Fiat SpA told labor leaders on Friday it will offer early retirements to half the workers at its Termini Imerese assembly plant in Sicily, which it plans to close in 2011. Fiat, its unions and the government are scheduled to meet again on 5 March.
The company, which pledged last month to boost production by 50% in Italy, also says it is trying to reduce excess capacity in Italy. The Italian government has linked the renewal of its scrappage incentive to keeping the Sicilian plant open. But last week CEO Sergio Marchionne said Fiat could “manage” without new incentives.
One possible compromise: Fiat says it is willing transfer Panda production from Poland to its plant in Pomigliano. Citing an unnamed source, Reuters reports that the government may renew its scrappage incentive in exchange for that transfer.
Termini Imerese, Fiat’s smallest plant in Italy, employs about 1,700 full-time employees. Fiat has said it loses €1,000 on every vehicle produced there. The company’s plans to close the factory have touched off a furor in Italy. Last week Pope Benedict XVI called on Fiat to keep the plant open.
The Italian government is reviewing seven proposals to use the Sicilian facility for other purposes, including an electric vehicle venture involving India’s Reva Electric Car Co. and Italian private equity firm Cape-Natixis.