raton_laveur
Established member
This week's edition of The Economist has a story about this.
It starts by mentioning that Sergio Marchionne, Fiat's boss, has recently said that Fiat needs to make decisions rationally. Fiat has lost money in its home market for years as many Italian drivers have switched to other brands. The recent takeover of Chrysler has also cast doubt on Fiat's wanting to stay at home.
Actually, it's more than just the HQ that's at risk of leaving. Labor troubles and productivity problems have also made the company want to look elsewhere. Fiat's factories in Turkey, Serbia and Poland work at around 70% of capacity. In their Italian factories, the figure is around 33%. Intransigent unions and outdated work rules (workers can't be moved from one product line to an other as sales fluctuate). It could well be that production of all of Fiat's mass market cars will be shifted out of Italy if this doesn't get better. Considering that Fiat has nearly half of its employees and 40% of its plants in Italy, the company may find that pulling up its stakes and moving elsewhere has economic benefits that are too big to ignore. The fact that it's Italian plants are 15 to 20% less efficient than the competition also weighs on the decision.
Fiat had been working on a plan called Fabrrica Italia. If put into effect, Fiat would invest EUR 16 billion into its Italian plants over four years and Panda production would be moved to Italy. The other side of the coin is that Fiat is expecting major concessions from the unions on wages and working conditions at the same time. The Fiom-Cgil union is dead set against the agreement because they think Fiat will be developing more and more future models in the USA and reducing spending and jobs on this in Italy. Fiat has made some progress with the other unions of late, but not enough to convince it that staying in Italy is a viable long term possibility. This should get interesting.
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It starts by mentioning that Sergio Marchionne, Fiat's boss, has recently said that Fiat needs to make decisions rationally. Fiat has lost money in its home market for years as many Italian drivers have switched to other brands. The recent takeover of Chrysler has also cast doubt on Fiat's wanting to stay at home.
Actually, it's more than just the HQ that's at risk of leaving. Labor troubles and productivity problems have also made the company want to look elsewhere. Fiat's factories in Turkey, Serbia and Poland work at around 70% of capacity. In their Italian factories, the figure is around 33%. Intransigent unions and outdated work rules (workers can't be moved from one product line to an other as sales fluctuate). It could well be that production of all of Fiat's mass market cars will be shifted out of Italy if this doesn't get better. Considering that Fiat has nearly half of its employees and 40% of its plants in Italy, the company may find that pulling up its stakes and moving elsewhere has economic benefits that are too big to ignore. The fact that it's Italian plants are 15 to 20% less efficient than the competition also weighs on the decision.
Fiat had been working on a plan called Fabrrica Italia. If put into effect, Fiat would invest EUR 16 billion into its Italian plants over four years and Panda production would be moved to Italy. The other side of the coin is that Fiat is expecting major concessions from the unions on wages and working conditions at the same time. The Fiom-Cgil union is dead set against the agreement because they think Fiat will be developing more and more future models in the USA and reducing spending and jobs on this in Italy. Fiat has made some progress with the other unions of late, but not enough to convince it that staying in Italy is a viable long term possibility. This should get interesting.
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