Employers and unions make joint call for measures to assist textiles sector

Download article in original language : IT0411101NIT.DOC

In October 2004, trade unions and employers’ organisations in Italy's crisis-hit textiles sector signed a joint document on industrial policy. The social partners will present the document to the government and ask it to include measures to help the industry in the 2005 state budget.

The recent opening up of the international market has had a severe impact on the Italian textiles, garments and fashion industry, The fall in total sales between 2001 and 2003 amounted to EUR 4.6 billion, and job losses to 40,000 (IT0403102N). The main trade union organisations in the sector- Filta-Cgil, Femca-Cisl and Uilta-Uil- and employers’ associations - Sistema Moda Italia, Associazione Tessile Italiana and Tessilvari- recently decided to ask the government to include in its 2005 state budget law a plan of action to support textiles and garment manufacturing companies and to make it less attractive for them to relocate production abroad.

These proposals were summed up in a 'joint document on industrial policy' signed on 21 October 2004. According to the signatories, there are three main reasons behind the crisis in the textiles sector: the fall in domestic prices; the unbalanced development of the euro-US dollar exchange rate; and the competitiveness of manufactured and semi-manufactured products from newly industrialised countries. International competition could, moreover, become even tighter at the beginning of 2005 - once the liberalisation of the international market is completed - if the necessary measures are not taken in time. In the light of this situation, the partners have proposed to the government four types of intervention, as follows.

1. Support for the 'Made in Italy' brand through: obligatory introduction of a label stating a product's origin and then a scheme for ensuring 'traceability'; stronger sanctions against counterfeited goods and the approval of a 'code of patent rights', which is being currently examined by parliamentary commissions; promotion of campaigns aimed at fighting fraud, 'social dumping' and environmental damage; and greater action by the competent authorities to control borders and conduct customs checks.

2. Industrial policy actions in favour of research and innovation, in the light of the fact that the textiles sector is predominantly composed of small and medium-sized enterprises (SMEs). According to the social partners, public interventions should be more selective and aimed at supporting the presence of SMEs on the international markets. These incentives should foster an aggregation and integration process among companies, and encourage company growth through easy access to credit in order to increase capital.

3. Action on labour costs and relocation. The relocation of companies to low labour-cost countries implies the closure of many plants in Italy and the consequent loss of jobs. The social partners propose reducing labour costs while maintaining employees’ pay levels. The 'regional tax on productive activities' (Imposta regionale attività produttive, Irap) should be reduced in respect of personnel in charge of the research and development of new products, and the tax and social security contribution burden on low-skilled and low-paid jobs should be cut. In order to slow down company relocation, the government should grant public assistance only to those companies that, during their expansion into new markets, do not penalise production and employment in Italy.

4. On labour, employment and training, the signatories' main proposals are to: accelerate decision-making processes over the definition of apprentices’ training contents; have the regional authorities use the results of vocational training needs surveys conducted by the sector's national joint body for training; lift taxation on the costs sustained by companies for training; introduce tax and social security contribution reductions for the working hours spent in training activities; and fund positive actions aimed at fostering companies’ competitiveness, such as reorganisation of working time, or measures to improve the reonciliation of employees' work and family life.

The social partners have also proposed a number of legislative interventions to support employment, which has been severely hit by the crisis in the textiles sector. They want extend to textiles companies the possibility - already available for the automobile sector - of increasing the time during which workers affected by restructuring can have access to payments from the Wages Guarantee Fund (cassa integrazione guadagni, Cig) (IT0311306T) from 52 to 104 weeks over a three- year period, in order to make the use of this 'social shock absorber' (IT9802319F) more flexible. The social partners have also asked the government, in the 2005 budget law, to extend current special provisions on the use of the extrordinary Cig by companies of the textiles and garment sector.

The partners have expressed their satisfaction with the joint document. Savino Pezzotta, the general secretary of Cisl, stated that 'the agreement reached is a very positive factor for the relaunch of a concerted industrial policy among Italy’s social partners'.