Fiat S.p.A. CEO Sergio Marchionne won narrow backing from workers for a labor deal that clears the way for Jeep models for the U.S. market to be built alongside Alfa Romeos in Italy.
Workers at Fiat's Mirafiori factory in Turin voted 54 percent in favor of the groundbreaking contract that limits strikes and absenteeism in exchange for investment.
Marchionne, who engineered the Italian carmaker's 25 percent stake in Chrysler Group, which includes the Jeep brand, and transformed Fiat from an ailing conglomerate, had threatened to move production abroad if workers rejected the changes.
Fiat's top executives said they were pleased with the outcome of the vote and hoped the deal would begin a new era in labor relations free of acrimony.
"Now we need to put controversies and contrasting positions behind us and face the challenges that we have before us in a constructive manner," Fiat Chairman John Elkann said in a statement on Saturday.
Crucial for Alfa's U.S. launch
Fiat and Chrysler plan to invest more than 1 billion euros ($1.32 billion) in the Mirafiori factory to build Alfa Romeo cars and SUVs and Jeep models for European and North American sales as part of a new joint-venture company that will take control of the plant.
The factory will build the mid-sized Giulia sedan and station wagon, which will replace Alfa's 159 range, as well as medium SUVs for the Alfa and Jeep brands.
Output is scheduled to start in the third or fourth quarter of 2012. Half of the production will be sold in Europe and the other half will be exported, mainly to North America. The Alfa models are a crucial part of the brand's relaunch in North America.
Fiat will cover about 60 percent of the cost, about 600 million euros, because it wants about 150,000 Alfa models a year. Chrysler will pay roughly 400 million euros to get an annual supply of about 100,000 units of the next-generation Jeep Compass/Patriot that is due to launch in 2013.
After the vote, Bruno Vitali, head of the FIM union said: "Now the industrial plan for Mirafiori will go ahead. Marchionne has to quickly deploy the investment, as he promised."
More than 96 percent of workers took part in the referendum on Thursday and Friday.
The contract has already been agreed at Pomigliano, another of Fiat's Italian car factories. The contract is part of a Fiat-led unprecedented overhaul of Italian labor relations, which have been based on national deals rather than on a plant-by-plant basis.