There was no Christmas present for the workers at Fiat's threatened Termini Imerese factory in Sicily in Sergio Marchionne's new two-year industrial plan despite him targeting a 50 percent hike in production for Italy.

There was no Christmas present for the workers at Fiat’s threatened Termini Imerese factory in Sicily in Sergio Marchionne’s new two-year industrial plan, despite him targeting a 50 percent hike in production for Italy.

Marchionne emphasised in the presentation that the production landscape had to change, with the six plants in Italy currently producing a combined 650,000 vehicles annually while employing 22,000 staff.  He said this contrasted unfavourably with the Tychy plant in Poland, which turns out 600,000 vehicles with 6,100 staff, and the Betim factory in Brazil, which builds 730,000 vehicles and has 9,400 staff.

Marchionne was also categorical that the century-long close link between Fiat Group and the state, where the national carmaker is seen as much more than just a commercial business – and is rather a vibrant symbol of the country with an important role in the social fabric of Italian life – no longer applies. It severs the bond that the Agnelli family built. “Bearing the burden of the social problems at Termini is not Fiat’s responsibility,” Marchionne bluntly told the government representatives and unions assembled in Rome yesterday, adding: “It wasn’t before and it isn’t now.” The signs are that the Italian government, which has been pushing Fiat hard to raise Italian production levels, is prepared to accept the closure of Termini Imerese in exchange for this, although industry minister Claudio Scajola drew out lines when he recently said that Fiat would be “crazy” to close the Sicilian plant.

“We announced already in June that the plant in Sicily will cease producing cars in 2011,” Marchionne said. "Let me be clear: the quality of the work and the commitment of the people there is not in question. There were other considerations. The industrial activity at Termini Imerese was always severely hindered by the plant’s intrinsic competitive disadvantages. There is practically no local supplier base. The logistics costs are enormous. Producing a car at Termini Imerese, as you know, costs as much as €1,000 more. There are structural issues which represent a continuous drain on resources. Over the past few months we have sought, internally, an industrial alternative for this site. However, we always encounter the same obstacle: a cost structure which would render any of Fiat Group's products unfeasible. We have to be extremely honest on that point. Any company anywhere in the world - Fiat included - has the right and even the duty to make rational industrial choices. The right and the duty to make decisions autonomously, focusing first and foremost on what is best for the company, for its competitiveness and for its future development. Fiat has always exercised this freedom in a responsible manner, as long as it didn’t mean compromising its own future. We have borne the operating losses from the plant in Termini Imerese for many years. The broader context was completely different, however, and it enabled us to absorb the enormous costs associated with operating this plant. Today we can no longer afford to do so. Globally, the conditions of the economy and the market have completely changed. Competition is putting companies to a severe test, often forcing them to make difficult choices.

“Here we also need to be honest: bearing the burden of the social problems at Termini is not Fiat's responsibility. It wasn’t before and it isn’t now.  It is a burden which rests on the shoulders of the entire system. When the markets react in such an extreme manner – as in the current crisis – the response has to be collective. The model for social development which we have embraced – in Italy as in the rest of Europe – means exactly that. It means guaranteeing protection when markets undergo structural changes. It means that every citizen should be able to count on a security net when markets react in such a brutal manner. We are perfectly aware of the social consequences that a plant closure would have. We fully understand how the workers at Termini Imerese feel. This is an issue which requires the energies of the entire system. We are prepared to do our part, if everyone else does theirs.  We stand fully ready to help and offer support for any proposals to convert the site which may come from the Region of Sicily, other public institutions or private groups. We stand ready to collaborate in securing a solution which will continue to provide employment for the workers at Termini once the production of automobiles has stopped. We even stand ready to make the plant available for a project which will provide job security for our employees.”