Electrolux agrees restructuring plan for Italy

Following seven months of negotiations, on 20 September 2008, the trade unions and management of the electrical appliances company Electrolux reached an agreement regarding the production activities of the multinational in Italy. The agreement outlines the future of the plants at Scandicci in the province of Florence and Susegana in the province of Treviso. Furthermore, it sets out the investments to be made over the next three years.

Company background

The Swedish group Electrolux is a world leader in the production of electrical household appliances and kitchen appliances for industrial use. It has six manufacturing plants in Italy and employs over 8,000 workers in the country. In Italy, the Group produced stock amounting to seven million appliances in 2007, which corresponds to 25% of the Italian market and more than a third of total production in Europe.

Agreement on industrial plan

In February 2008, the Electrolux Group announced that, due to the decline in sales of electrical appliances – particularly refrigerators – it had to close its plant at Scandicci in the northwestern province of Florence, resulting in 450 redundancies. Furthermore, the company was forced to downsize its plant at Susegana in the northeastern province of Treviso, reducing the number of workers by 330 persons.

Following the announcements, the trade unions started negotiations and organised numerous protests in the Electrolux plants. On 20 September 2008, an agreement was signed between the management of Electrolux Italia, the national coordination of the unitary workplace union structure (RSU) of the plants in the Group, the three national metalworking trade union federations and their corresponding provincial structures. The three signatory national federations were: the Federation of White-collar and Blue-collar Metalworkers (Federazione Impiegati Operai Metallurgici, Fiom), affiliated to the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil); the Italian Metalworkers’ Federation (Federazione Italiana Metalmeccanici, Fim), affiliated to the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana Sindacati Lavoratori, Cisl); and the Italian Metalworkers Union (Unione Italiana Lavoratori Metalmeccanici, Uilm), affiliated to the Union of Italian Workers (Unione Italiana del Lavoro, Uil). On 3 October, the agreement was ratified through a vote of the workers, with a majority of 87.87%.

Content of agreement

The agreement concerns three aspects: the future of the plants at Scandicci and Susegana and the investment plan of the Group in Italy for the next three years, from 2009 to 2011.

Scandicci plant

The factory at Scandicci will be sold to a company, Energia Futura, controlled by the Anglo-American investment fund, Mercatech. By 2010, the plant will change from the production of small refrigerators to the production of solar panels and wind vanes, and will hire at least 370 of the 450 employees currently working at the plant. The hiring arrangements and dates for these workers will be defined in an agreement which Mercatech has confirmed will be reached with Fim, Fiom and Uilm.

From 5 January 2009, all of the workers at the plant will be placed in an Extraordinary Wages Guarantee Fund (Cassa Integrazione Guadagni Straordinaria, Cigs) for a period of 24 months, according to rotation criteria. The agreement envisages an availability list (lista di mobilità) for those workers who reach retirement age during the period of mobility allowance (indennità di mobilità). Workers who decide to resign, including after the Cigs period, will receive an ‘incentive to resign’ (incentivo all’esodo) or redundancy package of up to €19,000.

If, after all of the expected interventions and the re-hiring of workers by Energia Futura, there is still an excess of workers, the agreement stipulates that Energia Futura will set up a project to help workers re-enter the labour market. This project will involve local bodies and companies associated with the Confederation of Italian Industry (Confederazione Generale dell’Industria Italiana, Confindustria) in the province of Florence. The results of the project plan will be monitored and discussed by the signatories at regional level every three months.

Susegana plant

The Electrolux agreement also anticipates the relaunch of production at the Susegana plant, by aiming to manufacture medium-high quality products. This new direction in production will result in a reduction in personnel of 324 workers, which will diminish to 299 job losses through the voluntary transformation of some employment relationships from full-time to part-time. The agreement envisages a rotation of the Cigs on a bimonthly basis, in order to equally distribute the effects between the workers in terms of reduced working hours and salary. Workers in excess will be placed in Cigs and at a later stage on mobility allowance. During this period, whoever does not become eligible for retirement will be offered financial incentives to resign.

The signatories will promote interventions to facilitate a rapid search for new forms of occupation for excess workers, by setting up a working group. The activities of this group will be discussed by the signatories before March 2009. Furthermore, the agreement envisages the reintegration of redundant workers in the labour market through the involvement of local bodies and companies associated with Confindustria.

Three-year investment plan

Electrolux has promised to invest about €53 million in its Italian plants in 2008 and a further €155 million in the following three years from 2009 to 2011. A total of 50% of this capital will be invested in product innovation and 30% in production processes.

Reactions to agreement

The trade union representatives consider the agreement to be very positive and are satisfied that a high number of workers have accepted the proposal, with 87.87% voting in its favour. The General Secretary of Fiom-Cgil, Maurizio Landini, has underlined that ‘for the first time, a multinational has agreed to discuss a plan to relaunch a company rather than opt for delocalisation’.

Commentary

The agreement for the Electrolux plants confirms the ability of companies and trade unions in the metalworking sector to cooperate in the complex processes of industrial restructuring prompted by the globalisation of markets. This agreement demonstrates the sense of responsibility of the local system of enterprises in matters concerning the reintegration of workers in the labour market.

Vilma Rinolfi and Domenico Paparella, Cesos