• Oct 27, 2010
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]


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  • 42 Comments
      • 4 Years Ago
      "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."

      Imagine that, getting paid more for doing more work. What a novel concept. I'm sure the union reps stopped listening after "cut back on breaks."
        • 4 Years Ago
        "You live only once, so better enjoy life in full"
        That's the Italian phylosophy.
        We are thinkers and artists not handworkers.
        For such a tiny country Italy has been the cradle of famous explorers, artist, inventors, phylosophers, probably more than any other country in History
        Up until 10 years ago Italy was the 5th most industriliazed country in the world.
        This misconception that Italians are lazy is bulls, we just refuse to dedicate all our life to work, we prefer doing a job for a living.

        Italians would happily trade less money for more free time, so Bruno is not far from the truth, but Italians can also adapt to anything if they are in trouble.
        We are very adaptable to any kind of situation so I am not worried we can find a compromise with FIAT too, and that, without compromising our life style "la dolce vita".
        • 4 Years Ago
        Throwing money at "those" Italians will not change anything. As long as Italians make just enough money to survive and as long as they have parents to wipe their butts they won't even blink. Now, now what would you rather have more money or a two hour brake. My cousin's work force refused a one euro less per hour to save their jobs. I'll let you guess what happened.
      • 4 Years Ago
      You still haven't understood ...
      Why marchionne has leaned against the chrysler? (in addition to enter the American market).
      Because he wanted to take the opel? (but the German Government has trusty).
      Why và in russia and takes the Russian car factory?
      Why và in serbia and want to take the yugo? (inter alia brand completely unknown to me. ..). The goal is ONLY ONE .... STATE PUBLIC FUNDING. The Italy for the first time not stà facilitating fiat economically and him what to do?? threat to bring establishments in serbia ... a worker there guadagna1/5 one Italian. Polish workers are tired instead and they start to complain ... they earn 1/3 of an Italian worked. Behold unveiled the mystery ... try simply pull the rope. But the rope you can break ... and if it does not receive a kick in the ass by Fiat will receive from all Italians.
      • 4 Years Ago
      Poland is incredibly unionized too, so that is interesting.

      Please feel free to move all Fiat factories to the US.

      Signed,

      The Unemployed.
        • 4 Years Ago
        Remember where Poland was just a short 20 years ago? Even unionized (think Lech Walesa) a Polish or Eastern European worker makes an amount that you or I would laugh at. But to them, that's great money.
      • 4 Years Ago
      The Italians are known for a lot of good things, factory work isn't one of them.
      • 4 Years Ago
      After visiting Italy on holidays, the fact Italian factories don't make any money does not surprise me at all lol.
      • 4 Years Ago
      FIIIIIVE factories in Italy can't match the output of ONE factory in Poland?!?


      Certainly that can't be right, or at least it doesn't sound right. If it is, Mr. Marchionne should move all production to Poland or throw us Americans a bone.

      That is an embarassing statistic for Italy.
        • 4 Years Ago
        Oh but it is possible....have a family member who worked for Union Carbide as chemical engineer got a job in Canada and when meeting were called in Italy...say 9 am.......most of the big chiefs would show-up one to two hours late. Worst, if an emergency meeting was called on a Sunday and there was a F1 race or good soccer game the people would show up after the match or even not at all.
        • 4 Years Ago
        I don't think it's output but profitability he's talking about. But I could be wrong...
        • 4 Years Ago
        @ BRUNO TULLIANI

        At least they have their priortities straight.

        F1 and Soccer > Almost everything else
        • 4 Years Ago
        FIIIIIVE factories in Italy can't match the output of ONE factory in Poland?!?


        Certainly that can't be right, or at least it doesn't sound right. If it is, Mr. Marchionne should move all production to Poland or throw us Americans a bone.

        That is an embarassing statistic for Italy.

        that one factory is producing those high selling very small Fiats 500 and Panda, you really cant compare those to other factories, if they cant sell enough bigger cars, its not fault of workers.. the factory that makes many Alfas is probably running at 10% capacity?. Marchionne would probably want to make cars in country where labour cost would be 1/10th of European salaries....the car manufacturing is same as any other manufacturing business....
      • 4 Years Ago
      Of course upper mgt is going to bash unions.

      If they could, they'd pay their employees $0.50/day like the Chinese.

      If Germany can be the best manufacturing country in the world, producing the best cars (arguably) in the world WITH UNIONS, then it's all about implementation and cooperation.

