Sergio Marchionne

Fiat claims that it is on pace to earn two billion euros ($2.8 billion in U.S. funds) in 2010. Good news to be sure, but Reuters reports that CEO Sergio Marchionne says that the company's five factories in Italy contribute exactly zero percent of that profit due to the country's rigid unions. In fact, the CEO claims that Fiat loses money in it's Italian factories, saying "Fiat would do more if it took Italy out from its results. We cannot continue to manage operations at a loss forever."

Marchionne claims that the problem with the Italian unions is so bad that all five factories can't match the productivity of the company's one Polish plant. But the outspoken CEO isn't banking on guilt to gain concessions from organized labor; instead he's offering up $28 billion worth of investment within the country if the union becomes more flexible. For example, if the unions agree to cut back on breaks, Marchionne claims that he's willing to (eventually) pay them more for their sacrifice.

Fiat even gave a name to it's push to make the country more cost-competitive. It's called Fabbrica Italia (Factory Italy), and the aim is to bring the boot-shaped country's manufacturing competitiveness in-line with that of the country's neighbors. So far, Fiat has seen mixed success from unions, with some plants voting in the changes and others still standing in opposition.

[Source: Reuters | Image: Massimo Pinca/AP]