NF500 / tychy

Following on from previous difficulties that have dented the production and reputation of the Fiat 500, manufactured at Fiat’s plant in Tychy Poland, yet another spanner has been thrown in the works, which, ironically, was part of a solution to previous strike threats from workers over pay and conditions.

Parent company Fiat has been instigating upgrades and improvements at the Tychy plant, one element of which was designed to instil a sense of pride in the workers’ association with the Italian car manufacturer. At the entrance to the plant, pictures of historical Italian figures and events have been placed, and the menu at the canteens has been upgraded and improved.

This, however, is apparently the source of the current unrest. When the “Itialianization” of the plant lead to traditional favourites such as beetroot soup and steam softened beef tongues were replaced with minestrone soup and spicy meatballs with spaghetti, the workforce saw this as a step too far and have downed tools until a resolution to this catering catastrophe can be negotiated.

Fiat’s spokesman in Poland, Mr Ingannare, has been quoted as saying

Italian cuisine is the finest in the World, and while we accept and value the tradition of our Polish workforce, we will not back down on this matter, even if it regrettably leads to some customers Fiat 500s being delayed by a few weeks. Eventually we are sure the Polish workforce will learn to love our great Italian dishes now on offer, in which we’ve invested a great deal of time and money as part of our ongoing improvement programme at the plant.

Good news for those waiting for a diesel engine new Fiat 500 to arrive, production is about to restart. Although some cars appear to have made it to dealers which will need work to rectify this issue, the numbers affected seem miniscule, and delays are expected to be minimal, regardless of your Fiat 500 order status.

Full Fiat group press release follows:

The anomalies related to an externally-supplied component of the 1.3 Multijet engine have been resolved and on Saturday production of the engines resumed in the Bielsko Biala plant in Poland.

Production of cars that mount this engine will regularly resume within Tuesday February 26.

The suspension of production activities involved certain production lines of the Mirafiori, Melfi, Termini Imerese, Tychy and Bursa plants, where models equipped with 1.3 Multijet engines are produced. All these plants will resume normal activity within February 27.

The Company made every possible effort to speed up controls and adaptations that became necessary as well as to reduce delays in delivery to customers to the minimum.

Although Fiat is aware that this suspension of production, which has now been resolved, will have repercussions on its delivery volumes for the month of February, it nonetheless decided to adopt an uncompromising and rigorous approach so as to guarantee the highest levels of product quality to its customers.
Despite the cost that these measures will have, the Group confirms its targets for 2008.

Fiat has halted production of the 1.3 Multijet Diesel engine, as fitted to the Fiat 500, as a result of ‘anomalies’ in an externally supplied component. This means further delays for those waiting to get hold of their Diesel Fiat 500s.

Full press release from Fiat follows:

As a result of the constant quality controls carried out on all the components of Fiat Group Automobiles cars, a number of anomalies have emerged with
regard to an externally-supplied component for the 1.3 Multijet engine.

In order to verify that this supply of components meets the quality standardsrequested by Fiat, the Company has decided to suspend production of the
engines and cars on which they are mounted.

This decision has led to the suspension of production in the Bielsko Biala plant, where these engines are manufactured, as well as at certain production lines of the Mirafiori, Melfi, Termini Imerese, Tychy and Bursa plants, where models equipped with 1.3 Multijet engines are produced.

The Company is making every possible effort to speed up controls and adaptations that could become necessary, so as to reduce delays in delivery to
customers to the minimum.

Although Fiat is aware that this suspension of production will have repercussions on its delivery volumes for the month of February, it has
nonetheless decided to adopt an uncompromising and rigorous approach so as
to guarantee the highest levels of product quality to its customers.

Reports made today are quoting Luca De Meo, head of group marketing, saying that Fiat project producing the maximum number of new Fiat 500s possible next year, with production at the Tychy being stretched to its predicted maximum of 150,000 vehicles.

