Fiat reportedly closes most of Italian plants for one month; 48,000 workers affected

Italian automaker Fiat Group SpA (FIA.L) has shut down most of its plants in Italy for a month, laying off about 48,000 blue collar workers for an extended holiday, reports said. The shutdowns through mid January will involve 14 of the company's 20 Italian plants.

Under the temporary layoff scheme, the workers will receive reduced wages. Meanwhile, unions representing Italian auto workers reportedly warned that Fiat's decision could affect as many as 200,000 workers. The unions argued that the real number of people affected will be much higher if the knock-on effect is accounted.

"For every person employed by Fiat, there are three or four people employed by sub-contractors, which brings the total amount to something between 150,000 and 200,000 people," AFP quoted Giorgio Airaudo, head of the main Fiat union, as saying. In Turin alone, the temporary lay-off will affect 40,000 people, including 10,000 directly employed by the automaker, Airaudo reportedly stated.

Fiat has 80,000 workers in Italy. In total, the company has 178 plants and 185,000 workers worldwide. The company's plants for agriculture, construction and industrial vehicles are not affected by the shutdowns, reports said.

The Turin-based automaker has also laid off workers for periods this fall as the global auto industry is witnessing falling sales with declining demand due to the financial crisis worldwide.

The latest production cut came as European car sales fell 26% in November. Fiat witnessed a 30% decrease in its key Italian market. The company sold 71,000 new cars in November and 1.53 million cars in the first 11 months.

Opposition lawmakers in Italy have reportedly urged the government to follow France's example and intervene with financial aid to support the auto sector. However, Italian Foreign Minister Franco Frattini said any aid should be at the European level.

Meanwhile, the U.S. Senate last week voted down a bailout plan for the country's big three automakers, General Motors (GM: News ), Ford (F: News ) and Chrysler. The White House said it would consider using the $700 billion financial-rescue plan to avert the bankruptcy of these companies.

FIA.L ended trading at 1,411.82 pence on the LSE on November 14, up 36.55 pence, on a volume of 1.56 million shares.


Source : RTTNews
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]