Fiat Auto car workers are considering calling an eight hour strike on March 11 to protest at uncertainty over the automaker’s future, especially its alliance with General Motors, union members reportedly said on Thursday.
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According to Reuters, unions have long criticised Fiat for not investing enough in its loss-mired car unit and have demanded a meeting with top managers to discuss strategy as sales continue to stutter and a row over whether it can force GM to buy Fiat Auto rumbles on.
Their anxiety increased this week when Fiat failed to get a deal out of GM to annul the put option – GM had been expected to pay about €1.8 billion to kill the put, the report added.
“We’re against the put and GM buying Fiat Auto not least because it wouldn’t resolve the real problems,” Gianni Rinaldini, head of Italy’s main metalworkers’ union Fiom-CGIL, told the news agency.
“The numbers people say GM could pay are only about the same as what Fiat is going to lose for 2004,” Rinaldini reportedly said, forecasting Fiat Auto would post a loss of €1.5-1.7 billion. In 2003 Fiat Auto made a net loss of €2.1 billion.
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By GlobalDataReuters noted that Italy’s vociferous unions and their sway over authorities are a major disincentive for foreign investors and would make GM’s life hard if it bought Fiat Auto and tried to cut output.
Most analysts reportedly expect GM will avoid buying Fiat Auto either with a cash annulment or by fighting in court to prove its belief that Fiat invalidated the put by changes it made to its car unit to try to pull out of crisis.
Reuters said Fiat has been battling to reverse a slump in car sales and pull back to profit in 2006 but its market share in Italy, which accounts for about 40% of revenues, is near historic lows at around 27%, and sales are stuttering elsewhere in Europe.
To cut output in line with demand, Fiat is sending Italian workers home for weeks at a time under a temporary layoff plan, the report noted – the factories are working at about 67% capacity, at which point analysts say it is almost impossible to make a profit.
“Fiat is the biggest company in Italy and we know how to make cars. But we’re paying for mistakes they made 10 years ago,” Tonino Regazzi, the head of the UILM union, told Reuters.
