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Fiat’s €700m investment in doubt after ballot result

June 23, 2010

By Guy Dinmore in Naples, June 24, 2010

Fiat’s failure to win a convincing endorsement from workers voting on changes of work practices at its Pomigliano D’Arco plant near Naples raised doubts on Wednesday over whether the car maker would go ahead with its 700m euro investment plan.

According to results of Tuesday’s ballot reported by Italian media, 62 per cent of workers had voted in favour of the proposed accord while 36 per cent were against. Analysts said Fiat had sought a more convincing majority, with Corriere della Sera, a major daily, reporting that Fiat had hoped for some 80 per cent in favour.

A strong presence not in favour would make it “very difficult” for Fiat to go ahead with its proposed development plans for Pomigliano, a Fiat spokesman said. But he said Fiat still wanted to try to “save” the plant which has been almost idle for two years.

In a brief statement Fiat said that it would be impossible to find an agreement with Fiom, the main left-wing metal workers unions opposed to the proposals. However it said it would hold talks with the other unions that had accepted management’s demands as a condition for transferring production from Poland of the Panda model.

The ballot of Pomigliano’s 5,300 workers was seen by the government, industrialists and trade unions as a test case of whether powerful individual companies would be able at a local level to push through more advantageous work contracts that would be seen as a benchmark for future practices nationwide.

Sergio Marchionne, chief executive who has led Fiat’s turnaround and wants to double car production in Italy over the next five years, has repeatedly expressed his frustration at dealing with the country’s splintered labour movement.

Fiom said Fiat’s demands, which included restrictions on workers’ right to strike and would impose sanctions for what it regarded as unjustifiable levels of absenteeism, broke existing national labour agreements and were in breach of the constitution. Fiom made clear ahead of the vote that regardless of the result it would not accept the accord reached by Fiat and the other unions.

Fiom’s hardline stance has also caused divisions inside Cgil, the main left-wing labour federation it belongs to.

The Fiat spokesman suggested that Fiat could have an alternative plan for Pomigliano, involving “other projects” which he did not specify. Unions fear what they call “plan c” which would mean closing down the plant and reopening with a reduced workforce but not production of the Panda.

Raffaele Bonanni, leader of the Cisl trade union federation which had accepted Fiat’s demands, said it would be unthinkable for Mr Marchionne to go back on his commitment to transfer the Panda to Pomigliano, with an annual output target of 270,000 cars.His view was backed by Maurizio Sacconi, minister for welfare who has been negotiating the future of Pomigliano and the parallel closure of Fiat’s Termini Imerese plant in Sicily.

As Pomigliano’s future hangs in the balance, industrialists are urging Fiom to accept Mr Marchionne’s demand and reverse what some have called the historic trend of outsourcing production abroad.

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