Fiat, unions reach deal after three-week pay dispute

Carmaker Fiat and unions representing striking workers at a southern Italian factory have reached a deal to end a three week-long pay dispute which has hampered output across Italy, a union spokesman said on Sunday.
The Melfi plant, normally one of Fiat's most efficient, produces the Fiat Punto car and makes sheet-metal stampings and components for other units. A blockade almost two weeks ago brought Fiat's car output to a virtual standstill across Italy.
Unions, demanding better pay and improved shift patterns, met Fiat executives in Rome late on Saturday for non-stop talks to end the strike.
"The deal was reached overnight. It is based on a raise of 105 euros a month, from the 92 euro raise initially proposed by the company," said Lello Raffo of metalworkers' union Fiom-Cgil.
"On Monday we will put the proposal to the workers' assembly, and they will vote on it on Tuesday."
Fiat Chief Executive Giuseppe Morchio said he was pleased a "sense of responsibility" had finally prevailed and that an agreement "compatible with the goals of cleaning up and relaunching Fiat Auto" had been reached.
"The complete involvement of all parties and people in the larger goal of ensuring an industrial future for the Italian automobile is indispensable," he said in a statement.
The strike, which began on April 19, comes at a difficult time for Fiat, struggling to pull back from the worst crisis in its history. Fiat said last Monday it lost output of some 35,000 vehicles - two percent of annual sales - in the dispute.
Though on Tuesday some output resumed at the plant, which also makes the Lancia Ypsilon, only a slim portion of employees turned up for their shifts and union representatives said production lines remained frozen.
"This is a deal that rewards the workers' fight," Raffo said of Saturday's agreement.
The deal includes provision for a 105 euro per month raise by January 2006, with the first part of that increase coming in by July, and the rest in July 2005 and January 2006. Fiat also allowed alterations to shift patterns, which in the past had included two consecutive 12-hour night shifts.