Marchionne Wins Fiat Worker Concessions for Maserati Sedan
Fiat SpA (F) Chief Executive Officer Sergio Marchionne won concessions from workers in exchange for a 500 million-euro ($742 million) investment to make a new Maserati-brand luxury sedan at its plant in Grugliasco, Italy.
A program of increased work shifts and shorter breaks won approval from 88 percent of the 1,011 workers taking part in the ballot, the Fismic union said late yesterday. The workforce at the plant, which Fiat bought from bankrupt car-design company Bertone in 2009, totals about 1,100.
The labor agreement is the third in less than a year that Marchionne has reached as part of his strategy of raising productivity at Turin, Italy-based Fiat’s domestic plants. The program received a bigger majority vote at Grugliasco than at the other factories after Fiom, the carmaker’s largest union and the concessions’ main opponent, told the plants’ workers to approve the plan to preserve their jobs.
“Unions finally understood that it’s necessary to change the rules of the game to be competitive,” said Giuliano Noci, a professor at the MIP Management School of Milan’s polytechnic university. “This could become an iconic moment for the revamp of Fiat’s production in Italy.”
Fiat traded down 0.7 percent to 7.28 euros as of 1:15 p.m. in Milan, erasing earlier gains of as much as 1.8 percent. The stock has risen 8.7 percent this year, valuing the company at about 9 billion euros.
The capacity utilization of Fiat’s Italian plants was 37 percent in 2010, compared with 78 percent at its other European factories, according to a Jan. 27 presentation posted on Fiat’s website.
“We took important steps toward achieving the greatest operating flexibility possible for our plants and securing their future” with the new labor agreements in 2010, Marchionne told shareholders at Fiat’s annual meeting March 30 in Turin.
The carmaker’s 22,000 factory workers in Italy assembled 650,000 cars in 2009, compared with the 6,100 employees at its plant in Tychy, Poland, who built 600,000 vehicles. Without taking into account differences in models or working hours, that means productivity averaged 30 cars a year per Fiat employee in Italy, compared with almost 100 in Poland.
Fiat is the biggest manufacturer in Italy, where competitiveness has waned in the last decade compared with Europe’s other large economies. Productivity, a measure of employee output per hour, rose 0.5 percent in Italy from 2000 through 2008, lagging behind a gain exceeding 10 percent in Germany, according to the European Union’s statistics office.
Fiat, which owns 30 percent of Chrysler Group LLC and runs the U.S. automaker, said in February it wants to start building the full-sized Maserati at Grugliasco in December 2012.
The labor agreements at all three plants include measures to limit strikes, curtail absenteeism and operate the factories on a six-day workweek. Marchionne has threatened to move production abroad if employees don’t accept the new conditions.
“Marchionne highlighted a real issue, the productivity gap Italy has,” Noci said. “We have to consider which role the country should have in the Fiat and Chrysler group. I think Italy should aim to become the hub for developing new products, more than assembling cars.”
About 54 percent of workers at Fiat’s factory in Turin’s Mirafiori district approved the concessions in January in exchange for a 1 billion-euro investment. The program received 63 percent support in June from workers at Fiat’s plant in Pomigliano, near the southern city of Naples.
The Mirafiori plant is Fiat’s oldest while the Pomigliano site is the least productive of its established factories. The Grugliasco plant hasn’t been operating since Fiat acquired it.
Fiom, which represents about 10,000 of the carmaker’s 83,000 workers in Italy, sued Fiat in April at a court in Turin to challenge the labor agreement terms.
The union’s advice that employees at Grugliasco vote in favor of the concessions, even as Fiom still opposes the program, was “an act of legitimate defense of the workers,” said Maurizio Landini, the union’s chief.
“They were under a dual blackmail, as Fiat was threatening to halt the investment and give back the plant to the bankruptcy administrator, which would have meant firing all the workers,” Landini said
Fiom has called a general strike for May 6 to protest “Marchionne’s authoritarian model.” The union’s lawsuit against Fiat is part of an effort to nullify the carmaker’s move to create new companies to manage factories. Fiom says the strategy is anti-labor.
Fiat returned to profit in 2010, posting net income of 520 million euros compared with a year-earlier loss of 838 million euros. Marchionne has said repeatedly that Fiat’s Italian operations didn’t contribute anything to profit. At the same time, the manufacturer has a budget to invest 20 billion euros in its home country, which remains its biggest market.
To contact the reporter on this story: Tommaso Ebhardt in Milan at email@example.com