Workers occupy Milan factory after Leyland orders closure

By Piero Valsecchi, Associated Press writer

MILAN, Italy (AP) - Workers occupied a Milan auto factory Wednesday after the financially troubled parent company, British Leyland, decided to close the plant and liquidate its Italian subsiduary. The 4,500 workers at the Leyland - Innocenti plant, which made Mini Morris cars, took control at the beginning of the second work shift in the afternoon.

Unions called the action a permanent shop assembly and said it was done to prevent the auto maker from removing equipment and stocks. The workers blocked its entrances to keep anyone from carrying away the machinery and thousands of Morris cars it produced that are parked inside. Union spokesmen said the workers had no intention of operating the plant on their own, as has hapened at some smaller Italian factories. They urged the Government to arrange for an Italian private or public group to take over the plant and change production to something besides the Mini cars it now makes.

British Leyland, one of the world's 10 largest auto makers, announced its decision in London following the breakdown of talks between Leyland-Innocenti and the Italian government and union officials about trimming Innocenti's workforce to 3,000. Leyland-Innocenti is reported to have acumulated losses of $37.5 million for the first nine months of this year as a result of rising costs, falling Italian sales and reduced productivity.

"The situation has been reached", the London announcement said, "where, during the past year, Leyland-Innocenti has lost its entire share capital, including a reinforcement of 15 billion lire (more than $22 million) made in July 1975."

Italian government sources said that the stiff opposition of the Italian metal workers union to Leyland-Innocenti's proposal to fire one third of the workers was a key element in the company's decision to stop its activities in Italy. Unionists, however, criticize the Italian government for entering the negotiations to late. British Leyland said negotiations are in progress "with third parties" to continue production of models made by Leyland-Innocenti. The Italian press carried unconfirmed reports that Japans Honda Motor Company might take over the Milan plant.

British Leyland took over Innocenti, already producing Mini cars under the Leyland licence, in 1972. Initial results were positive and the company was planning to increase output. But the recession set off a crisis in the Italian auto industry.