Negotiations between the Fiat Group's senior management and the main unions that represent workers at the factory have run aground in recent weeks and the Italian carmaker is anxious to get agreement nailed down as production of the next-generation Panda looms on the schedules. The plant, renamed as Giambattista Vico after a partial re-fit a couple of years ago, was built at the beginning of the 1970s by the then-independent Alfa Romeo to manufacture the Alfasud and its coupé derivative, the Sprint. In recent years its importance has waned, the Alfa 147 which slots into the vitally-important C-segment was built at the factory until recent months but its successor, the Giulietta, is now built at a factory where it is assembled alongside Fiat and Lancia models that share many of its underpinnings and mechanicals, so that leaves the Naples factory with just the Alfa 159, 159 Sportswagon and the niche GT Coupé. Last year it assembled just 35,000 cars and spent many months with the workers sent home under the government-sponsored temporary redundancy scheme.

With an unbending hard line on the planned closure of its Termini Imerese factory in Sicily, Fiat has backed away from axing the Naples plant and instead has proposed to switch Panda production to the site from its current home at Tychy in Poland, but is looking for major compromises in working practices from the unions before giving the green light to a major 700 million euro investment.

"The survival and future success of the plant is dependant on the level of competitiveness achieved and maintained over time in terms of cost, quality and speed of response to the market," Fiat said in a statement issued after the last round of talks at the end of last month resulted in very little progress. "Everyone involved must demonstrate the courage to make a fundamental change in the approaches and behaviours of the past, which are incompatible with the challenges of the future. To guarantee a future for Pomigliano d'Arco and Fiat's manufacturing activities in Italy, it is essential that plants be more efficient and more competitive. The new proposals from Fiat represent the minimum level at which it can ensure it plays more than a marginal role internationally. Failure to come into line with the best industrial standards would be extremely restrictive to operation of the plant, placing its future in peril. Fiat cannot risk the launch of such a key product as the Panda by entrusting production to a plant that is uncompetitive," the Fiat statement, issued on May 28, concluded.

Yesterday two key union leaders were striking a more concilatory note ahead of a fresh round of talks today. "Ware absolutely interested in going forward with these negotiations," FIOM union Secretary General Maurizio Landini said while Raffaele Bonanni, who holds a similar position with the CISL union told Italian newspaper La Stampa: "If it is true that Fiat says time is running out I say, let us not lose this chance." The main unions involved in the talks are: FIM, UILM, FISMIC, CISL and UGL.