Fiat Should Add Italian-Made Electric Cars to Plan, Union Says

Italy’s biggest carmaker, should add electric models and hybrids in exchange for continued government incentives, the company’s largest trade union said.

While Fiat is already introducing Multi Air gasoline engines that cut consumption and emissions by at least 10 percent, it could go further, Giorgio Airaudo, a leader of the Fiom CGIL metalworkers’ union, said yesterday in an interview.

“It makes no sense for us to confirm production of old products,” Airaudo said by phone from Turin, where Fiat is based. “The government needs to link incentives to innovation.”

Unions are concerned Fiat may shift production of new models to North America following its alliance with Chrysler Group LLC. Chief Executive Officer Sergio Marchionne has urged Italy to retain payments for scrapping older cars and buying more efficient ones to buoy sales amid the economic slump.

Airaudo, whose union is the country’s biggest, with 370,000 members, said that while Industry Minister Claudio Scajola is right to say Fiat’s plant in Termini Imerese, Sicily, should stay open, the site could be put to better use.

The carmaker said in June it plans to continue production of the Lancia Ypsilon at the factory through 2011 and then use it for “other, non-automotive, production.” The plant is Fiat’s smallest in Italy and employs 1,400 people.

“Over time a lot of investment has been made in that factory and I’m told the quality of production is good,” Scajola said yesterday in Dubai.

Workers from Termini Imerese occupied the town’s city hall on Nov. 18. Scajola visted them the next day and said he’ll take up their concerns when he meets with Marchionne on Dec. 1. to review Fiat’s production plan.

Five Plants

Fiat, Italy’s largest manufacturer and biggest private employer, runs five auto plants in the country, with the workforce totaling 31,000. Marchionne plans to cut production in line with shrinking demand. Fiat says it loses 1,000 euros ($1,493) on every vehicle produced at Termini Imerese.

The company should bring electric-car technology to Italy through its link with Chrysler, Airaudo said.

“There’s no reason to limit the development of electric cars to the U.S.,” he said. “We should be developing new technology that we can sell in Europe.

Fiat already uses electric technology for its delivery vans, a segment where it sees the most demand. Lou Rhodes, who heads Chrysler’s electric vehicle development, has been charged with overseeing the same segment at Fiat, a Fiat spokesman said.