In February 2007, the Italian government, Fiat management and trade unions signed an agreement providing for long-term mobility arrangements for 2,000 employees in the group. The agreement marks the conclusion of Fiat’s recovery process, following the company’s financial difficulties at the start of the decade.
On 19 February 2007, at the Presidency of the Council of Ministers, representatives of the government and of the national and sectoral trade union organisations, along with the Managing Director of the Fiat group, Sergio Marchionne, signed an agreement which allowed the Fiat group to avail of long-term labour mobility arrangements for 2,000 of its employees. The government representatives included: the Prime Minister, Romano Prodi; the Undersecretary to the Presidency of the Council, Enrico Letta; the Minister of Employment, Cesare Damiano; the Minister of Transport, Alessandro Bianchi; and the Vice-Minister of Economic Development, Sergio D’Antoni.
Signatories on the trade union side comprised representatives of the following organisations: the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil); the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana Sindacati Lavoratori, Cisl); the Union of Italian Workers (Unione Italiana del Lavoro, Uil); and their affiliated sectoral organisations, the Federation of White and Blue-collar Metalworkers (Federazione Impiegati Operai Metallurgici, Fiom-Cigl), the Italian Metalworkers’ Federation (Federazione Italiana Metalmeccanici, Fim-Cisl) and the Italian Metalworkers’ Union (Unione Italiana Lavoratori Metalmeccanici, Uilm-Uil).
The agreement signed at Fiat should put an end to the economic crisis which the group had faced since the late 1990s.
Background
The problems that dogged the Fiat group, Italy’s main automobile manufacturing company, in previous years now seem to have been put firmly behind it. At the end of the 1990s, the group was under pressure from foreign competition and, by the early 2000s, it was on the verge of bankruptcy (IT0212211F).
The company’s response was to replace its senior managers and to develop a new business plan, which was presented to the government and the trade unions in 2005. This provided for an investment of €18 billion over three years (IT0509101N, IT0604029I, IT0601305F, IT0607049I). The efforts to restore the group’s strength involved not just the company itself but also the government and the trade unions.
On 18 December 2006, agreement was reached between the company and Fim-Cisl, Fiom-Cgil and Uilm-Uil on a strategic plan for 2007–2010 and a business plan for 2007–2008. The business plan involves a significant expansion in the volumes produced in Italy by the principal companies in the group – Fiat Auto, Powertrain, Magneti Marelli, Iveco and CNH; this objective would be achieved by making more intensive use of production facilities. The remaining cases of over-staffing were finally solved by the use of ‘long-term mobility arrangements’ and negotiations were instigated to settle the problems in relation to sub-contracting activities in the surrounding area of the Termini Imerese plant in Sicily.
Long-term mobility agreement
The agreement signed on 19 February 2007 between representatives of the government, Fiat management and the trade unions constituted the follow-up of the agreement signed between the social partners on 18 December 2006.
In Italy, the ‘mobility’ scheme offers a means of continuing to provide income to employees who become surplus to requirements. The workers affected cease to carry out their contractual occupation and are put on a special ‘availability list’ (lista di mobilità), which assists the employment services in seeking a new job for them. The workers receive an availability allowance (indennità di mobilità) of 80% of their salary, which is paid by the state. Employers are given an incentive to hire workers from the availability list by a reduction in the obligatory insurance contributions, which they pay on behalf of such workers.
The maximum time that a worker may remain in mobility is set by statute at two years. However, should conditions warrant it, the government has the facility to grant long-term mobility. Workers in long-term mobility may receive financial support right up until they reach pensionable age.
The government was aware that the aim of the 2005 Fiat plan had been to overcome the crisis situation which had overtaken the group some years back, and it recognised that conditions were such as to allow for the granting of long-term mobility agreements to 2,000 employees.
The agreement also stipulated the instigation of negotiations between the social partners, the government and local official bodies for the redevelopment of the Termini Imerese plant in Sicily; this would, in turn, enable the development of sub-contracting activities in the surrounding area. Fiat’s aim is for a new model to be produced at the plant, increasing its output to 600 vehicles a day.
Financial results and forecast
During the February 2007 meeting, Mr Marchionne summarised the group’s 2006 financial results. An operational profit of €5 million a day was recorded, compared with a loss of €2 million a day in 2004. The net business debt at the end of the year was less than €1.8 billion, compared with €9.4 billion at the end of 2004. Some 4,000 new employees were recruited during 2006 – comprising 2,800 workers on fixed-term contracts and 1,200 workers on long-term contracts; a further 1,100 employment contracts were transformed from fixed-term to long-term contracts.
A turnover of €67 billion is forecast for 2010, corresponding to 2% of national gross domestic product (GDP). Overall, €20 billion has been earmarked for industrial investment and research and development (R&D), with 65% to be invested in Italy.
In the automobile sector, the group plans to launch 23 new models in the period ending 2010, and to have two million additional car sales in 2006 and 2.8 million more in 2010 (3.5 million including joint ventures), thereby increasing its European market share from 8% to 10%. Moreover, as noted, a new model is to be produced at the Termini Imerese plant, building up its output to 600 vehicles a day.
Reactions to agreement
The agreement has been received very positively, particularly since it marks the end of the crisis which threatened Italy’s largest industrial group. Minister Damiano has stated that the agreement forms ‘the basis for employment growth, especially among the young, and for employment protection’.
The Secretary General of Cisl, Raffaele Bonanni, believes that ‘the group’s positive results may be attributed to sound corporate decision making, but even more so to the exceptional contribution made by its workers’. The Secretary General of Cgil, Guglielmo Epifani, hopes that the requests made by Fiat ‘are the last and that Fiat does not ask anything more of the state’.
Mr Marchionne is also satisfied and views the agreement as the finishing touch to a process that had been initiated several years ago, highlighting that: ‘This brings an important phase to an end and represents the final stage of recovery.’
However, criticism was expressed by the parliamentary opposition. Maurizio Sacconi of the Forza Italia political party, and former undersecretary of employment, considers that the government has made recourse to a mere ‘assistance lever’.
Vilma Rinolfi, Cesos