💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

UPDATE 2-Fiat scores narrow win in key contract vote

Published 01/15/2011, 07:31 AM

* Landmark contract gets 54 percent support at Mirafiori plant

* Deal limits strikes, curb absenteeism

* Fiat promised to invest 1 billion euros if deal backed

(Adds Fiat comments)

By Francesca Piscioneri and Lisa Jucca

MILAN, Jan 15 (Reuters) - Carmaker Fiat SpA won narrow backing from its workers for a groundbreaking contract that limits strikes and absenteeism in exchange for investment in Italy, unions said on Saturday.

Workers in a referendum at Fiat's historic but loss-making Mirafiori factory in Turin voted 54 percent in favour of the new contract, a spokesman for the FIM union said.

Chief Executive Sergio Marchionne, who engineered the Italian carmaker's 25 percent stake in Chrysler and transformed Fiat from an ailing conglomerate, had threatened to deploy the cash abroad if workers rejected the changes.

The deal was approved by most unions at the plant but rejected by the left-wing Fiom. The deciding factor was support from white-collar workers, union spokesmen said.

"A 46 percent 'No' vote seems tremendous to me. To make good cars, you don't need conflicts of this type," Fiom Turin representative Giorio Airaudo told Reuters.

Fiat's top executives and Italian ministers said they were pleased with the outcome of the vote and hoped the deal would begin a new era in labour relations free of acrimony.

"Now we need to put controversies and contrasting positions behind us and face the challenges that we have before us in a constructive manner," Fiat Chairman John Elkann said in a statement.

UNPRECEDENTED OVERHAUL

The contract is part of a Fiat-led unprecedented overhaul of Italian labour relations, which have been based on national deals rather than on a plant-by-plant basis.

If workers accept the new contract, the company has pledged to invest 1 billion euros ($1.3 billion) to build new, high-end Alfa Romeo and Chrysler models at Mirafiori, Fiat's oldest plant and a symbol of Italian industry.

"Now the industrial plan for Mirafiori will go ahead. Marchionne has to quickly deploy the investment as he promised," FIM national secretary general Bruno Vitali told Reuters.

More than 96 percent of workers took part in the referendum on Thursday and Friday.

The contract has already been agreed at Pomigliano, another of Fiat's five Italian car factories, all of them loss-making. But support back then surpassed 60 percent of voters.

However, Fiat, Europe's No. 6 carmaker by market share and Italy's biggest industrial group, also needs the deal to work in order to safeguard sales in its home market.

The deal is part of a 20 billion euro "Fabbrica Italia" plan to double domestic production by 2014. It targets widespread absenteeism by curbing pay for those who take repeated sick leave around holidays and by ending wildcat strikes.

It cuts the number of breaks per eight-hour shift to three from four and raises the number of shifts to 18 a week from 15. Fiat can also call on each worker for 120 hours of overtime per year without union approval.

Mirafiori makes the Punto model and needs to roll out new models to survive.

Fiat's European sales fell 17 percent last year and its market share dropped to 7.6 percent from 8.7 percent in 2009. (Writing by Ian Simpson; Editing by Jon Hemming)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.