Canadian Manufacturing

With Fiat set to take full ownership of Chrysler, unions worry about jobs in Italy

by Frances D'Emilio, The Associated Press   

Canadian Manufacturing
Operations Automotive Fiat Manufacturing

Italian unions fearful global reach of Fiat could hurt production, job security and contract conditions

ROME—Some Italian unions are fearful what Fiat’s deal to take full ownership of Chrysler will mean for jobs and investments in the country.

In a New Year’s day announcement, Fiat Spa said it could complete its acquisition of Chrysler without having to raise new capital through a rights issue.

Fiat will buy a 41.5 per cent stake held by a United Auto Workers (UAW) union trust fund for $1.75-billion in cash and another $1.9-billion in extraordinary dividends.

The deal is due to close by Jan. 20.


The agreement caps the dream of Sergio Marchionne, Fiat’s chief executive and CEO of Chrysler Group, to run a truly global automaker.

Marchionne called the deal one of life’s “defining moments that go down in the history books.”

The move was greeted in Italy, where Fiat is the largest private employer, with a mixture of anxiety and excitement.

Italian unions have long fretted that the global reach of Fiat could come at their expense in terms of production, job security and contract conditions.

Their leaders immediately pressed for guarantees, appealing to the government to help safeguard their concerns.

“It is indispensable that Fiat say what it intends to do in our country,” Susanna Camusso, leader of the nationwide, left-leaning CGIL labour confederation, said in a statement.

Fiat has a total of 215,000 employees, almost a third of which are in Italy.

While praising the deal as important for Fiat to keep up with rivals, Camusso insisted that the company’s “strategic direction and planning remain Italian” and that it “keep a significant presence in Italy.”

Allied with CGIL is the FIOM metalworker’s union, which has a reputation as a hardliner in labour negotiations.

“We contend that the acquisition of the remaining capital shares of Chrysler Group was possible thanks to the maximizing of industrial capital and of human capital of the workers of Fiat Group in Italy,” said Michele De Palma, in charge of FIOM at the automaker.

“Before celebrating, we contend it is fundamental to understand the deal’s terms,” De Palma said in a written statement.

The union leader said he will ask the premier’s office to summon all sides to talks about the future of the Italian plants.

The government is struggling to revive the economy, which is mired in recession and plagued by unemployment.

More centrist-leaning unions were optimistic about the deal’s possible benefits for Italian workers.

“It is good news for Fiat workers, for the auto industry and for our country,” said Giusppe Farina, leader of the FIM-CISL union.

Fiat brought Chrysler out of bankruptcy in 2009.

But it has struggled recently with sales of its own cars.

In October, it lowered its 2013 earnings targets amid continued weakness in the European economy and car markets and lower sales in Brazil.

Without Chrysler, Fiat would have lost significantly more in the third quarter of 2013.

Business economics professor Cesare Pozzi said “there is a lot of fear” over the Chrysler deal because of Fiat’s importance as an employer, and if the deal doesn’t bring the success Marchionne envisions, Italian workers could pay the price.

Still, said Pozzi, who teaches at LUISS, a private university in Rome, “this time it could be an opportunity.”


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