Fiat gets union agreement for layoff scheme at Melfi plant
Italian factory to be restructured for new Jeep and Fiat models
MILAN (Reuters) -- Fiat has received trade unions' go-ahead for a layoff scheme at its Melfi plant in southern Italy that will allow it restructure the plant before producing a new Jeep and a Fiat model there.
Melfi, one of Fiat's most important facilities in Italy, makes the Punto model. Last December Fiat said it would invest 1 billion euros ($1.3 billion) to build a new entry-level Jeep and the Fiat 500X in Melfi starting in 2014.
The Jeep is known internally as the B-SUV. It will be offered only as a four-wheel-drive model and will be sold in Europe, North America and Asia.
The move is part of a strategy by Fiat to use its Italian factories to build Jeeps and other group brands for export and offset flagging demand in recession-hit Italy.
The unions' approval, announced by union UGL in a statement, allows Fiat to press ahead with its plan to halt two production lines at the plant, starting from Feb. 11. The temporary layoff scheme can run until the end of 2014, but Fiat can restart production as soon as new lines are ready.
"Fiat said production could likely start at the end of 2013, early 2014," UGL's metalworkers regional secretary Giuseppe Giordano told Reuters after attending a meeting with Fiat.
On Jan. 15 Fiat said it wanted to continue producing the Punto at Melfi depending on market demand while investing in building two new models.
Fiat is awaiting an approval by the government for the plan.