Product design, quality, and culture - loyalty

“Fiat: We'd Be Better Off Without Italy
By Alessandra Rizzo, Associated Press Writer
Manufacturing.Net - October 25, 2010

ROME (AP) -- Fiat CEO Sergio Marchionne says the tradition-laden Italian automaker would be better off without Italy and its balky unions, provoking an angry reaction Monday from some labor and government officials.

Fiat has been in tense negotiations with unions over its plan to shut down a factory in Sicily next year. The company has also said it wanted to move back production of one of its models from Poland to Italy, but in exchange for labor concessions that one union rejected.

Fiat, which controls U.S.-based Chrysler LLC, has recently raised its 2010 forecasts, and Marchionne said that trading profit would be at least €2 billion. But of that profit, he said, "not one euro ... comes from Italy."

"We still have a loss," Marchionne said on a RAI state TV show Sunday night. "If we were to eliminate that Italian side from our results, Fiat would do more."

"One cannot forever manage operations that are at a loss," Marchionne said. "The majority of our competitors would have found the way out."

Marchionne cited poor labor efficiency but also blamed a system that he said had lost competitiveness over the years. He said Italy had been lagging behind in the past decade.

However, he also said one of his goals is to raise a worker's average salary -- about €1,200 ($1,600) monthly -- and bring it closer to that of European counterparts.

Some unions reacted angrily, saying Marchionne's real intention was to abandon Italy and outsource production.

Rocco Palombella of the metalworkers union Uilm urged Marchionne "to stop humiliating workers."

Guglielmo Epifani of the CGIL, Italy's largest union, was quoted as saying Monday that "Marchionne is very skeptical over the future of Fiat in Italy" and that "the truth is Marchionne wants to leave Italy."

CGIL has been the toughest in its opposition to Fiat. Its metalworkers' branch, FIOM, has rejected Fiat's plan to move production of its new Panda compact from Poland to a plant near Naples, saying that the labor concessions Fiat wanted amounted to eroding workers' rights.

Fiat said it would go ahead with the plan, which envisages a €700 million ($903 million) investment, despite the unresolved dispute with the union. But Marchionne has also said recently that the resistance to Fiat's plans has forced the automaker to slow its planned investments in Italy.”