Agreement on economic recovery signed at Fiat

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In July 2002, trade unions and management at Italy's Fiat industrial group signed an agreement on a plan for the economic recovery of the troubled group. The agreement seeks to improve the competitiveness of Fiat's automobile division, through measures including over 2,400 redundancies. One of the three main metalworkers' trade unions, Fiom-Cgil, did not sign the agreement.

In June 2002, the Fiat industrial group presented to the trade unions a plan seeking to ensure its economic recovery (IT0206101N). The main aim was to solve two major problems facing Fiat - its severe debt situation and the poor profitability of its productive activities, in particular the automobile division. An agreement with the unions on implementing the plan was to be signed within 75 days of the plan's presentation, and this occurred on 24 July 2002.

The agreement restates the objectives of the Fiat recovery plan: to halve debts before the end of 2002; to divest 'non-strategic' activities; to list Ferrari on the stock exchange; to reach agreements with the banks; and to release 20 new car models between 2002 and 2005, investing about EUR 2.4 billion per year. Furthermore, the group intends to increase its competitiveness in the automobile sector by offering more comfort and accessories in its cars, and to invest in research in order to improve the safety and energy and environmental sustainability of its cars.

In employment terms, the recovery plan and agreement involves job losses, which will hit Turin especially hard. The agreement provides for 2,442 redundancies in the automobile division, along with 445 in two service companies linked to Fiat - 305 at Gesco and 140 at Sepin. The redundancies are concentrated mainly in Turin (1,655), with the other locations affected being Palermo (236), Naples (240), Milan (171) and Frosinone (97).Workers close to retirement will be placed, on a voluntary basis, on 'mobility lists'- one of the 'social shock absorber' measures that cushion the effects of restructuring and redundancies (IT9802319F) - by the end of 31 December 2002, to 'accompany' them towards retirement. The agreement specifies that the pension provisions in force when the workers are placed on the mobility lists will be applied, even if the legislation on pensions changes in the meantime (the government is currently considering pension reform). Fiat will pay economic incentives to the workers on mobility lists, related to their income and the forecast period of mobility.

The agreement also provides for 1,000 young people to be recruited over four years - 200 technicians and university graduates per year, plus 200 recruits in the marketing division to strengthen sales in Europe.

The parties to the agreement will meet again in October 2002 to assess the implementation of the plan. Also in October 2002, the parties will meet at the Ministry of Labour with representatives of the competent Ministries (Industrial Policy, Environment, Research and Labour) in order to examine the implementation of the plan 'considering the social and economic importance of the automobile sector and of the Fiat group' (in the words of the agreement). The situation in Turin will be examined with particular care, given the importance of Fiat to the local economy and the large number of redundancies to occur there.

The Fiat agreement brought to the surface, once again, the divisions between the three main Italian trade union confederations (IT0107193F). On the union side, it was signed by the Italian Metal-Mechanical Federation (Federazione italiana metalmeccanici, Fim), affiliated to the Italian Confederation of Workers' Unions (Confederazione Italiana Sindacati Lavoratori, Cisl), and the Union of Italian Metal-Mechanical Workers (Unione Italiana Lavoratori Metalmeccanici, Uilm), affiliated to the Union of Italian Workers (Unione Italiana del Lavoro, Uil). The Italian Federation of Metalworkers (Federazione Impiegati Operai Metallurgici, Fiom), affiliated to the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), did not sign the agreement, stating that 'the solutions adopted do not have perspectives and will not help the Fiat group to emerge from its crisis'. Gianni Rinaldini, the general secretary of Fiom-Cgil, said that the plan 'is based on workforce reductions, and further reductions will follow'. Fiom-Cgil announced that strikes against the job losses will be called from September.

Savino Pezzotta, the general secretary of Cisl stated that he had problems with the Fiat industrial plan, but that 'the first duty of the trade union is to protect workers’ rights.' Cosmano Spagnolo, the official responsible for Fiat at Fim-Cisl, said that, through the plan, Fiat had confirmed that it would continue to make automobiles and engines. Giovanni Sgambati, the general secretary of Uilm-Uil, said that he was concerned about the situation of the Fiat group but underlined that the new agreement 'prevents Fiat from deciding everything by itself'.

Guidalberto Guidi, the head of the industrial relations department at the Confindustria employers' confederation, regretted that Fiom-Cgil did not sign the agreement and thus did not want to 'share the responsibility for the relaunch of one of the main Italian companies with the other trade union organisations'.

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