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Wednesday, April 7, 2010 as of 11:14 AM ET



Fiat Cars From Serbia

July 23, 2010 - 9:41 AM | by: Greg Burke

Fiat-Chrysler CEO Sergio Marchionne has decided to take production of one of Fiat’s new cars to Serbia from a plant near Turin in northern Italy.

The move has outraged Italian unions, and politicians of all stripes. “Fiat stands for Fabbrica Italiana Automobili Torino,” said opposition leader Pierluigi Bersani of the Partito Democratico. “That’s our starting point.”

The center-right government of Prime Minister Silvio Berlusconi is struggling to get Fiat to keep its production at home. Cabinet Minister Roberto Calderoli of the Northern League, a party allied with Berlusconi, promised to put up a fight.

“Fiat in Serbia?” Calderoli asked. “That sounds like a joke, and perhaps it was made to make the unions more mild. But in any case, nobody’s laughing.”

Marchionne has clearly tired of tangling with Italian unions, especially after promising to bring back production of the economy model Panda from Poland to a plant known as Pomigliano, outside of Naples. While Fiat will make a major new investment at that factory, it comes only after wrangling concessions from some of the unions at Pomigliano, which has been notorious for low production and a high rate of absenteeism.

It was a bitter fight, and one influential union, the FIOM, has refused to agree to the Pomigliano deal. That could spell trouble when Panda production begins there, trouble Marchionne doesn’t want to risk anywhere else.

“It’s not true that Fiat is forgetting about Italy, because it is going ahead with Pomigliano,” said Alberto Mingardi of the Bruno Leoni Institute, a conservative think tank.  ”For years Italy stayed alive thanks to government help. That was very useful for decades, but now it’s a real multi-national and has a different kind of relationship with the government. If Fiat wants to go make cars in Serbia, neither the Prime Minister nor the mayor of Turin can tell them they shouldn’t.”

Fiat has already decided to close a plant in Sicily, not far from Palermo, and Marchionne is not endearing himself to Italian workers as he cuts costs and tries to keep Italy’s flagship car company competitive.

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