What will happen to Fiat’s factory in Kragujevac?

Last year, the workers of Fiat’s factory in Kragujevac worked a total of about 50 days, and when absent from work they received 65% of their salary.

At present, as trade union representatives say, only vehicles that have been previously ordered and paid for are produced, while the market’s interest in the 500 L model has obviously been declining for almost two years now. A meeting with representatives of the management of Stellantis, a joint venture of Fiat and Peugeot, is scheduled for this week at which the company’s future will be discussed.

The Serbian workers from Fiat’s factory have received an offer to work in Slovakia (3 months) and the trade unions demand that the departure of the employees be done on a voluntary basis and insist on the respect of the law on temporary work abroad.

The president of the Federation of Independent Trade Unions in Kragujevac, Jugoslav Ristic, told Euronews Serbia that the move by the leadership is a clear message that the company, which 33% of the capital is state-owned, does not intend to expand production in Serbia. Ristic says that nothing is officially known about the future of the Kragujevac factory and that right now employees work only 4-5 days a month.

In November, the President of Serbia, Aleksandar Vučić, had announced at a press conference that the Prime Minister, Ana Brnabić, would reveal news about Fiat’s business in Kragujevac, without divulging too many details.

He did admit that the company had reduced its production and that it used to be the No 1 exporter in the country, having contributed significantly to Serbia’s GDP since 2013, but that now things had changed and that Fiat was far behind other major investors.

Foreign investment consultant Milan Kovacevic says that the state’s contract with Fiat was originally limited to 10 years and that both the company and the state have committed to certain conditions of the contract, which have never been publicly released. Kovacevic also underlines that if the Kragujevac factory did not start producing a new model of Fiat, it would probably close down.

“This is obviously the time when they’re going to have to decide what to do. There are more options available. It could be that production costs are lower somewhere else. Also, the poroduction has slowed down because of issues with parts globally, and a lot of people are saying that all new models should be electric. We don’t know what their decision will be, but if nothing changes, the factory might not survive,“ Kovacevic notes.

He believes that Fiat and the Serbian government could also sell the Kragujevac plant if the Italian company has no interest in being in Serbia any longer.

The president of the Independent Trade Union at Fiat, Sasa Djordjevic, told Euronews Serbia that the situation should be clarified soon, as meetings with the factory’s management and the Kragujevac municipal administration are planned.

“We are concerned about the future of the workers who are going to Slovakia, but also those who are staying here and we want the authorities to give us answers.  Currently, vehicles are being produced for a known buyer and they have already been sold and paid for. This model has been produced for ten years now and it is clear that the demand for it is now very low, as automotive companies usually launch new models every three or four years,” says Djordjevic.

There have been speculations recently that a new Fiat model could be launched in the second half of next year, which would require around one billion euros of investment. Reportedly, Fiat has propositioned the Serbian government to participate in the financing of this endeavour.

(Blic, 15.02.2022)



This post is also available in: Italiano

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