Unless there is more progress in the discussions with unions over labor rules, Fiat S.p.A. will pull out of the main industry federation in Italy, the company’s Chief Executive Officer Sergio Marchionne disclosed on Thursday.
Marchionne also runs U.S. carmaker Chrysler. The threat by Italy's biggest industrial group is the latest update in a struggle between the unions and Marchionne on the new labor contracts that the CEO has introduced at the company’s three plants in the country that will boost productivity and reduce absenteeism.
Employers' federation Confindustria agreed on a deal with Italy’s three main unions groups this week to create contracts signed at the company level binding if they win the backing of a majority of labor groups or workers.
However, the agreement is not retroactive. Also, it says that those contracts cannot drastically distance themselves from collective labor rules discussed between the unions and the federation, which is a setback for Fiat.
The company is also facing legal action from a radical union which rejected the new rules at its plants. Marchionne also disclosed that unless more progress was made to meet Fiat demands on flexible contracts, it would leave the employers' group from Jan. 1, 2012. He added that the company wants only people who can work in an environment “where everybody accepts their duties and responsibilities.”
Marchionne has created plans for a 20 billion euros investment in Fiat's loss-making Italian plants conditional on the labor unions giving full backing to the new contracts at the ex-Bertone, Mirafiori and Pomigliano factories. Moreover, he threatened to move production overseas unless the plants accept tougher labor rules on strikes, working hours and sick pay.