Fiat, unions suspend talks on relaunch of carmaker's main plant

[NINETY EIGHT REGENCY]

Fiat, unions suspend talks on relaunch of carmaker's main plant

Staff

and Wire Reports December 3, 2010 14:16 CET

Fiat S.p.A. and unions have suspended talks over a plan to relaunch the group's main carmaking plant in Italy as a joint venture with Chrysler Group.

Fiat and Chrysler plan to invest more than 1 billion euros ($1.32 billion) into the Mirafiori factory in Turin to build top-range Alfa Romeo and Jeep SUVs for European and North American sales in exchange for more labor flexibility at the plant.

"The conditions are not there to reach an agreement on the relaunch of Mirafiori," a Fiat spokesman said on Friday.

Union representatives said unions were split, with some ready to sign the deal, some asking for more time and the left-leaning Fiom union openly against it. "We have reached a stalemate," said Bruno Vitali, who attended talks for the Fim Cisl union. "The key issue is the national contract, which Fiat does not intend to implement. They want to use an ad hoc contract."

U.S. exports

Fiat said last week it and Chrysler planned to build Alfa Romeo and Jeep models for global distribution as part of a new joint-venture company that will take control of the Mirafiori plant.

The plant would produce the mid-sized Giulia sedan and station wagon, which will replace Alfa's 159 range, as well as medium SUVs for the Alfa and Jeep brands.

The Alfa SUV will be aimed at the Audi Q5, BMW X3 and Mercedes-Benz GLK. The Jeep model will replace the Compass/Patriot model.

Output is scheduled to start in the third or fourth quarter of 2012. Half of the production will be sold in Europe and the other half will be exported, mainly to North America. The Alfa models are a crucial part of the brand's relaunch in North America.

Fiat acquired a 20 percent stake in Chrysler last year.

Fiat's and Chrysler's shareholding and investment in the Mirafiori project will mirror the output each expects to source from the plant, a Fiat spokesman said last week.

Fiat will cover about 60 percent of the cost, about 600 million euros, because it wants about 150,000 Alfa models a year. Chrysler will pay roughly 400 million euros to get an annual supply of about 100,000 units of the next-generation Jeep Compass/Patriot that is due to launch in 2013.

Opened in 1939, Mirafiori currently employs about 5,400 workers, who have seen production decline to a forecast 120,000 this year from 217,400 cars in 2006.

The factory produces the Fiat Idea, Multipla, and Punto Classic, the Lancia Musa and the Alfa MiTo. Next month Fiat will end production of the 1998-launched Multipla medium minivan and Punto Classic subcompact, which debuted in 1999.

Production of the Idea and Musa small minivans will continue until 2012, which is when production of their replacements is set to start in Serbia.

The MiTo subcompact, introduced in summer 2008, is included in Fiat's plans until 2014, but it is unclear whether a future model will be build at Mirafiori after the plant is retooled

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