Frustrated in Italy, Fiat gears up in Serbia | autos | Hindustan Times
Today in New Delhi, India
Feb 27, 2017-Monday
New Delhi
  • Humidity
  • Wind

Frustrated in Italy, Fiat gears up in Serbia

autos Updated: Oct 16, 2010 11:16 IST

Fiat CEO Sergio Marchionne's ambitious project to build 6 million cars a year by 2014 together with Chrysler may be running into resistance from unions in Italy reluctant to adapt to new work rules.

But there are workers in this economically depressed southern Serbian town ready to sign on.

Facing intransigence back home in Italy, Turin-based Fiat is ramping up plans for the sprawling communist-era Zastava plant in Serbia, plowing $700 million into hazardous waste cleanup and new assembly lines that will soon put some 3,000 people to work. Zastava, best known abroad for making the Yugo compact exported to the United States in the 1980s, has been drawn into Marchionne's battle with Italian unions to achieve more flexible work rules as a condition for a whopping euro20 billion investment in Italy's underutilized plants to more than double national production. This summer Marchionne said Serbian workers would build small minivans previously planned for an Italian plant. And he has made clear that if unions in Italy don't agree to more flexible work conditions, still more investment will go abroad _ a sign of Marchionne's determination to forego Fiat's Italian home base, if necessary, to find the efficiencies and alliances the company needs. The prospect is bittersweet for Serbian workers but they're not saying no.

"Normally, any job that would come here, for our workers, is welcome. But we are not the ones who would like to see workers in another country lose jobs over that," said Zoran Mihajlovic, the head of the Zastava auto union. "I hope both workers in Italy would have jobs and the workers in Serbia would gain new models." If economic neglect has made the city of 180,000 a living museum to the old Yugo, where long-archived models like the Florida and Koral ply the streets, its aim is to become a monument to economic development in a country that has lagged by some two decades in the transition from a Socialist to free market economy. Shift change at the plant is not what it once was when 18,000 workers pumped out hundreds of thousands of Yugos a year. Lone workers trickle out of the gate, singly or in pairs, trudging over the bridge homeward or slipping behind the wheel of an old Yugo, the boxy compact that started for under $4,000 but was widely viewed as one of the worst cars in automotive history, largely for quality. Yugos are still the only car many can afford, in a town where boarded-up storefronts and cafes full of working-age men testify to economic hardship.

Some 10 months after Fiat moved in, production is still slow, but workers' can look forward to better days ahead.