Fiat halts new investments pending clarity on labour law
New investment from Fiat, Italy’s largest employer, crucial to bolstering the country’s economy
Fiat will put new investments on hold until it gets a clearer idea of the impact of a court ruling that a portion of Italy’s labour rules are unconstitutional, its chief executive, Sergio Marchionne, said on Tuesday.
Italy’s constitutional court ruled last week that a clause in the country’s labour law from the 1970s allowing automaker Fiat to bar the Fiom metalworkers’ union from representing workers on its factory floor violated the constitution.
Fiat is Italy’s largest employer, and its billions of euros in new investments are crucial to bolstering the country’s economy, which has been in recession for two years and suffers from record unemployment.
Struggling Italian companies received another setback on Tuesday when Standard & Poor’s cut the country’s sovereign credit rating to BBB from BBB-minus, a move likely to drive up borrowing costs.
Since 2010, Fiat has rolled out investments at some of its Italian factories in exchange for concessions from labour unions for more flexible work conditions.
Fiom did not support the new contract, and it started legal proceedings against Fiat that led to last week’s court ruling.
We are going ahead with the re-launch of Alfa Romeo, it’s up to Italy to decide whether the cars will be built here or elsewhere
