Fiat workers back plan to save plant near Naples

Workers at a Fiat factory near Naples backed a plan to increase labour flexibility in return for investment to keep the plant open, in a vote which could have wide implications for Italy's rigid labour system.

Just under two-thirds of the 4,642 workers who voted on Tuesday at the Pomigliano plant backed Fiat CEO Sergio Marchionne's proposal to raise productivity there by making working shifts more flexible, restricting strikes and limiting benefits such as sick days.

However, it was not immediately clear whether the result was emphatic enough to convince the tough-talking Marchionne, who has demanded the unions' unanimous backing, to press ahead with his plan to pump 700 million euros into upgrading the plant and moving production of Fiat's next Panda model from Poland.

Labour Minister Maurizio Sacconi hailed the ballot's positive outcome as a significant departure from the traditional antagonistic approach of Italy's powerful unions toward labour negotiations.

"This vote changes industrial relations by moving away from conflict towards collaboration," Sacconi said. "From today, the country is showing itself to be more modern."

Four out of five unions at the plant have expressed support for Fiat's proposal, with only the Fiom union saying the proposal broke rules on rights to strike and sickness leave.

Fiom leaders said Tuesday's 'no' vote was big enough to oblige Fiat to renegotiate, but other unions urged the car maker to push on with plans to modernise the Pomigliano plant.

"About two-thirds of workers voted yes. What is in store now for Pomigliano? You must ask Marchionne but it would be a funny if he made an agreement, won and then acted as if he lost," said Bruno Vitale, secretary of the Fim Cisl metal workers union.

"OPPORTUNITY FOR SOUTHERN ITALY"

Fiat aims to boost employment at the plant to 15,000 and produce as many as 300,000 Pandas a year at Pomigliano. Two-thirds of the - €8 billion to be invested under its 2010-2011 strategic plan have been earmarked for Italy.

Pomigliano, in Italy's underdeveloped and crime-plagued south, has a history of labour unrest and the worst productivity of all five of the company's domestic plants, even taking into account slow demand for its Alfa Romeo models.

With Italy's economy struggling to emerge from its worst post-war recession, unemployment in the region is already running far above the national average of nearly 9 per cent.

"This could be the start of a new phase," said the governor of the Campania region, Stefano Caldoro. "The relaunch of Fiat's Pomigliano plant is an enormous opportunity for Campania and all of southern Italy."

Fiat is Italy's biggest manufacturer and a major player in its car industry, which accounts for 11.4 per cent of the - 1.5 trillion euro economy.

Economists say the proposed deal could set an important precedent for labour relations nationwide, moving Italy into line with more productive European nations, such as Germany.

Italy's inflexible labour market and generous welfare provisions have long proved a drain on productivity in the euro zone's third largest economy, analysts say.

By the end of last year, productivity had fallen 2 percentage points below its 2000 level, compared with increases of 8.7 percentage points in Germany and 10.4 in France, its two main EU export markets, according to Italy's statistics agency.