Strikes cripple Fiat plants as company seeks gov't restructuring aid

Agence France Presse, Friday 11 October 2002, 9:54 PM

Strikes crippled Fiat plants across Italy in protest of a rescue plan by the country's largest private sector employer that includes massive layoffs and plant closures.

Thousands of Fiat workers, angered by the restructuring plan announced Wednesday, failed to show up for work at the factories of Fiat Auto and at other units, such as metalworking and machine tooling plants.

Flagship automaking division Fiat Auto, which is an industrial icon but a major drain on the group's resources, is bearing the brunt of the job reductions.

In an interview with Italian newspaper La Stampa, which is owned by the group, Fiat Auto chief executive Boschetti said “the plan will stay the way it is.”

Fiat announced on Wednesday 8,100 job reductions through temporary layoffs and early retirement. Fiat wants the 7,600 layoffs to be financed by a special long-term unemployment fund to which the government would contribute.

However, unions are up in arms against the action and the government has yet to reveal its position on the matter.

But Boschetti said the company only expects the government to let it “use the social benefits authorised by existing legislation.”

Unions were reporting strong participation in the strikes called to protest the measures, the latest in a wave aimed at reviving the Fiat Auto's lfagging fortunes.

“Even though it's too early to take a tally for this day of action, the level of particiapation is already very high”, a spokeswoman for the FIM union said around midday here.

Fiat's strike participation estimates were lower, ranging from 17 percent to 30 percent at various sites.

A spokeswoman for the FIOM union said that between 80 percent and 90 percent of the workers at the company's vast Mirafiori site at Turin, Fiat's hometown in northeastern Italy, had downed tools.

The union said 3,000 workers had assembled in front of gates of the site to protest the layoffs.

Fiat is desparate to turn around Fiat Auto which has been suffering from weak sales at home and abroad brought on by slumping consumer demand, a lack of new models with high margins, and the economic crisis in Latin America, where the company is deeply implanted.

Boschetti said the company was adjusting its production capacity on expectations that the overall automobile market would be the same in 2003 as in 2002 and would pick up significantly in 2004.

Boschetti said that for a long time Fiat Auto focused on volume to maintain its car market share, which weighed on its profitability.

He said that Fiat Auto had decided to limit car production and to “sell less to sell better” to improve its relationship with its customers.

Fiat Auto will invest 2.5 billion euros (2.46 billion dollars) per year in order to renew the group's car range in 2005, he added.

However, the prospect Fiat could rid itself of its problems at Fiat Auto by selling off the unit GM also looked increasingly likely following comments by Fiat chairman Paolo Fresco in the Wall Street Journal Europe.

He signalled the sale of Fiat Auto GM, which already owns a 20 percent stake, was on the books by describing negotiations with GM.

“We’re expecting very low value,” Fresco told the newspaper.

“I don’t think they will give us high value or that would hurt their bargaining position and give me strength to negotiate”.