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Fiat Mirafiori newco to be outside Confindustria

CEO Marchionne says separate contract needed for Turin plant

10 December, 17:13
Fiat Mirafiori newco to be outside Confindustria (ANSA) - New York, December 10 - A new company that Fiat and Chrysler intend to create in order to produce new models at Fiat's main plant in Turin, Mirafiori, will not be part of Confindustria and thus will not have to abide by existing national contracts struck by the industrial employers association with unions, Fiat CEO Sergio Marchionne said here on Friday.

It is not clear, however, whether this would entail Fiat leaving Confindustria entirely, to then perhaps rejoin at a later date.

The decision to keep the newco outside Confindustria was later confirmed by the association's chairman, Emma Marcegaglia, who said the new joint venture would be "born outside Confindustria".

She added that once a new contract was hammered out with unions that met with Fiat's needs, the newco could then join Confindustria.

Fiat last week broke off negotiations with unions on the future of Mirafiori in response to their apparent refusal to agree to a new, ad hoc contract for the plant which was not tied to the national autoworkers' contract.

The Italian automaker has said it is ready to invest one billion euros in Mirafiori, where it wants to produce larger cars and SUVs for both the Jeep marque and Alfa Romeo using a new, common platform. The investment is part of Fiat's proposed 20-billion-euro plan for Italy that hinges on unions agreeing to individual factory accords.

The automaker maintains that separate contracts are needed to meet the individual conditions necessary to boost productivity at each of its plants.

Fiat has made it clear that without these accords with unions it would invest outside Italy, a move which observers say would distance Fiat from its native base.

The first new factory contract was recently struck for Fiat's Pomigliano d'Arco plant near Naples, where it plans to move production of its popular and best-selling Panda subcompact city car.

This contract broke a common front among unions with all agreeing except one, the left-wing FIOM which is affiliated with the CGIL, Italy's biggest union.

FIOM has also been the most resistant to an ad hoc contract for Mirafiori.

On the possibility of Fiat leaving Confindustria, one of FIOM leaders said "there is no such thing as temporarily abandoning contracted relations. You're either in a system our you're out".

In regard to the unions at Mirafiori, Marchionne said "the investment is ready but we cannot wait forever. I need these cars, they have to be on the market in 2012. The countdown has begun".

Without an accord for Mirafiori, he explained, "there will be no investment. There are many other factories and Fiat is a big group with 240,000 employees, less than a third of whom are in Italy". Marchionne added that it would be a "very, great shame" if no accord could be worked out for Mirafiori.

Fiat last year acquired management control of bankrupt Chrysler by offering its small-car and green technology in exchange for an initial 20% stake.

Fiat's alliance with Chrysler has allowed it to return to the American market after 26 years, with its popular 500 city car hitting showrooms next month.

This was the first benchmark which will enable Fiat to begin increasing its stake in the US automaker to 35%.

Other benchmarks include producing Chrysler vehicles, like Jeep, outside North America.

Fiat can boost its stake to over 50% when it meets other benchmarks, including repaying federal bailout loans.

photo: Fiat CEO Marchionne