Striking workers rally at the gates of Termini Imerese in Sicily yesterday as the Fiat Group was gripped by a nationwide walkout of workers protesting at the planned closure of the Sicilian factory.

On Wednesday Fiat was hit by a four-hour strike that halted vehicle production across its six Italian factories as the bitter fight to save the threatened Termini Imerese plant in Sicily continues to ratchet up. The increasingly bitter battle over the Sicilian factory’s future sees Fiat Group CEO Sergio Marchionne and the carmaker's senior management including Group Chairman Luca di Montezemolo and Group Vice-Chairman John Elkann, pitted up against national and regional government and the firm's unions, while on Sunday no lesser authorities figure than Pope Benedict XVI in a public address called for the threatened jobs of workers at Termini Imerese to be safeguarded.

Marchionne is adamant the plant will be closed when production of the current-generation Lancia Ypsilon runs out in less than a year’s time. The smallest of Fiat’s Italian plants with around 1,400 staff, it has no local supplier base meaning components have to be shipped or flown onto the island before the assembled cars are shipped back to the mainland, adding, Fiat claims, an additional 1,000 euros per car to the build price.

However Termini Imerese is located in one of Italy’s worst unemployment black spots and closing the plant, which indirectly employs an additional 1,500 workers local, would cause much local hardship. Unions are angry that Fiat, has chosen to break away from its long tradition of social responsibility, a new strategy outlined by Marchionne in a speech in Rome just before Christmas, especially so as the carmaker is one of the main beneficiaries of generous state subsidies. The unions want the continuation of subsidies to be linked to Termini Imerese's future. The pressure went up a notch yesterday as Economy Minister Claudio Scajola was reported by the AFP news agency as saying that the government was "evaluating" stopping all incentives, including those in the automotive sector which Fiat has said are vital to it making a profit this year.

Last Friday Scajola chaired the first meeting of a special taskforce set up to look at the threatened plant's future, revealing that seven expressions of interest had been received. That government-chaired taskforce will meet again later today. Scajola, who has been outspoken in his preference to see the beleaguered plant remain within the Fiat Group, said yesterday in response to the strike as it gripped Fiat's production: "Fiat clearly needs to overhaul its plants; however, the government believes there is is still room for Termini Imerese plant."

CGIL trade union secretary Guglielmo Epifani said yesterday that the Fiat's workers' four-hour strike "is going well". Epifani also added that "in the days to come we will engage in further talks," saying that in the immediate future negotiating priorities would focus around Termini Imerese as well as Alfa Romeo's Pomigliano d'Arco factory near Naples that currently builds the Alfa 147, 159, 159 Sportwagon and GT Coupé. "Termini Imerese should not be shut down. There is no overcapacity in Italy," Gianni Rinaldini, the leader of the powerful Fiom union told the Ansa news agency. Fiat said yesterday that 14 percent of the workforce took part in strike action while union sources said it involved 80 percent of workers at Termini Imerese and 50 to 70 percent at the Mirafiori plant in Turin.

As well as Fiat's plan to close Termini Imerese, U.S. aluminium producer Alcoa has hit the headlines as it intends to shut a factory which is located on the southern coast of Sardinia. This plant was also mentioned by the Pontiff last Sunday alongside Termini Imerese in his address to the faithful. Following Tuesday's government-chaired roundtable on Alcoa's Italian operations, Scajola warned the US Pennsylvania-headquartered firm yesterday that "they will face due consequences should they opt to pursue with their unwarranted course of action". Alcoa, he added, "is warned that the government will not stand for any unilateral decisions."