Fiat is planning to extend temporary layoffs at its Mirafiori site in Turin, Italy, three people privy with the matter told Bloomberg. Fiat will ask around 5,300 workers at the site to stay home for most of 2014 after an existing labor agreement end at the end of September, according to Bloomberg’s sources.
The Italian carmaker has concentrated on temporary layoffs instead of permanent job cuts as part of its bid to counter the effects of the slumping demand for vehicles in Europe.
Fiat intends to rehire all its Italian workers by 2016, and to do that it plans to add upscale models from the Maserati and Alfa Romeo brands to fill unused capacity at its sites. However, Fiat’s plan to extend temporary layoffs – a move that could help it save costs and avoid overproduction -- could lead to further tension with unions, which already have expressed objections to chief executive Sergio Marchionne's plans to delay new investments in Italy.
Ferdinando Uliano, head of the Fim Cisl union, remarked that if Fiat wants to prolong layoffs at the Mirafiori site, the carmakers “must come with a final investment plan for the plant. Fiat’s management may meet with union leaders at the beginning of September to discuss the plan, according to Bloomberg’s sources.
According to the Fim Cisl union, the Italian carmaker produced 11,000 cars in the first half of 2013 in the Mirafiori site, which has an annual output of 300,000 cars. Fiat first implemented temporary layoffs at the site in April 2012 to retool it for new models. About 2,000 people work three days a month on average to produce the Alfa Romeo MiTo hatchback.