Fiat to Lay Off One-Third of Workers at Polish Plant

VIENNA – Amid falling demand in Europe, Fiat Auto Poland plans to cut 1,500 employees, or about one-third of the total workforce, at its plant in Tychy, Poland.

Fiat Poland is the country’s largest auto maker, and the Tychy plant is Fiat's largest in Europe. The jobs will be lost when the the third shift is eliminated by March.

“This year’s output will not even reach 350,000 units – compared to more than 600,000 cars in 2009 – and, based on current market forecasts, it is expected to be below 300,000 units in 2013,” Fiat Poland says in a statement.

The factory manufactured 467,760 cars last year.

Unions are pressing Fiat Poland management to offer voluntary departures instead of mass layoffs. Of the 4,967 people employed by the auto maker at the end of October, 4,625 worked at the Tychy plant.

In addition to the weak market in several European countries, another problem facing the Tychy facility is that it lacks a new model which would improve the plant’s utilization.

Fiat used to build the successful Panda model in Poland, but production of the car’s next generation has been transferred to Italy. The Tychy plant received production of the new Lancia Ypsilon, but volumes of that model are significantly lower.

In 2013, the Tychy factory will continue to manufacture the Ypsilon as well as the  Fiat 500, its sporty Abarth-badged version and the Ford Ka. But with production of the previous-generation Panda being phased out at the end of this year, operations are being scaled back.

Fiat CEO Sergio Marchionne has admitted the decision to move new-generation Panda production from Poland to Italy was based on political factors.

Polish media are pushing the government for action. Deputy Prime Minister and Economy Minister Janusz Piechocinski says the government wants “to talk to the owner of Fiat Auto Poland unit on deep and significant correction of the announcement to cut 1,500 workers."

However, no one believes Fiat will change its mind significantly.

Fiat is the second auto maker to announce a production cutback at a Polish car plant recently. General Motors Mfg. Poland eliminated the third shift in some parts of its plant in Gliwice at the beginning of December. However, in contrast to Fiat, no layoffs of Polish workers currently are planned.

GM and its unions have signed a supplemental agreement on existing contracts that regulate employment. The agreement states work-time reductions will not lead to layoffs before Jan. 1, 2015, and all temporary positions will be extended.

About 300 employees will be transferred temporarily to other GM plants. According to Mariusz Krol, chairman at the Solidarnosc union at GM Poland, they will work mainly at the Opel facility in Eisenach, Germany; the Isuzu Motors Poland engine factory in Tychy; and Opel’s engine and transmission plant in Vienna.

According to the agreement, a third shift at Gliwice will be reinstated as soon as the annual plan reaches 150,000 vehicles. This is expected to happen with the production launch of the next-generation Opel Astra.