Fiat S.p.A. could reconsider plans to transfer production of the Panda to Italy from Poland unless unions agree to a productivity deal soon, CEO Sergio Marchionne said.
Fiat plans to invest 700 million euros (about $862 million) in an underused factory in Pomigliano near Naples, Italy, to build there the next generation of the Panda, Europe's best-selling minicar.
Marchionne said protracted talks between management and unions on productivity at the Pomigliano plant had already delayed planned investments.
"In the absence of an agreement that offers adequate guarantees it could become inevitable to reconsider the project and take into consideration alternative possibilities for production of the future Panda," Marchionne said on Friday.
"I hope that a rapid solution can be reached because soon it will be impossible to accept further delays," he said.
Fiat plans to move Panda production to Pomigliano from the company's factory in Tychy, Poland, with production of the third-generation Panda starting in Pomigliano in the second half of next year. Annual production of between 270,000 and 280,000 units is planned at full capacity.
The factory currently has an installed annual capacity of 240,000 but last year built just 36,000 units of Alfa Romeo's slow-selling 159, GT and 147 cars.
To make Panda production at Pomigliano a viable business proposition, Fiat has asked unions for “flexibility in shifts and work days, internal mobility and opposition to irregular forms of absenteeism,” Fiat said last month.
Reuters contributed to this report