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Fiat pondering closure of two Italian plants if North American initiative fails

Posted Feb 27th 2012 9:59AM

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Fiat spent much of 2011 jousting with Italian labor unions over contracts and plant security. The matter was finally resolved in December when Fiat signed new labor agreements, but a sign of Fiat's take on the matter was its departure from Confindustria, an Italian business group, over concerns that group labor agreements were crippling international competitiveness. Some recent comments by Fiat CEO Sergio Marchionne, though, seem to point the company back to loggerheads with labor.

According to a Reuters report, Marchionne said that Fiat might close two of its five Italian plants "if plans to export to the growing U.S. market don't materialize." The plans in question appear to be based on getting Alfa Romeo back to the N.A. market, but the only public news we've had about that is delays and upset dealers. The report didn't say when Marchionne was considering shutting down the plants, but with Alfa's N.A. return timed for next year at the earliest, it seems a bit early for Marchionne to turn into a crapehanger.

Indeed, the report has riled the head of Italy's largest metalworker's union, who called the comments "worrying," cited the failed attempts to get Alfa here and called plans for the brand "weak, overambitious and adventurous."

What's not in question, however, is that Marchionne has to figure out how to get more from Fiat's Italian operations. While Chrysler plants are at capacity, a Bloomberg report put Fiat's Italian factory utilization at 38 percent in the first three quarters of 2011, and said Italian workers produced 30 cars per year on average while Polish workers produced 100, before accounting for model and work disparities. Pinning hopes on Alfa's export possibilities to turn those numbers around strikes us as odd.

News Source: Reuters

Tip: Hat tip to Nate!

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