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Fiat Threatens to Transfer the Production of the Future Alfa Romeo Models Outside of Italy

Fiat could transfer future Alfa Romeo production outside of Italy, where local authorities will not clarify the impact of a court ruling on labor regulations, said the general manager of the auto corporation, Sergio Marchionne, according to Bloomberg.

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“The Alfa Romeo relaunch will certainly continue. Italy should decide if they would like this relaunching to take
place in the country or not, because Fiat and Chrysler have more options,” said Marchionne in Turin.

Last week, the Italian Constitutional Court has described as unconstitutional a provision in the labor code that allows Fiat to not consult the Fiom metalworkers union in negotiations with factory workers. Thus, part of the labor code was declared unconstitutional, calling into question the employment contracts from Fiat as well.

Fiat, which controls the U.S. Chrysler Group, is increasing the expensive models’ production in Europe, Maserati and Alfa Romeo, a strategy that hopes to bring profit to the tax affairs on the continent by 2016.

Fiat’s European operations recorded a loss last year of 700 million EUR.

Fiat needs “clear rules on which to fully rely” before investing in new projects in Italy, Marchionne said at the SevelSud factory where Fiat will invest over 700 million euros in partnership with the French PSA Peugeot Citroen group to build vans.

The Fiat CEO added that the group has frozen all new investments in Italy until the state clarifies the labor regulations, including the production of new models at the largest factory he owns, located in Turin.

Fiat is involved in a dispute with the Fiom union on labor market regulations, the company claiming a longer work schedule and shorter breaks.

Fiom argues that the measures are directed against the union and did not sign any agreement. Fiom is part of the largest trade union in Italy – Cgil.

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Fiat has trouble with the unions and in the U.S. as well. Marchionne said the Italian group is not close to an agreement with the trust for health insurance for retired employees operated by the United Auto Workers union. On the outcome of the negotiations depends the full takeover of Chrysler by Fiat. The Turin company currently holds 58.5% of the actions of the U.S. car manufacturer.

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