ANALYSIS: The car-maker's plant in Sicily is closing with job losses. What should the government do?
‘TODAY, WE see the closure of an historic plant of an industrial group that has been a flag bearer, both for productive capacity and national identity . . . Medium-sized and big industries simply cannot abandon the country. Excuse me but it is simply not possible for a minister who comes from Turin not to speak of Fiat . . .”
The speaker is newly appointed Italian labour minister Elsa Fornero talking yesterday at a meeting of the Confederation of Artisans.
As fate would have it, one of the first difficult, domestic issues to confront the government of prime minister Mario Monti, sworn in last week, is also one of the longest-running issues in the last 100 years or so of Italian public life – namely labour relations at the nation’s flagship private sector giant, Turin car-maker Fiat.
While Fiat-watchers in the United States have been exercised this week by the fact that singer Jennifer Lopez may have used a “double” for parts of a current Fiat Cinquecento television advert, Fiat-watchers on this side of the Atlantic are again worried about the company’s future in its homeland. The J-Lo ad features her driving a Fiat 500 through the streets of New York city on the way to the Bronx, with her voiceover saying: “Here, this is my world. This place inspires me.”
It turns out that “Jenny from the block” was in fact nowhere near the block when the item in question was filmed; rather she was in Los Angeles while a double stepped in for the New York shoot. Nothing strange about this for a busy celebrity, while the Fiat USA and Chrysler Group doubtless feel Lopez is a perfect embodiment of the new, cool, transatlantic clientele the new company wants to attract.
The problem is that while Fiat’s gradual takeover of Chrysler, begun two years ago, looks very much like the future, Italy, or at the very least certain parts of Italy, are beginning to look like the past.
What exactly is the future for the 70,000 workers employed by Fiat at its six Italian plants? Is it justified to suspect that the evermore multinational Fiat, the world’s sixth-largest car-maker, wants to pull out of Italy?
When Fornero spoke of “industries abandoning the country”, she was referring to the fact that yesterday marked the last full production day at Fiat’s Termini Imerese plant, close to Palermo in Sicily.
The closure of the Sicilian plant, first announced two years ago by Fiat’s Italo-Canadian chief executive Sergio Marchionne, has inevitably prompted bitter polemics.
Fiat and Marchionne argue that the plant, which produces the small Lancia Ypsilon, consistently loses money, given that it costs upwards of €1,000 more per car to produce in Sicily because of distance and infrastructural problems. Sicilian politicians and union leaders argue that, even if this is Fiat’s smallest factory in Italy, it is still absolutely vital for the economy of a region consistently undermined by the activities of the Mafia.
Some 1,600 workers were employed at Termini Imerese with another 600-700 involved in satellite companies.
Fiat, however, is packing up and, for the symbolic sum of €1, the company has sold its 40-year-old site to DR Motors, a small Italian manufacturer which assembles cars for China’s Chery Automobile Company Ltd.
As of now, the fate of the Termini workers is obviously uncertain. DR Motors has pledged to employ 1,300 workers over the next four years and to make investments worth €100 million. The success of the scheme remains to be seen; in the meantime, upwards of 1,000 workers will effectively be made redundant.
An initial meeting at the economic development ministry in Rome this week failed to come up with a “social shock-absorber” package that might mitigate the pain of the impending redundancies. When Termini’s parish priest, Don Ciccio Anfuso, turned up for an emergency union meeting outside the Termini gates yesterday morning, he told the workers and trade union officials: “Fiat has abused this territory and then it has abandoned us.”
Many of those present responded by suggesting that Don Ciccio had come to “administer the last rights”. In the meantime, workers installed a picket line that will block the exit of those cars still in the plant until “an agreement guaranteeing all the Termini personnel” is signed, according to trade unionist Roberto Mastrosimone yesterday.
An unfortunate aspect of the Termini closure is that it comes at the end of a week which began with Fiat announcing it would not be honouring existing “contracts and collective agreements” within the group but wished to draw up new agreements.
In one fell swoop, Fiat had thrown collective, national wage bargaining out of the window, replacing it with plant-by-plant agreements similar to ones controversially hammered out last year at the company’s Pomigliano plant in Campania and at its historic Turin factory of Mirafiori.
Fiat has argued this week that it is “necessary to replace long-standing agreements that are obsolete and incongruous with modern operating requirements”.
Marchionne claims that his idea is to establish “up-to-date agreements” which will “ensure the flexibility and governability of our plants”, in the process guaranteeing workers “a better working environment and appropriate financial conditions”.
Union critics argue, however, that the agreements arrived at last year in Pomigliano and Mirafiori call for longer shifts, shorter breaks, increased overtime and, crucially, a limitation to the right to strike.
Speaking yesterday, Fornero promised that the Monti government was watching the situation very closely and was “ready to offer a constructive contribution” to the resolution of the Fiat-Termini question, starting next week. Fornero may be just the person to do that since she is reported to have very good relations not only with Fiat but with the militant Federazione Impiegati Operai Metallurgici trade union. In the meantime, if the Monti government is watching the Fiat situation closely, observers are watching the new government just as closely. The handling of this labour conflict could indicate just where the new government intends to draw the line between marketplace logic and social equity.