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Fiat to start layoffs procedure
Rome, Dec 05: Italy`s crisis-hit Fiat will launch a temporary layoff program on Thursday, signalling its determination to push through a do-or-die recovery plan despite protests, a company source said on Wednesday.
Rome, Dec 05: Italy's crisis-hit Fiat will launch a temporary layoff program on Thursday, signalling its determination to push through a do-or-die recovery plan despite protests, a company source said on Wednesday.
The industrial group has decided to send letters Thursday telling 7,600 workers to stay home even before the deadline on union negotiations has run out, the source said.
Fiat, Italy's largest private employer whose fortunes reverberate throughout the national economy, is under pressure from creditors to reduce its net debt to 3.6 billion euros by early 2003 from 5.8 billion euros at the end of September.
The company has drafted a restructuring plan that foresees 8,100 job cuts, about a fifth of its Italian auto sector workforce.
Creditors welcomed the do-or-die plan, but unions and some government ministers have opposed it. Fiat employees across Europe are due to march on December 16 to demand investments in development rather than job cuts.
Union sources said the Prime Minister's office had called Fiat and unions to a meeting at 1400 GMT on Thursday, the deadline for an agreement in talks that stalled last Friday and failed to get back off the ground this week.
"We will go to the meeting with all attention and respect but we are determined to go ahead with our proposals included into the plan," the source said. "Already last week we expected that we would start the (layoff) procedure by Thursday."
Although it was assumed that Fiat would go ahead with layoff plans in the end, industry experts thought the company would wait until the deadline on union talks had run out. Instead, it appears Fiat could be in for a long winter of strikes.
A group of desperate Fiat workers on Wednesday climbed onto the roof of one of the company's factories and threatened to jump if their jobs were not guaranteed.
Prime Minister Silvio Berlusconi called an impromptu meeting with industry, labor and economy ministers on Wednesday night to form a common proposal ahead of talks. The officials met until late in the evening, but no details of their talks were provided.
Fiat, once a European auto industry leader, is struggling to create the conditions for a turnaround by 2004, when it has an option to sell the rest of its auto division to the world's biggest automaker General Motors, the US company that owns 20 per cent.
Fiat, Italy's largest private employer whose fortunes reverberate throughout the national economy, is under pressure from creditors to reduce its net debt to 3.6 billion euros by early 2003 from 5.8 billion euros at the end of September.
The company has drafted a restructuring plan that foresees 8,100 job cuts, about a fifth of its Italian auto sector workforce.
Creditors welcomed the do-or-die plan, but unions and some government ministers have opposed it. Fiat employees across Europe are due to march on December 16 to demand investments in development rather than job cuts.
Union sources said the Prime Minister's office had called Fiat and unions to a meeting at 1400 GMT on Thursday, the deadline for an agreement in talks that stalled last Friday and failed to get back off the ground this week.
"We will go to the meeting with all attention and respect but we are determined to go ahead with our proposals included into the plan," the source said. "Already last week we expected that we would start the (layoff) procedure by Thursday."
Although it was assumed that Fiat would go ahead with layoff plans in the end, industry experts thought the company would wait until the deadline on union talks had run out. Instead, it appears Fiat could be in for a long winter of strikes.
A group of desperate Fiat workers on Wednesday climbed onto the roof of one of the company's factories and threatened to jump if their jobs were not guaranteed.
Prime Minister Silvio Berlusconi called an impromptu meeting with industry, labor and economy ministers on Wednesday night to form a common proposal ahead of talks. The officials met until late in the evening, but no details of their talks were provided.
Fiat, once a European auto industry leader, is struggling to create the conditions for a turnaround by 2004, when it has an option to sell the rest of its auto division to the world's biggest automaker General Motors, the US company that owns 20 per cent.
Underlining Fiat's woes, data released on Wednesday showed the company's car sales in Italy slumped 22.4 per cent in November from a year earlier, pushing its market share to a new all-time low of just 28.2 per cent.
Fiat needs the government to grant it "crisis status" so it can tap temporary layoff funds and pay workers over the next year -- and possibly beyond if they remain idle.
Meanwhile, Fiat's turnover made up 5.6 per cent of Italy's gross domestic product last year. Its latest crisis, together with the knock-on effects, is due to pull down an already lean 2002 GDP by 0.4-0.6 per cent.
Bureau Report