Time is quickly running out for Fiat S.p.A. to prepare to launch the new Panda late next year as it continues to meet with unions to finally enter a deal that would rescue an Italian plant and secure a big investment by Fiat.
The latest meeting was last Friday. Fiat made an offer in December to transfer production of the next Panda, the best-selling minicar in Europe, to Pomigliano d'Arco, near Naples, for this model to remain competitive.
Fiat revealed that the switch from the Polish plant to Italy will need a 700 million euro ($843 million) investment in the Naples factory. But Fiat said that this will only come if its working practices are brought up to the level of its rivals.
The company said that it can't risk for the Panda, its key car, to be produced from an uncompetitive plant. CEO Sergio Marchionne said that the investments must be given soon or Fiat will be compelled to transfer the production of the new Panda somewhere else.
This investment is included in Fiat's plans to raise production in its home country by more than half to as much as 1 million vehicles a year in 2012.
Fiat is of course the major company in Italy's car industry, which accounts for 11.4% of an economy showing minimal signs of growth after the economic recession. To raise productivity, Fiat will switch to 18 shifts a week from 10 as well as schedule Saturday night work, cut break times, and limit downtime between shifts.
The unions have taken issue on Fiat's suggestion to disallow paid sick leaves and its assertion that objections to the agreement should be seen as disciplinary infringements and not strike action.
Unions claim that some of Fiat's demands violate labor laws or national employment contracts. What this means is that the government will get involved and this would delay a resolution even further. [via autonews]