Fiat to lay off 5,300 at Mirafiori

Reuters is reporting that Fiat and its unions reached an agreement yesterday to put about 5,300 workers at the Mirafiori plant on a temporary layoff plan that could last up to 18 months. Reuters’ sources said the furloughs will begin April 2.

The layoffs were expected due to the decline of the new vehicle market in Europe.

“We signed an agreement for 18 months of temporary layoffs for all workers, which will be approved on Friday by the regional government of Piedmont,” said a union source. “Work to install new equipment on the new assembly lines will start during the first half of this year.”

Fiat will continue building the Alfa Romeo MiTo, Fiat Idea and Lancia Musa at Mirafiori.

Fiat has said Mirafiori will get new Fiat SUV at the end of 2013, and a Jeep-branded SUV starting in the second quarter of 2014.

GM looking for more layoffs

Even as Republican Presidential candidate Mitt Romney was accusing the Obama Administration of forcing General Motors to close plants and shed personnel, the General has been busy demonstrating it needs no coercion from anyone to slash payrolls.

GM has been cutting white-collar headcount in small doses – a dozen here, a dozen there – in an effort to improve its profit margins. GM’s most recent margins were about five percent, but CEO Dan Akerson believes GM should make at least the same EBIT margins as Ford and Volkswagen.

Now Bloomberg is reporting that GM has hired the Hackett Group of Miami, Florida, to advise it on ways to cut staff and improve efficiencies in its headquarters and other operations.

One wonders if real cost-cutting wouldn’t preclude hiring an outside company to identify who can be let go.

In the most recent quarter, GM reported profits of $1.7 billion, down 15 percent from Q3 of 2010, due to losses in its European and South American operations. GM’s income was generated by $2.2 billion in North American profits and $365 million from China. In addition the results were impacted by the payment of $200 million in preferred stock dividends and rising costs for materials and new vehicle development.

Since European laws make mass layoffs and plant closings more difficult, GM is looking for ways to cut jobs in North America.

The company says every $1.5 billion it cuts from its cost structure means an extra one percent in margin.

In 1979, General Motors employed about 835,000 people worldwide. As of 2011, company figures show the headcount has been reduced to 202,000, a reduction of nearly 76 percent.

GM’s largest-ever layoff announcement, covering 47,000 jobs, came in February 2009, shortly after Barack Obama was sworn in as President. The cuts were part of a plan presented in December 2008 to the Bush Administration. The layoffs were carried out during the Obama Administration but had been put in place earlier. GM’s second-largest layoff – 25,000 employees – came in June 2005.