VENICE, Italy (Reuters) - Fiat S.p.A. held talks with unions over the future of its factory near Naples on Friday, and CEO Sergio Marchionne warned time was running out to reach a deal.
Fiat offered in December to bring production of its next Panda -- Europe's top-selling minicar -- to Pomigliano d'Arco, near Naples, from Tychy, Poland, to give the plant a lifeline as it struggles to remain competitive.
Fiat met unions in Rome in hopes of striking a deal, which could secure a hefty investment by the carmaker in its Pomigliano d'Arco plant outside Naples to prepare for a new Panda launch late next year.
"Time is running out. I have to turn on this car. There is a limit to everything," Marchionne told reporters on the sidelines of a business event.
The Pomigliano plant, which has about 5,000 workers, has no alternative to producing cars, he said.
The switch will require a 700 million euro ($842.7 million) investment in the Naples plant, Fiat has said. The carmaker has said the plant would need working practices to be brought in line with international competitors.
Unions have said some of Fiat's demands could be in breach of labor laws or national employment contracts.
Serbia an alternative
Marchionne reiterated a deal must be reached "as soon as possible" or Fiat would move production of the new Panda elsewhere. Alternative options are to continue building the Panda in Poland or to build the car in Serbia.
"Fiat can't risk the launch of a key car such as the Panda on production from an uncompetitive plant," the company has said.
Fiat plans to double passenger car production in its home country to as much as 1.4 million vehicles a year in 2014.
Fiat's plants in Italy are its lowest in terms of productivity compared with Poland and Brazil.
The Naples plant produced 36,000 cars last year, as demand for the Alfa Romeo cars it makes suffered.
In total, Fiat's five Italian plants last year produced 650,000 units with 22,000 employees.
That's in contrast to Brazil where its plant made 730,000 vehicles last year with 9,400 employees, while Tychy produced 600,000 vehicles with 6,100 people.
Polish plant capacity strained
Moving Panda production -- about 270,000-300,000 cars a year -- should ease the strain on the Polish plant, Fiat hopes. The factory will partly fill the gap with increased production of the Fiat 500 minicar and has been asked to raise output of the Ka minicar, which it makes for Ford.
In addition, it will start producing the new Lancia Ypsilon entry-premium model, which is also due for launch next year, at around 120,000 units annually.
Polish unions said earlier this week they are open to working six days a week to keep the next Panda in Tychy, which is in southwest Poland near the border with the Czech Republic.
Luca Ciferri contributed to this report