Signor Thatcher

16 September 2010 By Alexander Smith

The Fiat CEO’s threat to move the carmaker’s production abroad if unions don’t accept productivity gains is real. There are echoes of Thatcher’s clash with British unions in the 1980s. If he triumphs, it could be the start of a new era for industrial relations in Italy.

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Fiat SpA Chief Executive Sergio Marchionne has threatened to walk out of Cofindustria if no deal can be found before the end of September with a union which opposes a landmark productivity deal at a Fiat plant near Naples.

Leaving Cofindustria, the employers' lobby that has represented big business in Italy for the past 100 years, is seen by many as tantamount to pulling out of the system that underpins Italian labour relations. Marchionne has also said he will take production elsewhere unless he gets guarantees that Fiat's domestic plants can operate profitably.

Fiat's shareholders voted on Sept. 16 to approve splitting off the group's industrial holdings. The demerger is set to be completed by the yearend. The industrial unit will include the Iveco trucks group, the CNH Global NV farm and construction equipment unit and the industrial and marine businesses. Debt will be split equally between the auto making and industrial groups.

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