Fiat may freeze investment in Italy over adverse ruling

Article by Anita Panait, on July 14, 2013

Fiat would freeze investments in new models until there is clarity over the impact of a court ruling declaring that a law barring a metalworkers' union from representing its workers was unconstitutional, Fiat chief executive Sergio Marchionne has disclosed. Italy's constitutional court issued a ruling last week that a clause in the country's labor law from the 1970s allowing Fiat to bar the Fiom union from representing its workers was unconstitutional.

Speaking to workers at Fiat's Sevelsud site in Italy, Marchionne said that before they could make "any further initiatives" in Italy, they need a clear legal and normative framework.

Marchionne remarked that he was open to a discussion with Fiom leader Maurizio Landini to discuss what measures could be taken, based on a common understanding that Fiat's labor contract in 2011 would not be revised.

Fiat has made investments in a number of its plants in Italy in exchange for concessions from its labor unions for more flexible work conditions. Fiat's investments are considered vital to the Italian economy, which has been suffering to recession for two years.

Fiat has vowed to invest billions of euros to produce Jeeps and Alfa Romeos for export to the United States and elsewhere in Italy. According to Marchionne, Fiat and sister company Fiat Industrial have placed EUR23.5 billion ($30.23 billion) in investment in Italy from 2004 to 2012. [source: Reuters]

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