      Of course, the work ethic of an Italian compared to a German...well...
        • 4 Years Ago
        Germany's retirement age is 67 or 68, working at least 40 hours a week. The union workers in France are literally kicking and screaming in protest over the possibility of working 35 hours a week until age 62. I would imagine the Italian worker's mindset is closer to that of the French worker than the German.
        • 4 Years Ago
        "...producing the best cars (arguably) in the world..."

        Oh, hell yes, that can be argued as in they Don't produce the best cars in the world. If you ever owned one you know what I'm talking about.
        • 4 Years Ago
        @Scorch: Actually it's worse than that.

        According to some friends, the overwhelming majority of those striking are unions and public servants who get to retire at 50 or 55,

        and have their Pensions calculated on their last 6 months of salary as the baseline,

        and everyone in that spot is always Promoted in their last 6 months - 1 year of work,

        and as usual, it's chiefly the Unions in this situation who are using every last trick they can to avoid more work, less pay, and less retirement,

        -even though it would slow the rate at which people are killing the country and the harder workers,

        -which are the people who have jobs at normal non-gov, non-union companies and have their pension rate averaged over their best 20 years of employment and already retire at 62.


        See? Unions suck EVERYWHERE. Though I'd imagine Italy's unions are pretty bad.
      • 4 Years Ago
      "Fiat loses money in it's Italian factories"

      For the SECOND TIME TODAY, Chris Shunk, It's ITS, not IT'S.

      • 4 Years Ago
      A little known secret is that Fiat is in all likelihood going to move a lot of the production in Italy to Canada and the US .. he peg factories in Canada already for that. Too early to see where it will all go, but those factories are a set to go it the plans go that way.

      There is actually a chance .. again too early to really call it .. but a chance Chrysler could get growth in its labour force because if it.
        • 4 Years Ago
        Haha, yeah, right.

        Not only would it be problem because of the export/import issues, currency exchange rate variations but also because of the politics of the matter.

        Europeans don't want American made cars. Import taxes hits both ways. There's a reason global car producers have local factories. You are sorely lacking in logic!

        I wouldn't touch a car made in Canada or the US, never mind a Fiat made abroad!
      • 4 Years Ago
      I love my cousins but they are socialists to the core. Precisely why my grandparents left it all behind to come here. If there were more Marcchiones, Italy would have greater industrial capacity with less unemployment.
        • 4 Years Ago
        Obama wants to make this country "EU West" and bring those values and principles here.

        No thanks.
        • 4 Years Ago
        Amen, exactly.....my parents left Italy to find work here in Canada. WORK was their number one priority and especially hard work, jobs that no one wanted. As first generation born here in Canada, when I look around we did pretty well for ourselves. The Italians just don't want to work period. Their mothers spoil rotten their children. The teenagers don't know what it means to to suffer and sacrifice for something you really want. They go about their days simply "floating around doing nothing". I have two cousins that work at Fiat in the town of Termoli in Campobasso. Pride and pride in work is the last thing on their minds. In Italian, when someone is off to work we say "Buon' Lavoro" meaning have a good hard days work. They have forgotten that a man who doesn't have an honest hard days work is not a man.

        Sergio Marchionne left Italy relatively soon after the war to better his life in an other country. He left his country with a good work ethic and gave his best to become something. I am pretty sure he is livid at the situation Fiat is in......why because he has pride. Can't imagine when the old generation pensions run-out. Reality is going to hit them hard.
        Now back to my grappa......(slowly sipping and enjoying life...ahhhhh)
        • 4 Years Ago
        I disagree. I think the world would be a better place if governments would just force corporations to operate at a loss by hiring unionized labor to do shoddy work. After all, the Fiat line workers probably had lazy parents that got overpaid for what they did, and they in turn had lazy parents who were overpaid as well. All they want is to get paid the same salary for screwing seats into cars as someone who went to grad school but corporate fatcats have ruthlessly outsourced their jobs to right to work states.

        End sarcasm.

        News flash to the workers of the industrialized world: this is no longer the middle of the 20th century and companies like GM and Fiat are no longer the dominating forces in the auto industry they once were. They cannot afford to bestow upon you gilded pension and benefits and still expect to remain competitive in a global economy.
      • 4 Years Ago
      Sounds like they need 5 Polish factories.
      • 4 Years Ago
      bite the bullet. fire 70-80% of your crappy italian workforce and more to a more competitive country.
        • 4 Years Ago
        Agreed.......
        • 4 Years Ago
        I think you don't understand the politics of leading a VERY large company... Hypothetically speaking though that would be the best option for Fiat.
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