By Gianni Montani
TURIN, Italy, July 28 (Reuters) - Fiat Chief Executive Sergio Marchionne threw down the gauntlet to Italy's powerful unions on Wednesday, saying without guarantees domestic plants would operate profitably the group would go elsewhere.
Speaking at a meeting with unions and local authorities over the future of its Italian plants, Marchionne said Fiat's 20 billion euro ($26 billion) investments in the country depended on reaching broad deals with workers to boost productivity.
'If the majority agree to go ahead with this project you can't have new obstacles every day,' Marchionne said.
Fiat's efforts to introduce more flexible working practices at a Naples plant have mushroomed into a national debate on labour laws, as the company prepares to meet unions on Thursday over the future of its Mirafiori factory in its Turin heartland.
The prospect of cuts in jobs and capacity at the site, Fiat's largest in Italy and employing some 5,800 workers, was raised last week when Marchionne said unexpectedly he planned to shift production of some models to Serbia from Mirafiori.
According to the text of his speech at Wednesday's meeting, Marchionne, who also heads the U.S.-based Chrysler group, said Italy was the only country where the Fiat group made a loss.
'We reaffirm the importance of our investment in the 'Fabbrica Italia' project but we want guarantees that the sites will be able to function,' he said, according to a source present at the talks.
'We are not making threats, but we are not prepared to put the survival of the company at risk,' he said.
Fiat is the major player in Italy's auto sector, which accounts for around 11.4 percent of the country's struggling economy.
FIAT WEIGHING ITALY PRESENCE?
The government has called on Fiat to maintain production at Mirafiori, saying Italy's future as an industrial centre was potentially at stake, but it has stopped short of offering concrete incentives to the company.
Marchionne said on Wednesday Fiat's presence in Italy was in the balance and raised the spectre of what the consequences would be if such a major player had to move parts of its production from Italy because factories were 'ungovernable.'
Fiat launched its 'Fabbrica Italia' project in December 2009 and it foresees increasing production in the country by more than half to as much as 1 million units in 2012.
But in return, Marchionne says he needs workers to commit to increased flexibility in working hours to meet fluctuations in demand and commitments to avoid excessive absenteeism.
It took six months to get 62 percent of workers at the Naples plant to support his plans.
Marchionne now wants to cement that deal by creating a new company to manage the plant and those workers who backed the changes in working conditions.
Unions who signed up to the innovative accord are now saying they do not want to break with national labour contracts -- something commentator and senior business figure Franco Debenedetti said on Wednesday was 'a contradiction'.
'The only reason to set up the new company is to avoid the national contract,' he said in business daily Il Sole 24 Ore .
Marchionne has now even raised the prospect of Fiat leaving Italy's business association Confindustria to free itself from national contracts. He met its leader, Emma Marcegaglia, on Wednesday after the labour meeting but said a deal was possible.
'Emma and I are convinced we can reach an agreement,' Marchionne said.
(Writing by James Mackenzie and Jo Winterbottom; editing by David Holmes and Elaine Hardcastle)
($1=.7698 Euro) Keywords: FIAT/ (Reuters Messaging james.mackenzie.reuters.com@reuters.net, Rome Newsroom +39 06 8522 4351; james.mackenzie@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TURIN, Italy, July 28 (Reuters) - Fiat Chief Executive Sergio Marchionne threw down the gauntlet to Italy's powerful unions on Wednesday, saying without guarantees domestic plants would operate profitably the group would go elsewhere.
Speaking at a meeting with unions and local authorities over the future of its Italian plants, Marchionne said Fiat's 20 billion euro ($26 billion) investments in the country depended on reaching broad deals with workers to boost productivity.
'If the majority agree to go ahead with this project you can't have new obstacles every day,' Marchionne said.
Fiat's efforts to introduce more flexible working practices at a Naples plant have mushroomed into a national debate on labour laws, as the company prepares to meet unions on Thursday over the future of its Mirafiori factory in its Turin heartland.
The prospect of cuts in jobs and capacity at the site, Fiat's largest in Italy and employing some 5,800 workers, was raised last week when Marchionne said unexpectedly he planned to shift production of some models to Serbia from Mirafiori.
According to the text of his speech at Wednesday's meeting, Marchionne, who also heads the U.S.-based Chrysler group, said Italy was the only country where the Fiat group made a loss.
'We reaffirm the importance of our investment in the 'Fabbrica Italia' project but we want guarantees that the sites will be able to function,' he said, according to a source present at the talks.
'We are not making threats, but we are not prepared to put the survival of the company at risk,' he said.
Fiat is the major player in Italy's auto sector, which accounts for around 11.4 percent of the country's struggling economy.
FIAT WEIGHING ITALY PRESENCE?
The government has called on Fiat to maintain production at Mirafiori, saying Italy's future as an industrial centre was potentially at stake, but it has stopped short of offering concrete incentives to the company.
Marchionne said on Wednesday Fiat's presence in Italy was in the balance and raised the spectre of what the consequences would be if such a major player had to move parts of its production from Italy because factories were 'ungovernable.'
Fiat launched its 'Fabbrica Italia' project in December 2009 and it foresees increasing production in the country by more than half to as much as 1 million units in 2012.
But in return, Marchionne says he needs workers to commit to increased flexibility in working hours to meet fluctuations in demand and commitments to avoid excessive absenteeism.
It took six months to get 62 percent of workers at the Naples plant to support his plans.
Marchionne now wants to cement that deal by creating a new company to manage the plant and those workers who backed the changes in working conditions.
Unions who signed up to the innovative accord are now saying they do not want to break with national labour contracts -- something commentator and senior business figure Franco Debenedetti said on Wednesday was 'a contradiction'.
'The only reason to set up the new company is to avoid the national contract,' he said in business daily Il Sole 24 Ore .
Marchionne has now even raised the prospect of Fiat leaving Italy's business association Confindustria to free itself from national contracts. He met its leader, Emma Marcegaglia, on Wednesday after the labour meeting but said a deal was possible.
'Emma and I are convinced we can reach an agreement,' Marchionne said.
(Writing by James Mackenzie and Jo Winterbottom; editing by David Holmes and Elaine Hardcastle)
($1=.7698 Euro) Keywords: FIAT/ (Reuters Messaging james.mackenzie.reuters.com@reuters.net, Rome Newsroom +39 06 8522 4351; james.mackenzie@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.