February 29, 2016 / 9:15 PM / 2 years ago

Launch of Maserati SUV brings hope to Turin car workers

TURIN, Italy (Reuters) - Hundreds of workers from Fiat’s sprawling Mirafiori plant in the Italian city of Turin hope Maserati’s first sport-utility vehicle will finally change their fortunes for the better and end years of layoffs.

An FCA worker is seen in front of Mirafiori plant in Turin, February 24, 2016. Picture taken on February 24, 2016. REUTERS/Giorgio Perottino

Fiat Chrysler Automobiles (FCA) FCHI.MI started production of the Maserati Levante on Monday, a vehicle which is part of its strategy to use spare capacity in Italy to make high-end cars for export, and compensate for lost sales at home.

For Giuseppe Baldari, 49, the luxury Maserati to be unveiled at the Geneva car show on Tuesday and reach European dealers in May has already brought some solace.

Hired by Fiat in 1987 to ferry materials to the busy assembly lines in Mirafiori, Baldari was temporarily laid off in 2010 - kept on the books but only earning a fraction of his salary and spending much of his time at home.

But in December he was back full-time at FCA test driving the long-awaited Levante SUV and he is now part of a new department at the company devoted to testing new models.

“I can finally bring a full pay check home at the end of the month and that’s a huge comfort,” Baldari said.

Near Mirafiori, a vast plant that was Italy’s industrial heartland and once employed 50,000 people on its assembly lines alone, furloughed workers spoke of holidays put on hold and long waits between calls to do an extra day’s work here and there, to top up a basic monthly net pay of some 800 euros ($875).

“When you wake up in the morning and don’t know what to do ... you feel useless,” said an emotional Giovanni Comparetto, a father of two. “I had to rely on others to send my daughter to university and let me tell you, that’s not pleasant.”

Comparetto joined Fiat in 1988 and, like Baldari, was put on furlough in 2010. A few days a month, he now helps assemble the Alfa Romeo MiTo, the only other model in production at Mirafiori and he hopes to be called in to help with the Levante.


Fiat, and now FCA, used furloughs - where workers stay home and are paid a portion of their salary - to cut costs and avoid overproduction and permanent layoffs. But what was meant to be a short-term solution ran for years, as the financial crisis choked car demand and delayed investment.

Salaries dropped by a third, some workers were unable to pay their mortgages and others had to use up their life savings. So for the roughly 4,000 assembly line workers at Mirafiori the all-wheel-drive Levante is the first good news in years.

Inaugurated in 1939 on the outskirts of Fiat’s home city of Turin, the importance of the Mirafiori plant diminished as it shifted some production to the south of Italy, and some abroad

While Turin was Fiat’s nerve center for more than a century, the center of gravity for the world’s seventh-largest carmaker has gradually shifted across the Atlantic, not least through its buyout of U.S. rival Chrysler and a Wall Street listing for the combined group in 2014.

FCA’s North American operations accounted for nearly 85 percent of company profits last year and the future for its underused plants in Italy has long been precarious.

Chief Executive Sergio Marchionne is now betting on the production of higher-margin vehicles - luxury Maseratis, sporty Alfa Romeos and rugged Jeeps - in Italy for export.

The strategy is already bearing fruit at FCA’s Melfi plant in southern Italy which is running at full steam, helped by strong demand for the Jeep Renegade and Fiat 500X crossover.


For Mirafiori, though, questions remain, especially after FCA last month again delayed some investments meant for Italy due to tough markets.

FCA invested 1 billion euros to prepare Mirafiori for the Levante, but the SUV comes late to an already crowded party, and analysts wonder whether it will be unique enough to lure buyers away from rivals such as the Porsche Cayenne.

The love affair with SUVs and their higher ground clearance have also prompted Lamborghini, Aston Martin and Rolls-Royce to seek to compete in the popular segment.

Analysts expect the Levante to cost 70,000 euros to 140,000 euros ($76,000-$152,000), similar to the Cayenne, but wonder whether the Maserati SUV will stand out sufficiently to match the success of its long-standing German rival.

Forecaster IHS Automotive said while the Levante will help boost Maserati’s visibility, it sees the model as a “minnow in the market place”, with annual sales peaking at around 17,000.

Maserati’s poor track record also hangs over the launch. Weak demand in the United States and China dragged the brand’s sales volumes down 11 percent last year and its operating profit margin more than halved to 4.4 percent.

Marchionne has promised to put all employees on furloughs back to work eventually, but has yet to announce what other model will come to Mirafiori after Levante, nor when.

Workers realize that even at full production the SUV will need 1,500 workers at most and some 2,000 will remain idle.

“After delays to several plans and still no clarity on a second model for Mirafiori, we are very worried jobs will be at risk,” said Nina Leone, a representative for the FIOM union.

Some workers said they were preparing for the possibility they may remain on furloughs until retirement.

“The Levante will help, but it will not be a major boost to the economic and social life of this city,” said Giuseppe Berta, a professor at Milan’s Bocconi University and the former head of Fiat’s archives.

Editing by David Clarke

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