De Meo is quoted by various sources as saying

We have already raised the production targets for the new 500 and we are going to the maximum production capacity. We are examining the possibility of increasing it…

We have spoken of 120,000 units and the possibility of rising to 140,000-150,000. I believe that we will use all of it

Earlier, De Meo said in a newspaper interview that 500 orders have risen to 80,000, from a 75,000 figure recently cited.

Over 500 people have been hired at the Fiat car factory in Tychy, Poland, in the past six months in order to meet production demands for the new Fiat 500.

According to Fiat Auto Poland spokesman Boguslaw Cieslar employment in the factory may as much as double when the new Ford Ka starts rolling off the assembly lines.  When the factory reaches its target capacity in 2009 it will turn out half a million cars a year, becoming one of the largest Fiat production sites in the World.

This year’s plan envisages the production of 366,000 units, 58,000 more than in 2006.  The factory turned out 205,000 cars during the January-July 2007 period, 16,000 more than in the same duration last year.

In autumn the new 500 will hit Fiat dealerships in Germany, Spain, Portugal and Poland, and next year in Britain and other markets.

Following on from our recent report of workers at the Polish plant producing the new Fiat 500 threatening strike action, it has emerged that managers at Fiat’s Polish auto division will meet with workers’ representatives next week in an effort to prevent the wage claim from escalating into a walk out.

Wanda Strozyk, senior delegate for the NSZZ Solidarnosc union at Fiat’s Tychy factory, and regional Solidarnosc vice president Rajmund Pollak told Dow Jones Newswires that the union is calling for a 100% increase in the minimum monthly starting salary at the plant, raising it from around 1,400 zlotys - or about €373 at current exchange rates - to 2,800 zlotys..

The meeting at Tychy, in southern Poland, is likely to take place July 17, they said.

Fiat officials confirmed the talks will take place next week, saying the company is approaching the meeting in a constructive manner and that the talks are part of normal negotiation processes of the type it has with its workers in many countries.

In a preliminary meeting held July 12, the union officials said Fiat managers proposed offering the plant’s workforce a one-off bonus for the successful launch earlier this month of the 500. The Turin-based company says it has already taken 40,000 orders. Fiat’s representatives didn’t say how big the bonus might be, the union officials said.

Management also offered a Christmas bonus, which will likely be higher than that paid in 2006, according to the union officials, and agreed to a union request that the speed at which the plant’s assembly lines move is monitored to ensure it doesn’t accelerate during shifts.

Solidarnosc’s Strozyk said,

The goal is not to go for a strike, the goal is to have a constructive dialogue,

acknowledging that there’s room for compromise and that a series of smaller wage increases phased in over time might be acceptable to the trade union.

But we’re prepared for it, we have the capacity to organize protests, including strikes. We want to see what management’s strategy is for getting to 2,800 zlotys.

With further meetings expected around the end of August, any strike action wouldn’t likely take place before September. Solidarnosc is one of seven unions recognized at Fiat’s Polish operations - which include another auto plant at nearby Bielsko-Biala - and it isn’t clear to what extent any action would be matched by other unions.

Disruption in production at the Tychy plant would come at a delicate moment for Fiat: the success of the 500 is a key part of its plans to consolidate on its recent return to profit after years of losses in its auto operations.

The Wall Street Journal has published a thoughtful, and perhaps thought provoking article on the new Fiat 500. Focusing on how and where it could succeed and fail, and what could be the making or breaking of the new small car.

The article draws attention to the juxtaposition of Fiat, known for their finesse in producing small low cost cars, their factory in Tychy Poland and the relatively cheap labour, and the concept of making the 500 a “Premium Small Car”, charging an excess for style and individuality in the process.

They draw the obvious comparisons between the Fiat 500 and the MINI Cooper, both small cars, both offering a unique style, character and history, but being produced by very different companies. The 500 being built in Poland on a platform shared with the low-budget Fiat Panda and forthcoming new Ford Ka, while the MINI is produced in the UK, with relatively high production costs, on it’s own purposely developed chassis by parent company BMW, who hold a reputation for production larger premium vehicles.

You can read the full article on the Wall Street Journal Website here.