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Marchionne plays hardball in Italy

by Bill Cawthon on

A showdown is brewing in the wake of an Italian court’s ruling that certain portions of a 1970-era Italian labor law were unconstitutional. The court’s decision means that Fiat SpA cannot bar Fiom, one of Italy’s most militant labor unions, from representing workers in Fiat plants.

Fiom was the only major union that refused to sign new labor contracts that Fiat/Chrysler CEO Sergio Marchionne had demanded in return for a major investment program in Italy that would secure thousands of jobs.

As reported on Allpar yesterday, Marchionne spoke during the announcement of a five-year, $900 million joint investment by Fiat SpA and PSA Peugeot Citroen in the SevelSud plant in Atessa Val Di Sangro, in the Chieti province of eastern Italy, for the development of a new commercial van to replace the current Ducato which is also sold as the Peugeot Boxer and Citroen Jumper.

“We at Fiat are more than willing to meet Fiom, taking for granted that you can not renegotiate agreements already signed, in the hope that they too recognize that we can work together to revive the country,” Marchionne said.

Marchionne went on to say that Fiat must have a reliable regulatory framework and pointed out that the company has always complied with the law. However, he warned that without clear rules SevelSud could be “the last investment” by Fiat in Italy.

Marchionne pointed out that between 2004 and 2012 Fiat and Fiat Industrial had invested $30 billion in Italian production and added 15,000 jobs.

“We will not abandon any of the investments announced so far, but we cannot accept that a boycott of our commitment can be considered, even by the authorities, as a defense of rights.” This was a reference to the controversy that erupted last week when Laura Boldrini, president of the Italian Chamber of Deputies (equivalent to the U.S. House of Representatives) declined Marchionne’s invitation to attend the announcement at SevelSud, a snub widely seen as support for Fiom.

Later, back in Turin, Marchionne echoed comments made in 2011 in Brindisi by Fiat Chairman John Elkann when he told reporters: “The relaunch of Alfa Romeo will continue for sure. Italy should decide if they want it to happen in this environment or not as Fiat and Chrysler have several alternatives.”

Marchionne has given is no indication of where Alfa Romeo production might go. The Giulietta, Alfa’s best-selling model, is assembled in Cassino and the MiTo is built at the Mirafiori plant in Turn (the 159, though still on the market, was last produced in 2011 in the Pomigliano d’Arco plant that now builds the Fiat Panda). The Giulietta is built on the platform that was modified as the CUSW for the Dodge Dart, raising the possibility that it could be produced at the Belvidere Assembly Plant. The MiTo is related to the Fiat Punto and could be produced at Fiat’s plant in Betim, Brazil. The upcoming 4C will be built by Maserati in Modena, an arrangement unlikely to be changed.

Sources: Il Sole 24 Oro, Corriere della Sera

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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