According to sources familiar with the matter, Fiat SpA plans to extend temporary layoffs at its main Mirafiori auto factory in Italy amid slumping car demand in Europe and a dispute with unions over labor contracts.
Three people, who asked not to be identified before an official agreement said that About 5,300 workers at Fiat’s oldest and largest factory, which is located in its hometown of Turin, will be asked to stay home for most of the next year after an existing agreement expires at the end of September.Currently, about 2,000 people work three days a month on average to build the Alfa Romeo MiTo hatchback at the factory.
Fiat, which closed a plant in Sicily in 2011, has focused on temporary layoffs rather than permanent job cuts in response to a six-year decline in the European car market. In a bid to rehire all its Italian workers by 2016, Fiat plans to add upscale models from the Maserati and Alfa Romeo brands to fill capacity at under-used factories.
Fiat’s aim to extend the furloughs, which help the company save costs and avoid overproduction, could spark further tension with unions, which have objected to Chief Executive Officer Sergio Marchionne’s plans to delay promised new investments in Italy. The company’s management will probably meet with union leaders at the beginning of September to discuss the plan, the people said. Fiat representatives declined to comment.