December 20, 2019 / 2:42 PM / 2 months ago

Fiat Chrysler unions received assurances on jobs, investment after merger

TURIN, Italy (Reuters) - Unions at carmaker Fiat Chrysler (FCHA.MI) said management had given assurances at a meeting on Friday on jobs and a 5 billion euro ($5.54 billion) investment plan in Italy following the group’s planned merger with French rival PSA (PEUP.PA).

FILE PHOTO: The logos of car manufacturers Fiat and Peugeot are seen in front of dealerships of the companies in Saint-Nazaire, France, November 8, 2019. REUTERS/Stephane Mahe/File Photo

The meeting at Fiat Chrysler’s Mirafiori plant in Turin follows confirmation on Wednesday that the two groups had agreed a binding $50 billion tie-up to create the world’s fourth-largest carmaker.

“They assured us that all 400,000 employees of the new group would be guaranteed. There will not be redundancies,” said Rocco Palombella, head of the UILM metalworkers union.

The two groups have targeted 3.7 billion euros in cost savings from the merger but have promised that it will not lead to plant closures.

The French and Italian governments have welcomed the tie-up but are keen to see jobs protected.

Francesca Re David, leader of the FIOM-CGIL labor group, one of the most important union bodies representing the company’s workers, said before the meeting that “not shutting down plants does not mean guaranteeing job levels”.

However labor group representatives said not only had management promised to avoid redundancies, they had also pledged to get all group employees off special furlough arrangements and back to work by 2022.

In addition, a 5 billion euro investment plan for Italy by 2021 would be maintained, with most of the investment coming next year.

“What we gathered was that absolutely nothing will happen for a year but in 2021 decisions will be taken on platforms, motors and technology,” Palombella said.

However Re David, whose union has taken a harder line than the other labor groups, said her group wanted to see new models to ensure workers would be taken out of the so-called “cassa integrazione” wage guarantee fund for furloughed employees.

“Industrial plans have never been respected in the past. We have a lot of worries. The announcements on new models are positive, but we’ll be vigilant about the implementation of the plan,” she said.

Marco Bentivogli, head of the Fim-Cisl union, said unions would work to agree how to select a worker representative for the board of the combined group.

“It will have to be a representative authorized to represent the interests of the workforce and not chosen by the company,” he said.

Under the merger agreement, two labor representatives, one from the Italian side and one from the French side, will sit on the 11-member board of the combined company.

Reporting by Giulio Piovaccari; Writing by Silvia Aloisi; Editing by Jan Harvey

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