Fiat S.p.A. has plans to move production of the Panda from Poland to Italy but this might not push through if unions fail to agree on a productivity deal soon, according to CEO Sergio Marchionne.
If this plan is realized, the next generation of the Panda, Europe's best-selling small car, will be made in an underused factory in Pomigliano near Naples, Italy. For this project, Fiat intends to invest 700 million euros (about $862 million).
Already, planned investments have been delayed due to extended talks between management and unions on the topic of productivity at the Pomigliano plant.
Marchionne said last Friday that the company would be forced to consider alternatives if the parties fail to come up with an agreement "that offers adequate guarantees." Nonetheless, he is hopeful that a "rapid solution" would be arrived at soon.
In particular, Fiat wants to move Panda production to Pomigliano from its factory in Tychy, Poland. Production of the third-generation Panda is slated to begin in Pomigliano in the second half of next year.
When operating at full capacity, the plant is expected to produce between 270,000 and 280,000 units each year. Presently, the factory has an installed annual capacity of 240,000 but last year, only 36,000 units of Alfa Romeo's 159, GT and 147 cars were produced.