Ferrari Auto, Italy: Towards a balanced flexibility
In February 2005, the sectoral trade union organisations, together with the Italian automotive manufacturer Ferrari Auto, signed a company agreement. Among other initiatives, the agreement introduces greater flexibility in working time, makes part-time work more accessible and attractive, and increases performance-related pay.
Founded by Enzo Ferrari in 1929, Ferrari Auto is an Italian automotive manufacturer for the Formula One World Championship; it also manufactures high-end, high-performance racing cars and sports cars. At first, the then Scuderia Ferrari sponsored drivers and manufactured racing cars. In 1946, the company moved into manufacturing cars itself; it later became Ferrari SpA., and is now controlled by the Fiat group. The company is based in Maranello, near Modena, Italy. The workforce numbers about 2,500 employees (including around 300 women). The workplace employee representation body (Rappresentanza Sindale Unitaria, RSU) is made up of 24 employee representatives (only one of whom is a women). An executive delegation of employee representatives meets with management whenever necessary. Union density is about 25% – mostly blue-collar workers.
Description of the initiative
On 31 March 2005, after 15 months of negotiations, a company agreement was signed by Ferrari Auto, by RSU, and by the three metalworkers’ trade union federations: Italian Federation of Blue-Collar Metalworkers (Federazione Italiana Operai Metalmeccanici (Fiom-Cgil), the Italian Federation of Metalworkers (Federazione Italiana Metalmeccanici, Fim-Cisl), and the Italian Metalworkers' Union (Unione Italiana Lavoratori Metalmeccanici, Uilm-Uil).
Ferrari is currently trying to expand into international markets and needs to increase its productivity: to do this is seeks to intensify the use of its plants and make more flexible use of its workforce, by increasing the number of hours worked per week. To achieve these objectives, the trade unions and the company have established a series of flexibility rules for the use of the plant equipment; they have also instituted new shifts and working times without, however, lengthening the working week for individual workers. Moreover, the company agreement has improved the image of part-time work and has broadened opportunities for part-time work, in an attempt to assist workers to reconcile family and professional life.
It took 15 months to conclude the agreement. Initially, several assemblies took place with employees and trade unions. These assemblies demanded that a higher value be placed upon part-time work, that new profiles of professionalism be created and that workers’ so-called ‘multi-functionality’ be rewarded. Negotiations then followed between trade unions and the company. However, reaching a proposal for an agreement was difficult: the company wanted to increase productivity and to introduce a further two shifts per week (in addition to the existing 15 shifts), which would require working on Saturdays and Sundays; many employees did not agree with this proposal. In the end, the social partners decided to add just one shift on Saturdays with a bonus of EUR 20, and only in those areas where productivity had to increase. On Sundays and Mondays, these employees have their rest days. Introducing a 16th shift in the week proved to be the most difficult issue in the new agreement. During negotiations, internal problems emerged between the members of the trade unions, but in the end the referendum was approved with 88% in favour. Currently, about 40 employees are working 16 shifts per week. The climate of cooperation among the social partners contributed to reaching a positive outcome without industrial action.
The agreement also established a joint committee for performance, made up of six management members and six employee representatives. The purpose of this technical board is to decide the production planning on an annual basis, and to decide where to introduce the 16th shift; as a result, trade unions are increasingly involved in the important strategies of the company. Two further joint committees were created to organise and coordinate the introduction of part-time work and to discuss employees’ job classification levels.
The agreement also deals with the organisation of holidays, with the aim of combining individual needs while allowing for increasing production volumes. Workers will be able take holidays in a non-continuous manner during the course of the year. The agreement also provides for performance-related pay: it will possible for each employee to reach a pay level of around EUR 14,000 per annum in four years (2005–2008).
However, in 2005 some difficulties emerged in implementing the agreement: at a national level, there were many problems in establishing the new collective national agreement for the metalworkers. Because of those complications, the relationship between the social partners at company level became more difficult. Eventually, the new sectoral agreement was signed in January 2006, re-establishing the relationship between Ferrari management and the trade unions.
The agreement, signed at company level, is an example of balanced flexibility. It seeks to combine more intensive use of equipment and greater productivity with important advantages for workers: raising pay for the Saturday shift, making part-time work more accessible and attractive, increasing performance-related pay, and organising holidays with the aim of meeting workers’ needs.
The agreement also strengthened the tools that allow trade unions to participate in company decisions and important aspects of the employment relationship. The agreement provides for the creation of a participation committee, with the involvement of the union governing bodies at the provincial level. A joint committee responsible for managing all job classification-related problems has been set up. The company management also declared its availability to discuss employees’ job classification levels with the trade unions; this could determine the outcome of at least 140 promotions.
The case is also an example of how a participatory approach can lead to a win–win situation for workers and employers. The agreement is the result of discussions and a high degree of participation between the employees, trade unions, and social partners. This has had a positive impact on the results of the agreement. Furthermore, the agreement has established a much higher level of involvement of the trade unions in company strategy, through the creation of several joint committees, which is also doubtless a key element in its success.
The Employers’ Association of Modena supported company management in the creation of the agreement.
Exemplary and contextual factors
The company agreement is an exemplary case study of balanced flexibility. Ferrari increased both its productivity and flexibility, while advantages were negotiated for the employees. By creating joint committees for production planning, for establishing employees’ job classification levels and for organising part-time work, there is room for dialogue between the company and the trade unions and, therefore, the employees.
Maite Tapia, Volker Telljohan, Fondazione Istituto per il Lavoro, Bologna