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FIAT: how long is a coffee break?

May 5, 2010

by Guy Dinmore
published on May 5 2010

How long should a coffee break be? As Italy faces up to the challenge of remaining competitive on world markets, Fiat – which has set itself the extraordinary target of doubling production at its car plants in the country in the next five years – has made labour flexibility its priority.

Sergio Marchionne, chief executive, offers the prospect of investing €26bn in Italy by 2014 – two-thirds of the group’s planned worldwide investment plans – if unions and government agree to his demands.

Mr Marchionne put his thoughts on doing business in Italy in typically blunt manner while presenting his five-year plan in April. “I go home late at night, disgusted from what I see from the industrial relations standpoint,” he said. “You would be incredibly foolish if you didn’t think I had a Plan B. It’s not nice.”

Fiat’s demands for greater flexibility in responding to the peaks and troughs of market demand, meaning overtime when necessary, with government support for temporary laid-off workers, have met with mixed reactions from unions. The leftwing CGIL, Italy’s largest union federation, appears the least enthusiastic.
One issue is the length of a coffee break. Fiat workers currently have two breaks of 20 minutes each in an eight-hour shift. The group wants three breaks of 10 minutes each, plus the current 30 minute meal time.
Mr Marchionne, who is also running US carmaker Chrysler after rescuing it from bankruptcy last year, says American unions told him things that “cannot be repeated in polite company” but once a deal was made they stuck with it.
He warns Italian unions that, while he is not seeking to impose US-style practices, he wants a “clear commitment to change” as business in the country is not sustainable at present.
Last year, Fiat’s 22,000 car workers at five Italian plants produced 650,000 units. In Poland, by contrast, almost as many were made by only 6,100 workers at the Tychy plant and 9,400 at Brazil’s Betim factory made 730,000 units.
Whatever happens, Fiat insists it will go ahead with plans to close its Termini Imerese plant in Sicily next year. Production in Poland will be scaled back as the Panda line is moved to the near-idle Pomigliano D’Arco factory near Naples.
Fiat’s frustrations are borne out by the World Bank’s annual Ease of Doing Business survey, which ranked Italy 78 out of 183 countries, between Panama and Kiribati.

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