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by Alex Gibson

Fiat CEO Sergio Marchionne says the car maker will pause all investments into the development of new models after an Italian court last week ruled the company’s labour relations to be unconstitutional.

The court case considered a clause in Italy’s labour relations laws, which date back to the 1970s, preventing metalworker unions from representing Fiat employees.

Marchionne told Reuters he was open to meeting with union leaders to discuss what measures could be taken, so long as Fiat’s existing labour contract, developed in 2011, was not revised.

The investments of Fiat and sister company Fiat Industrial are crucial for Italy’s economic recovery, as the country has been in recession for the past two years and is facing record unemployment figures. From 2004 to 2012, Fiat and Fiat Industrial invested 23.5 billion euros ($32.7 billion) in Italy.

The hold on investments could also affect Fiat’s latest attempt to reintroduce Alfa Romeo back into the US, at one point scheduled for late 2013, but whose precise date is now unknown.




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