Marchionne: Weak Exports to U.S. Could Force Closure of Two Fiat Plants

Since Fiat entered into an alliance with Chrysler, Marchionne has toughened working conditions for Fiat's operations in Italy, allowing factories to operate round the clock as they do in the United States.

Two Fiat auto factories in Italy might close owing to a weak eurozone market unless there is a rise in exports to the United States, Fiat Group Automobiles SpA CEO Sergio Marchionne said on Friday.

"The Fiat factories in Italy have the opportunity to export to the United States," Marchionne told the daily Corriere della Sera. "The weakening of the euro to the dollar helps, but the costs must be competitive."

Marchionne has been credited with turning around the Italian automaker from the brink of collapse and engineering an ambitious partnership with Chrysler after it was forced into bankruptcy during the global economic crisis.

"We have all we need to succeed in seizing the opportunity ... but if that doesn't happen we must pull out of two of the five current sites" in Italy, the Italian-Canadian CEO said without naming the factories affected.

Since Fiat entered into an alliance with Chrysler, Marchionne has toughened working conditions for Fiat's operations in Italy, allowing factories to operate round the clock as they do in the United States.

Fiat, which also owns luxury automakers Ferrari and Maserati, had to quit Italy's employers federation in order to do so, because it flouted longstanding collective bargaining arrangements.

The group, Italy's biggest private-sector employer, was a driver and symbol of the country's postwar economic boom.
The deal on new working conditions, signed by Fiat and all unions with the exception of the left-wing Fiom, also included increased overtime, reduced breaks and penalties for those who are absent without permission.

Workers at two of Fiat's five factories -- southern Pomigliano and the flagship Mirafiori factory in northern Turin -- approved the new conditions by referendum, and they were extended to the others at the start of the year.

Asked about the future of the alliance between Fiat and Chrysler, Marchionne noted three possibilities: the listing of Chrysler on the stock market; the acquisition by Fiat of 100% of Chrysler's capital; or a merger of the two groups.

The first is the "least likely," he said.

Last month, Marchionne told U.S. media that Chrysler and Fiat will merge into one company "not before 2013 and no later than 2015."

Fiat took over operational command of the U.S. automaker in June 2009, when Chrysler emerged from a government-supported bankruptcy. In June 2011, Fiat took a majority stake and now controls 58.5% of the company.

Copyright Agence France-Presse, 2012

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