Union bosses, politicians and workers throughout Europe are screaming about press reports that say Fiat plans to make massive labor cuts if it gains control of General Motors operations here.
Fiat plants in Italy as well as GM Europes factories in Germany, Spain, Sweden and Belgium would shrink, the reports say.
Fiat has declined to comment.
Thats OK because CEO Sergio Marchionne has already addressed this issue.
When he spoke with Automotive News Europe last November, the CEO warned that it would be easy to make the industry healthy again.
We need to bring people around the table and say: Look guys, the party is over. Somebody called our bluff and were not all going to make it so lets fix it. It may be painful. It may be ugly. But if we want to do the right thing for this industry, lets do it now, Marchionne said.
Since then he had brought people to the table.
Fiat has a deal with Chrysler LLC and is negotiating to gain GMs European and Latin American operations. His stated goal is to create an automaker that can produced 5.5 million to 6 million cars a year because he says that is the volume needed to have any chance of making money.
Now comes the painful and ugly part of the process: closing plants and cutting jobs.
In its Chapter 11 filing, Chrysler identified six plants that will stop work by the end of 2010. All of those plants are in North America.
If Fiat links with Opel, Vauxhall and Saab some of the automakers European factories will be closed.
Last year, European car sales were 1.2 million units below 2007. That is equivalent to the annual output of four plants.
This year, sales are forecast to fall by another 2 million units. That is equal to another six plants.
Given those numbers, it would be impossible to merge those brands without making deep cuts.
At Fiats annual meeting in March, Marchionne provided another warning: "Given the projected lackluster growth in volumes for the next five years, the chronic structural imbalance in our industry will become even more marked. Many factories will become redundant."
At the meeting, the CEO noted that more than 24 automotive plants have closed in the past 12 months in the United States and Canada. He said Europe could not avoid closing factories.
That means we will hear more screaming.
We will probably see strikes.
It will be ugly and painful but until someone comes up with a better way to cope with dramatically falling demand, this is the only way for the automotive industry to survive.