Transport Strike May Force Fiat to Close Plants image

The transport strike in Italy already forced Fiat SpA to cut production and take into consideration closing some plants temporarily.

The strike has been going on for 20 days now and it was started by heavy transport drivers who are against government austerity measures that have increased the price of fuel. This has lead to a 20, 000 units fall in production, creating “a strong impact on billing and auto registration in Italy and abroad,” Fiat said in a statement.

The company forecasts a 10% impact on March market share if drivers don’t resume work in the coming days. Among the plants Fiat plans to close temporarily is Pomigliano, where Fiat recently started production of the top-selling new Panda after signing a hard-won contract with unions for more flexible labor rules.

“The Italian automotive sector, already suffering strongly, is now being penalized again,” Fiat said. “It is very important that the situation revolves itself quickly.”

Closing any Fiat plants may easily become a political hot topic in Italy, since unions and politicians have expressed concern that Fiat’s alliance with U.S. automaker Chrysler was making it less committed to Italy. Fiat, including Fiat Industrial heavy equipment maker, is Italy’s largest industrial concern and employer.