Marchionne threatens to pull Fiat out of industry body over labor row

Fiat S.p.A. will pull out of Italy's main industry federation unless more progress is made in talks with unions over labor rules, CEO Sergio Marchionne said on Thursday.

According to KHABAR KHODRO, The threat by Italy's biggest industrial group is the latest development in a struggle between Marchionne and unions over new labor contracts he has introduced at three Fiat plants in Italy to reduce absenteeism and boost productivity.

Employers' federation Confindustria signed a deal with the country's three main unions groups this week to make contracts signed at the company level binding if they win the backing of a majority of labor groups or workers.

But the deal is not retroactive and says those contracts cannot drastically distance themselves from collective labor rules negotiated between the federation and the unions -- a setback for Fiat, which faces legal action from a radical union that rejected the new rules at its plants.

Marchionne, who also runs U.S. carmaker Chrysler, said that unless more progress was made to meet Fiat demands on flexible contracts, it would pull out of the employers' group from Jan. 1, 2012.

"We only want our people to be able to work in an environment where everybody accepts their duties and responsibilities," Marchionne said in the letter.

Marchionne has made plans to invest 20 billion euros in Fiat's loss-making Italian plants conditional on unions giving full backing to the new contracts at the Mirafiori, Pomigliano and ex-Bertone factories.

He has also threatened to move production abroad unless the factories accept tougher rules on working hours, sick pay and strikes.

While a majority of workers at the plants have backed the new rules, radical metalworkers union FIOM, Italy's biggest, has started legal proceedings against Fiat