Fiat's plan to cut Polish workforce causes government concern
WARSAW -- Poland's government will ask Fiat to reconsider plans to lay off a third of its workforce in the country.
Fiat has said it will lay off 1,500 workers at its factory in Tychy, Poland, and in its local sales operations.
Deputy Prime Minister and Economy Minister Janusz Piechocinski was quoted as saying by newspaper Rzeczpospolita on Monday that the government wants to talk to Fiat's Poland unit on "a significant correction of the company's announcement."
The Tychy plant is losing production of the Panda, Europe's top-selling minicar. Fiat is building the latest generation Panda at its plant in Pomigliano, near Naples, Italy.
Fiat said the lay offs are a response to falling car sales in Europe.
Fiat doesn't plan to further reduce jobs in Italy after shutting a plant in Sicily in 2011. The carmaker says it will reach the break-even point in Europe in 2015 at the soonest as it begins selling more expensive models built at plants in Italy.
"It's simply easier to fire people in Poland at the moment than in Italy, where there are strong political headwinds," said Commerzbank analyst Sascha Gommel. "They need to do more to increase their financial leverage so that they can buy the rest of Chrysler."
Fiat expects to lose 700 million euros ($903 million) in Europe this year.
Production of the old-generation Panda will stop at Tychy the end of this month. The factory will continue to build the Fiat 500, Ford Ka and Lancia Ypsilon.
Tychy production is forecast to be 300,000 next year, half of the 600,000-unit output in 2009. Production at the plant, which employs 5,600 people, will be lower than 350,000 cars this year, Fiat said.
The number of Fiat workers who will lose their jobs will be known after negotiations with trade unions finish in the first half of January, a spokesman for Fiat Auto Poland said on Friday.
Fiat Auto Poland is the country's largest car manufacturer. The lay offs announcement comes at a time when Poland's economy has started to slow sharply after going through the global economic crisis in the past four years relatively unscathed.
Economic growth slowed to 1.4 percent of gross domestic product in the third quarter, while the country's unemployment rate is estimated to have risen to 12.9 percent at the end of November from 12.5 percent in the prior month.
Reuters, Bloomberg and Luca Ciferri contributed to this report