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Fiat's Sergio Marchionne; a man with a mission PDF Print E-mail
Jan 13, 2011 at 10:25 PM

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Sergio Marchionne
Sergio Marchionne may be the second most controversial man in Italy (after Prime Minister Silvio Berlusconi, naturally). But in the minds of many (me included) he is a man with a mission, an important one, that of getting the Fiat car company back on solid economic ground, something the 58-year old, sweater-wearing CEO believes can only be done by scaling back the power of Italy's unions and reducing the acquired rights of the country's metalworkers.

Tomorrow, when the results of a referendum that is to be held at the Mirafiori auto plant in Turin, in northern Italy, are known, one will have an idea of whether he has a chance of succeeding and whether, as a result, Fiat Italia, one of the country's major industrial company for more than a century, will continue to play an important role in the Italian economy.

In December, the company reached an agreement with two of Italy's three major metalworker unions that will give him just that. But the third union, the powerful FIOM, refused to sign saying Marchionne's method violates Italian labour laws and accuses him of ‘‘an unprecedented attack on democracy and on people's rights''.

Now it is up to the workers. They must choose between a new regime that will introduce more work shifts, shorter breaks, and make overtime obligatory or the prospect that Fiat will reduce its stake in Italy, eliminating many jobs.

The outcome of the vote may also affect whether, in general, industrial relations in Italy will take a turn for the better, or for the worse. Marchionne believes that frequent strikes and absenteeism have severely damaged productivity and efficiency not only at Fiat's plants in Italy but in much of the Italian manufacturing fabric. He believes manages and entrepreneurs need greater control over their plants and he is not alone.

This week, after a long silence that led the opposition to accuse him of failing to take a proactive role in finding a way to save one of the country's most important - and symbolic - factories, Berlusconi spoke out, saying only that he agreed with Marchionne's not-so-veiled threat to direct Fiat's future investment to other countries if the factory's workers turn down the admittedly draconian agreement.

Berlusconi's comments enraged the left even further. But the fact is that industrial relations have so deteriorated in Italy that few foreign companies even think of investing here these days and more and more Italian firms are looking elsewhere.

In the meantime, the tension outside the main gates of Mirafiori, over the decades a traditional arena for anti-capitalist harangues was clearly palpable, with th last few days characterized by frequent skirmishes between those campaigning for a "no" vote and those who said they believe a "yes" is necessary to avoid unemployment.

To the extent I can tell from kilometres away in Rome, none of the workers like the accord. Statistics say Italian factory workers - compared to others in Europe - are underpaid. But at least they had significant perks and the freedom to resort to strikes when the unions considered it necessary.

The Italian labor movement has long been divided into three main federations, the smaller, most moderate UIL, the medium-moderate and once Catholic-Socialist CISL, and the once communist-dominated CGIL, each of which played the leader to numerous sector-organized unions, again divided along political lines. Collective bargaining between the federations and Confindustria, the national manufacturers' association, often under the aegis of the government, produced industry wide contracts that severely curtail the freedom of action of this or that business.

This may be the real crux of the matter and the principal reason for FIOM's rabid opposition. For the Mirafiori agreement is the second factory-specific accord that Fiat has been able to obtain outside the framework of nationally-negotiated and binding collective contracts; the first was signed last June at the smaller, Pomigliano d'Arco plant, near Naples, and was ratified on June 22st by 62% of the 4800 workers at that plant. Both agreements will enable Fiat management to have greater autonomy in running the factory while limiting workers' right to strike.

Marchionne, born in Italy but, from the age of 14 schooled in Canada, has been CEO of the Fiat group since 2004 and of Fiat Auto since 2005. He has made it clear he believes that frequent strikes and absenteeism have severely damaged productivity and efficiency at Fiat's plants in Italy and wants assurances of greater control before pressing ahead with plans to invest some 20 billion euros in Italy over the next five years. Last year, under his stewardship, Fiat bought a 20 percent stake in the U.S. car company, Chrysler. And just this week it increased that stake to 25%.

FIOM, which is part of Italy's biggest and most left-wing union confederation CGIL, has called an eight-hour strike on January 28 against the deals. CGIL's new secretary, Susanna Camusso (the first woman to ever hold that post) this week accused Marchionne of insulting Italy on a daily basis.

Speaking in Detroit earlier this week, Marchionne rejected such charges saying ''We are absolutely convinced that the way industry is run in Italy must be changed, updated and made more competitive.
''You can't mistake that for an insult to Italy. We love Italy and that's why we are trying to change it. It's a superhuman effort that no one else would make''.

Marchionne has said Fiat will drop its plans to invest in Mirafiori if workers fail to back the deal and warned there are ''very many alternatives'' to the Turin factory outside Italy.



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