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Fiat wins key contract vote

2011-01-17 08:13

POWER GRAB: Employees stand in front of the Mirafiori Fiat plant in Turin on January 14, 2011. The 5500 workers will no longer have the standard national industry contract, judged to be too restrictive by Fiat.

MILAN, Italy- Carmaker Fiat SpA won narrow backing from its workers for a groundbreaking contract that limits strikes and absenteeism in exchange for investment in Italy, unions said.

Workers in a referendum at Fiat's historic but loss-making Mirafiori factory in Turin voted 54 percent in favour of the new contract, a spokesman for the FIM union said.

Chief executive Sergio Marchionne, who engineered the Italian carmaker's 25 percent stake in Chrysler and transformed Fiat from an ailing conglomerate, had threatened to deploy the cash abroad if workers rejected the changes.

The deal was approved by most unions at the plant but rejected by the left-wing Fiom. The deciding factor was support from white-collar workers, union spokesmen said.

"A 46 percent 'No' vote seems tremendous to me. To make good cars, you don't need conflicts of this type," Fiom Turin representative Giorio Airaudo told Reuters.

Fiat's top executives and Italian ministers said they were pleased with the outcome of the vote and hoped the deal would begin a new era in labour relations free of acrimony.

"Now we need to put controversies and contrasting positions behind us and face the challenges that we have before us in a constructive manner," Fiat chairman John Elkann said in a statement.


The contract is part of a Fiat-led unprecedented overhaul of Italian labour relations, which have been based on national deals rather than on a plant-by-plant basis.

If workers accept the new contract, the company has pledged to invest 1 billion euros to build new, high-end Alfa Romeo and Chrysler models at Mirafiori, Fiat's oldest plant and a symbol of Italian industry.

"Now the industrial plan for Mirafiori will go ahead. Marchionne has to quickly deploy the investment as he promised," FIM national secretary general Bruno Vitali told Reuters.

More than 96 percent of workers took part in the referendum on Thursday, January 13, and Friday, January 14, 2011.

The contract has already been agreed at Pomigliano, another of Fiat's five Italian car factories, all of them loss-making. But support back then surpassed 60 percent of voters.

However, Fiat, Europe's number six carmaker by market share and Italy's biggest industrial group, also needs the deal to work in order to safeguard sales in its home market.

The deal is part of a 20 billion euro "Fabbrica Italia" plan to double domestic production by 2014. It targets widespread absenteeism by curbing pay for those who take repeated sick leave around holidays and by ending wildcat strikes.

It cuts the number of breaks per eight-hour shift to three from four and raises the number of shifts to 18 a week from 15. Fiat can also call on each worker for 120 hours of overtime per year without union approval.

Mirafiori makes the Punto model and needs to roll out new models to survive.

Fiat's European sales fell 17 percent in 2010 and its market share dropped to 7.6 percent from 8.7 percent in 2009.

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