Trade unions have given permission to Fiat to restructure the plant before starting production of new models under a special lay-off scheme at its Melfi plant in southern Italy. Union UGL confirmed the unions’ approval via a statement. This permits Fiat to proceed with its plan to stop two production lines at the plant beginning on Feb. 11.
The temporary lay-off scheme can stay in effect until the end of 2014. However, Fiat can resume production once the new lines are ready. After being in a meeting with Fiat, UGL's metalworkers regional secretary Giuseppe Giordano told Reuters that production may start either at the end of this year or early 2014. Fiat is waiting for the government to approve the plan. The euro zone debt crisis has had a huge impact on Fiat.
Last year, auto sales in Italy fell to its lowest level since 1979. The Punto model is built by Melfi, which Fiat considers to be one of its most important facilities. Fiat said last December that it will make an investment worth 1 billion euros ($1.3 billion) for the production of a new Jeep and a new Fiat 500X in Melfi from 2014.
This endeavour is part of a scheme by Fiat for its Italian factories to make Jeeps and other group brands to be exported and to make up for the decreasing demand in Italy. Fiat said on Jan. 15 that it aimed to continue making the Punto at Melfi depending on market demand while investing in the production of two new models. According to an industry insider, Melfi could begin production of prototypes early in 2014.