As FINANCIAL TIMES reports, Silvio Berlusconi, centre-right prime minister, on Friday stepped into the storm provoked by Fiat’s decision to switch production from Turin to Serbia by saying the Italian carmaker was free to choose its locations but that he hoped it would not hurt Italian industry. 

Mr. Berlusconi’s guarded comments followed angry statements by some of his ministers opposing Fiat’s plans to shift production.
Sergio Marchionne, Fiat chief executive, stunned unions on Wednesday by announcing that labour problems in Italy had persuaded him to move production of two new models – successors to the Fiat Idea and the Lancia Muso – out of Turin’s Mirafiori plant in 2012.
Production will be shifted to Serbia’s former Zastava plant in Kragujevac, which Nato bombed in 1999 during its Kosovo campaign. Fiat bought a 67 per cent stake in the plant this year with the Serbian government holding the balance.
Mr. Marchionne, at the same time as announcing bumper second quarter results, said Fiat needed stronger guarantees against disruption of production by unionised workers. His comments followed a spate of smallscale walkouts by workers, five of whom were sacked by Fiat.
Sandra Raskovic-Ivic, Serbia’s ambassador to Rome, welcomed Fiat’s decision, noting that Serbia offered financial incentives to foreign investors, including a 10-year tax break and money for each worker employed. In a television interview she also noted that Serbian workers earned 400 euros a month, about a third of Fiat’s Italian workers.
Last April Mr. Marchionne revealed his “Fabbrica Italia”plan to double car production in Italy by 2014. Part of that plan involved the new production in Turin and transferring a new Panda model from Poland to Pomigliano D’Arco near Naples.
On Wednesday Mr. Marchionne said Fiat would first watch how Pomigliano’s workers handled management’s newly imposed labour practices before proceeding with the Fabbrica Italia plan. A ballot of workers at Pomigliano over the new work conditions produced only a 62 per cent vote in favour, much less than Fiat had hoped for.
Workers at Mirafiori belonging to the left-wing union Fiom staged a two-hour walkout on Friday in protest. Fiom had campaigned against the new conditions at Pomigliano saying they breached workers’ rights and the Italian constitution.
Maurizio Sacconi, labour minister, has asked Fiat and unions to meet again on the Italian plan. Mr. Berlusconi said in a “free economy and a free state”, Fiat was free to choose its manufacturing sites, adding that he hoped this would not “be at the expense” of Italy and Fiat workers.
“We will work with unions to bring Fabbrica Italia to completion, but Fiat cannot take unnecessary risks,” Mr Marchionne said on Wednesday. “We need to ensure governability of the plant.”