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Fiat Workers In Turin Approve Contract

Workers at Fiat factory in Turin have approved flexible work rules that Fiat insists are essential to boosting production in a joint venture with Chrysler.

ROME (AP) -- Workers at Fiat's historic auto factory in Turin have approved flexible work rules that the company insists are essential to boosting production in a joint venture with Chrysler, union officials said Saturday.

Officials of the FIOM metalworkers union, which campaigned heavily against the contract, credited votes by white-collar workers at the Mirafiori factory as key to approval of a workers' referendum. The deal was approved by a vote of 54 percent to 46 percent.

More than 94 percent of the plant's nearly 5,500 workers voted during their shifts Thursday and Friday.

The referendum essentially put to the test Fiat CEO Sergio Marchionne's ambitions to create a global automaker with Chrysler, which Fiat controls. He had warned he would take production elsewhere, possibly abroad, if it failed.

FIOM opposed the deal as weakening Italy's system of national contracts, but other unions backed it as encouraging investment. The bitter campaign split Italy's powerful labor unions.

Marchionne praised the "courage" of workers who gave their approval.

Saying yes to flexibility makes it possible to achieve "very high production levels, of up to 280,000 vehicles per year, and also open the way for the potential creation of jobs," Marchionne said in a statement.

"In a country such as Italy, which has always been tied to the past and reluctant to change ... those who voted yes showed vision," he said.

The new head of Italy's leftist CGIL labor confederation, Susanna Camusso, insisted that the referendum "shows that there is no possibility of ruling a factory without the consensus of the workers."

Industry Minister Maurizio Sacconi predicted the decision would encourage investment in Italian industry.

"The outcome of the referendum opens an evolution in industrial relations, especially in large factories that should allow a better use of the plants and a real increase in salaries," Sacconi told Italian state radio.

Marchionne had pledged to link pay increases to productivity. But the flexible work rules also limit the right to strike during full production, and reduce break times and sick pay. Unions said such rules threaten to undermine work safety for assembly line workers and erode hard-won labor rights.

At stake is a €1 billion ($1.33 billion) investment to build Alfa Romeo and Jeep brand vehicles at the plant at Fiat's Turin headquarters.

While the leadership of most Fiat unions supported the plan, many resented that a decision with consequences for the nation's system of industrial relations was thrust on individual workers.

Marchionne had threatened to begin looking immediately at alternative places to manufacture the vehicles if the vote failed.

Besides Italy, Fiat has plants in Poland, Brazil and Serbia; Chrysler, which Fiat controls, makes cars in the United States, Canada and Mexico.

The Mirafiori investment is part of €20 billion that Marchionne has pledged to invest in Fiat's Italian plants to double Italian production.

Marchionne says the more flexible work rules are vital to his ambitions to create a globally competitive car company with Chrysler that can build 6 million cars a year by 2014.

Fiat already has won such an accord at Pomigliano, near Naples, with a two-thirds worker approval. It is preparing to shift production of the new Panda there from Poland.

Colleen Barry contributed to this report from Milan.

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