Fiat workers strike against reorganisation plan

Download article in original language : IT0411305FIT.DOC

On 5 November 2004 ,a four-hour strike was held at all Italian Fiat car plants. This was the first time in more than two years that the Fiat workforce had staged industrial action nationwide. The strike also affected Powertrain (the joint venture between Fiat Auto and General Motors) and subcontractor companies, and was called jointly by main metalworkers' trade unions, following a meeting with the chief executive of Fiat Auto, at which a plan for reorganising the company was presented.

The metalworking sector accounts for the largest part of Italian manufacturing industry. It has been in difficulties for some time, and the situation of the car industry is especially serious. Even on the most optimistic of forecasts, 2004 will close with a total of 2,235 million cars produced, the lowest level since 1997. The general stagnation of the sector has further exacerbated the difficulties afflicting Fiat. The historic Turin-based car company, which has changed its top management three times in the past few years (each time with a new recovery plan), in October 2004 recorded a 13.25% fall in sales and a 27.6% decrease in its market share, which was 1.6% less than it was in October 2003. This negative trend has been under way for some years and continues to have repercussions on employment levels at the company. According to the Italian Federation of Blue-Collar Metalworkers (Federazione Italiana Operai Metalmeccanici, Fiom-Cgil) figures, as of 31 December 2000 the number of Fiat Group employees was 73,763, while by 31 December 2003 it had diminished to 55,403, almost 25% less. Moreover, the employment situation is characterised by systematic recourse to the Wages Guarantee Fund (Cassa Integrazione Guadagni, Cig) - which makes payments to workers affected by restructuring (IT9802319F and IT0311306T) - by all the group’s plants in Italy.

The reorganisation plan

Against this background, during a meeting with the trade unions held in early October 2005, the Fiat Auto chief executive, Herbert Demel, presented the new reorganisation plan. This states that the company must reduce its costs by increasing daily working hours and the days of plant use per year. This should not affect individual weekly working time because greater use will be made of flexibility. According to Fiat Auto, the cost of one hour of work varies considerably across its plants in Italy, and in all cases is considerably higher than in Fiat plants abroad: for example, one hour of work in Poland or South America costs the company around EUR 30, but in Italy the figure is EUR 90 at Termini Imerese, EUR 80 at Mirafiori and EUR 55 at Melfi. Increased working time flexibility, with the consequent reduction of costs, is considered indispensable if guarantees of job security and the non-closure of plants are to be given to the unions.

Another key aspect of the plan is the market strategy that Fiat intends to pursue. After elimination of top-of-the-range car production, between 2005 and 2007 Fiat and Lancia will launch six new models and seven restylings, and Alfa Romeo five new models and one restyling, with five new models and three restylings in the commercial vehicles range.

The new production model will be based on plant specialisation by platform, increased flexibility, 'synergies' and the rationalisation of locations.

Reactions by trade unions

During the October meeting, the unions presented a joint document for discussion stating the conditions that, in their view, must be fulfilled in order to resolve the crisis at Fiat and relaunch the Italian car industry. The two main proposals concern innovation (a new engine and a new gear-box) and the introduction of new models. The unions also asked the company to review its decision to cease engine production at the Arese and Mirafiori plants: this, according to the document, would compromise the entire car production cycle, especially in Turin.

The trade unions criticised Mr Demel’s plan as entirely inadequate in a number of respects; in particular, its perceived exclusive focus on reducing costs and shifting production outside Europe (according to the unions, 970,000 cars have been produced abroad in 2004, compared with 950,000 in Italy), while neglecting experimentation and innovation. The company’s intention not to close plants and to maintain employment levels was judged positively, but the unions were extremely critical of the proposal to exchange working time flexibility for job security.

Following the meeting, Fiom-Cgil, the Italian Federation of Metalworkers (Federazione Italiana Metalmeccanici, Fim-Cisl), the Italian Metalworkers’ Union (Unione Italiana Lavoratori Metalmeccanici, Uilm-Uil) and the Italian Federation of Metalworking Unions and Associated Industries (Federazione Italiana Sindacati Metalmeccanici e Industrie Collegate, Fismic) affiliated to the General Confederation of Autonomous Trade Unions (Confederazione Generale dei Sindacati Autonomi dei Lavoratori, Confsal), asked for a meeting with the chief executive of the Fiat Group, Sergio Marchionne, and then announced that a four-hour strike would take place at all Fiat plants in the country on 5 November to protest against the reorganisation plan. The most recent nationwide strike was held two years ago, when Fiat and the government reached a framework agreement on the restructuring of Fiat, but the unions rejected the deal (IT0212211F).

According to Fiat, turn-out for the strike ranged from a maximum of 50% at Termini Imerese to a minimum of 3.3% at Powertrain (the joint venture between Fiat Auto and General Motors) in Termoli. The unions, by contrast, claimed that there had been massive participation at all plants, with levels of 90%-100% in the province of Naples and in Sicily. Subcontractor companies were also affected.

Gianni Rinaldini, the general secretary of Fiom-Cgil, has announced that a general assembly of all Fiat Auto union delegates will soon be convened in order to decide on further strike action, while also urging the government to intervene. In this regard, the under-secretary at the Ministry of Welfare, Maurizio Sacconi, has declared that the severe difficulties afflicting the Fiat Group 'require joint commitment by shareholders, administrators, trade unions, and the institutions; but calling for direct intervention by the government prior to the institutions would be an anti-historical response'.

Commentary

The importance of the strike called jointly by the Fiat trade unions can be understood only if it is viewed within the broader framework of industrial relations in the Italian metalworking sector. The situation at Fiat, from both the economic point of view and that of trade union relations, is closely connected with ongoing events at sectoral level. Fiom, Fim and Uilm, after failing to sign jointly collective agreements in metalworking in recent years (IT0305204F), are now working to produce a unitary platform for negotiations on renewal of the nation-wide collective agreement. The return of trade union unity would be indubitably beneficial to industrial relations at both company and sector level. If the metalworkers' unions manage to find a common position on renewal of the sectoral agreement, and if they reach an accord with the Federmeccanica employers’ association, this may have also positive effects on resolving the conflict that has erupted at Fiat recently - although company management has already announced that it will go ahead with the reorganisation plan with or without the support of the unions. However, given Fiat’s importance in the metalworking sector, the effect may be the reverse: an exacerbation of the conflict at Fiat may complicate sector-level negotiations, which have already seen the first disputes between the social partners in the run-up to new talks. (Edoardo Della Torre, Ires Lombardia)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment