model and a larger Alfa Romeo car if Italian unions agree to cost-saving concessions.

Marchionne and Fiat made the proposal Friday as negotiations begin with unions representing about 5,800 workers at the company's Mirafiori factory in Turin.

In July, Marchionne riled union and Italian government officials by deciding to move production of all models now built at Mirafiori to a newer, lower-wage factory in Serbia.

Fiat spokesman Richard Gadeselli declined to say what work-rule changes or other cost cuts the company is demanding. Negotiations are expected to intensify in coming weeks, but there is no deadline to reach a new agreement, Gadeselli said.

But the Italian automaker has terminated its historic practice of negotiating one labor contract for all its Italian factories.

Earlier this year, Fiat formed a new entity called Fabbrica Italia to manage its Pomigliano d'Arco factory near Naples. It pushed for a new contract that restricted unions' right to strike and implemented measures designed to improve worker attendance.

In exchange, Marchionne agreed to produce the new Fiat Panda there beginning in mid-2011.

All but one of Fiat's unions accepted the Pomigliano d'Arco pact.

"We want to put him (Marchionne) to the test and see if there are negotiable issues because the Pomigliano deal doesn't work," FIOM Secretary Giorgio Airaudo told Reuters.

The new proposal for Mirafiori envisions annual production of between 250,000 and 280,000 "larger-segment passenger cars and SUVs for the Jeep and Alfa Romeo brands." More than half would be exported, most to North America.

To understand Mirafiori's productivity challenge, its 5,800 workers produced 178,000 vehicles in 2009 and considerably fewer this year, Gadeselli said. Chrysler's Jefferson North assembly plant can produce a comparable number of vehicles with 2,833 workers.

Earlier this month, Marchionne said Fiat and Chrysler were studying production of a luxury SUV based off the Jeep Grand Cherokee that would be sold as an Alfa Romeo or Maserati.

While a decision won't be made for at least a year, Marchionne said such a vehicle would be built in Detroit.

Read more: Talks start at Italian Fiat plant | freep.com | Detroit Free Press http://www.freep.com/article/20101127/BUSINESS01/11270354/Talks-start-at-Italian-Fiat-plant#ixzz16gMHQ3sP

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