Fiat has today presented the Italian Minister for Economic Development with the first initiative in the plan announced last December at Palazzo Chigi in Rome to overhaul production operations in Italy, with the Alfa Romeo's long time Pomigliano d'Arco factory near Naples set to switch to building the next-generation Fiat Panda.

As part of an 8 billion investment programme, a comprehensive restructuring of the Giambattista Vico plant in Pomigliano d'Arco will be carried out to prepare it for production of the future Panda, whose commercial launch is planned for the second half of 2011. The Panda is currently built at Fiat's Tychy factory in Poland, which also assembles the Fiat 500, and shifting production will ease demand on a factory that is running at capacity.

The factory has been turning out key Alfa Romeo models since it was constructed in the early 1970s as the home of the Alfasud and it currently assembles the D-segment Alfa 159 sedan and Sportwagon as well as the GT Coupé and has just phased out the C-segment Alfa 147. With the MiTo and the Giulietta both being built in Fiat factories and a rapid decline in demand for the models built at Pomigliano d'Arco, production has slowed to a trickle with many staff being sidelined by the government's temporary redundancy scheme.

A statement issued by the Fiat Group today said that: "Through the investment of approximately 700 million euros, the plant will be equipped with the most modern technology and should achieve a standard of excellence which will qualify it as a World Class Plant. Newly installed equipment will be of the highest technical standard and configured to enable maximum flexibility, including adaptation for the production of future models. This will lengthen the useful life of the technology installed. Significant attention will be placed on organising production according to World Class Manufacturing and World Class Logistics standards to ensure optimisation of the plant's potential. Vertical integration of the production cycle will be increased, resulting in an expansion of the activities carried out internally and greater use of plant personnel. A significant investment in training to prepare employees to operate in the new manufacturing environment is planned. These training activities will take place during the plant renovation and will be closely integrated with the WCM approach.

"However, these measures alone will not be sufficient to bring the plant into line with international best practice," the press release continues, adding: "The most advanced production lines, the best organisation and quality training alone do not guarantee that results will be achieved. To obtain the highest level of quality and productivity, the committed participation of workers, unions and government will be necessary. The basic conditions necessary to respond rapidly and effectively to fluctuations in commercial demand and avoid the loss of valuable opportunities are: maximum utilisation of plant capacity, flexibility in shifts and work days, internal mobility and opposition to irregular forms of absenteeism."