An assembly line producing the Fiat Panda in Tychy’s plant (Poland).

Gone with the Fiat

Modern and productive, the Tychy factory was once Fiat’s flagship site, but in the face of the debt crisis, the Italian automaker has decided to bring production of the popular Panda back to Naples. For the Polish workforce, this means a wave of redundancies in late January, and disillusionment is the order of the day.

Published on 23 January 2013 at 12:20
An assembly line producing the Fiat Panda in Tychy’s plant (Poland).

Franciszek Gierot hoped this would never happen again. We are chatting over a cup tea in the restaurant of Corona Hotel, not far from the Fiat plant. The weather seems fitting – gusty wind is hurling sleet against the windows and the clouds hang so low you could touch them. A poor start to the year.

In his car – a black Lancia Delta – Mr Gierot has left the letter he brought from the management office at Bielsko-Biała listing the members of the WZZ August ’80 trade union who will soon be made redundant. He is the leader of the union and similar envelopes were handed over to the leaders of the other unions active at Fiat’s Tychy plant.

Mr Gierot knows what’s next. The numbers leave little room for doubt. There were times when the plant churned out as many as 2,300 vehicles per day, one leaving the assembly line every 37 seconds. In 2012, the figure fell to 1,600 and it is expected to hit the 1,000 mark this year. This means that a whole assembly line becomes redundant. Of the plant’s 4,900 employees, 1,450 are to lose their jobs.

The golden era

For two decades, Silesia has been crippled by high unemployment and sudden economic downturns, so the situation should be nothing new.

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But during Fiat Auto Poland SA’s golden age of 2009, six cargo trains and 350 lorries would leave the premises each day to ship the vehicles to various international destinations. Output is up 20 per cent on the previous year and the Tychy facility manufactures as many vehicles as Fiat’s five Italian assembly plants combined.

Nearly half of production is the Panda. The nearby Corona Hotel, where we are sitting with Mr Gierot now, is always full of foreign guests, Pietro, a chef from Verona, runs the kitchen, and no one in this land of roulade and red cabbage raises eyebrows at spaghetti frutti di mare. The employees hear all the time that Tychy is the group’s flagship plant, the most efficient and productive of all its European operations. Work goes on in three shifts and overtime is well paid. Some 6,000 people work here and the number of jobs at suppliers is estimated at 30-40,000.

Few Fiats in the car park

The unions recognised three years ago that the golden era would not last forever, although production was still at full steam at the time. In early 2010, August ‘80 wrote a letter to the then Economics Minister, Waldemar Pawlak, warning that a slump was imminent and Fiat was planning to relocate the production of Panda back to Italy.

Despite union appeals for intervention, the ministry replied it could not interfere with a private company which was free to make its own decisions.

Meanwhile, Fiat is intensely negotiating with the government in Rome. A decision is made: the new Panda will be manufactured in Italy. The Fiat management board makes it clear it would prefer to continue production at Tychy, but the view prevails that in hard times the company should support its home country first. Mood at the plant deteriorates. A welder who prefers to remain anonymous says: “About two years ago someone damaged a whole bunch of cars. The bodies were scratched, the wires torn out, and they even crapped on the floor of one car. They left a note saying: ‘You pay shit. You get shit’”.

Throughout 2012, the management sheds redundant personnel in parties of 29 to avoid falling under the “group layoff” category, which begins with 30 jobs.

‘Tightening the screw’

When Franciszek Gierot is finishing his tea, a man who would only introduce himself as Andrzej (“Silesia is a small place,” he explains) is coming back home from a shift.

Some time ago he left Fiat and got a job at one of the local coal mines. The pay is decent, but you need to be a walker because if they assign you to a faraway face it’s 6km, and that is through the mud. Andrzej, who spent several years working at Tychy, says, “Sure, up to a certain time things were okay. But then they started tightening the screw. Productivity bonuses were slashed. When there was no work, they forced us to take leave. I left the place because I started feeling like I was in a labour camp rather than a normal factory. Mining coal is less tiring, and the stress is less.”

General strike looming

Workers at the factory say, of course, that the unions could have done more. They say that they should have pressed the management more firmly, threatened a sit-in, that the union leaders are too conciliatory. Hearing this, Mr Gierot asks whether it is the unions that should be persuading clients to scrap their old cars and buy new Fiats. “We’ve done our best in the last three years and we’ve really achieved a lot,” he says.

The number of job cuts has been reduced by 50. Those who agree to leave by end of January will receive, depending on seniority, from nine to 18 months of wages.

Pre-retirement employees and single parents will not be laid off, and in the case of married couples one of the spouses will retain their job. When production picks up again, former employees will be the first to get jobs. “The cuts are here, but the plant will continue,” says Mr Gierot. But what about suppliers? Those heavily reliant on Fiat’s orders will need to shed jobs too. What does the government say to this? The Minister of Labour and Social Policy, Władysław Kosiniak-Kamysz, has promised to assign reserve funds from the Labour Fund to local employment offices, and the city of Tychy has offered help too. But this may well prove belated.

There are plans for a general strike in the whole region in February, which would be the first such occurrence in decades.

In Europe

The auto sector is in crisis, except in Germany

The European automobile market "experienced the greatest fall in annual new car sales in two decades," reports British financial daily the Financial Times. According to figures released by European car dealerships, 12.5m new cars were put on the market in 2012, a drop of 8.1 per cent compared with 2011. The downward trend is expected to continue in 2013.

The crisis in the European auto sector has led to layoffs, even plant closures in Belgium, the United Kingdom, Poland and especially France, notes French daily Le Monde. "In 2005, PSA Peugeot Citroën and Renault were top of the heap with 25.5 per cent of the European market share" notes Le Monde. But times have changed.

Seven years later, it's a total turnaround. With its 25 per cent share of the market, Volkswagen looks down at its French competitors, who now sell only one out of five cars sold in Europe, struggling in the current automobile sector crisis.

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