Fiat signs flexible contracts with workers

AP News
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Posted: Dec 13, 2011 6:05 PM
Fiat signs flexible contracts with workers

Fiat SpA reached new contract deals with unions on Tuesday that the automaker that controls Chrysler LLC says will help it remain globally competitive.

Fiat and Chrysler CEO Sergio Marchionne called the deal "a historic development for our company and its workers."

Marchionne, who joined Fiat in 2004, has made the more flexible work rules _ including additional shifts and shorter breaks _ conditional for future investments.

Fiat has said it would invest euro20 billion ($26.36 billion) to double production in Italy by 2014 _ although the pledge was made before the financial crisis took the bottom out of car sales in its main Italian market, and Fiat already has indicated some production delays.

"Today's result shows the major steps that can be taken when we work together and all work in the same direction and when there is a real shared intent," Marchionne said in a statement.

Similar deals had already been approved at three plants, including Fiat's Mirafiori factory in Turin, the company's hometown, and at a factory in Pomigliano, south of Naples, after rank-and-file workers approved more flexible rules the company insists are essential to boosting production. One union, which represents a minority of Fiat workers, refused to sign on to any of the deals, which means it is excluded from the bargaining mechanism.

The contract is an exception in Italy where labor agreements are generally set sector by sector, not company by company, or even plant by plant.

Fiat will present the first concrete result of the new investment on Wednesday when it rolls out the new Panda, its best-selling city car now made at Pomigliano, the first plant to sign on to the new work rules. Marchionne invested euro800 million to move production from Poland to Italy after workers signed on to his terms, guaranteeing nearly 5,000 jobs.

Fiat has sold 6 million of the small Pandas since it first began production in 1980, but it faces increased competition in the segment, including from Volkswagen which this year launched the Up! and Renault which updated the Twingo.

Marchionne is set on building a global automaker with Chrysler that can build 6 million cars a year, the scale he says is necessary in the increasingly crowded and competitive car market. The two car companies combined this year expect to build 4.2 million this year, to be the fifth largest automaker in the world.