The CEO of the Fiat and Chrysler Group has adopted the line of blackmail against the Fiat workers of the historic Italian factory of Mirafiori. In front of the challenge, the left and the Italian trade unions were divided. But the result of the referendum was a Pyirrhic victory for Mr. Marchionne, since the majority of the manual workers voted against the agrement.
There is something sadly paradoxical in the way Sergio Marchionne, CEO of the Chrysler-Fiat Group, has divided the Democratic Party in Italy, as well as unions. Susanna Camusso (Secretary General of the CGIL, the main labor Confederation), has blamed Mr,Marchionne for his authoritarian and undemocratic attitude, in other words, his blackmailing stance. But for a part of the left-wing Democratic Party (PD), it is a right reminder of the realities of globalization and of the need to adapt to it the trade-unions strategy. The only objection to this position was the exclusion of FIOM, the main metalworkers 'union, from the workers' representation in the factory, because its dissent toward the agreement signed by the other metalworker’s unions. Sacrosanct objection - it would be amazing the contrary - but insufficient. This is just the tip of the iceberg.
To discuss the Marchionne’s plan it is worth to start with the fact that his fate, as an international manager, is definitively, tied to the sort of Chrysler. Detroit will declare his success or failure. The Chrysler came from a troubled past. In recent decades, Chrysler has repeatedly been on the brink of bankruptcy. Being marginalized by the large U.S. market, it is not surprising that when Barack Obama decided in 2009, after the bankruptcy, the rescue of General Motors and Chrysler, no American businessman stepped forward to fix and relaunch the Chrysler. The attempt had been made by the Germany's Daimler, maker of Mercedes Benz, but after having lost several million dollars it had been constrained to give up in 2007.
But for the italo-canadian ambitious manager it was an opportunity that could not be missed. The Chrysler was sold for free with a 20 per cent stake and the opportunity to acquire the majority of the shares (now in the hands of the UAW, the Auto-Workers Union), once the debt of about seven billion dollars would have been repaid to the U.S. and Canadian governments. It is not difficult to understand how the acquisition of Chrysler, the "Third Big" of Detroit, had become the principal gamble of Marchionne’s life, with Fiat playing a complementary, if not a residual, role.
Let's summarize some data. In 2010, Chrysler has produced approximately one million cars (and light trucks). In the middle of this decade it had produced more than two million. The Marchionne’ s target is to reach 2.8 millionS units, slightly less than three times the current production, by 2014. For the most skeptical analysts it is an unrealistic goal. But it is a strategic target to achieve the goal of six million units Marchionne set for the Fiat-Chrysler alliance.
Within the Fiat Group the most important branch is the Brazilian one, where Fiat is the main producer, ahead of Volkswagen and General Motors. Not surprisingly, Fiat has committed a huge investment in the Betim plant on the outskirts of Belo Horizonte, which is one of the largest automobile factories in the world, aimed to increase its production capacity to one million units. Another plant will be built in the state of Pernambuco for to 200,000 vehicles. With one million and two hundred thousand units, double that in 2010 built in Italy, Fiat will consolidate its leadership in the Brazilian market.
If two-thirds of the production plan are assigned to the old Chrysler and to the Brazilian branch of the Chrysler-Fiat group, Europe can only play a collateral and relatively secondary role. In effect, Poland will consolidate its position with a production of 600,000 units in Tychy. According to the "Serbia protocol", between Fiat and the Serbian government - which gives two thirds of the property to Fiat and a third to the state - the restructured old Zastava factory will host up to the production of 200,000 units. Other 100,000 or more units are in production in Bursa, Turkey. What remains of the grand “global” Chrysler-Fiat - very little, indeed - will be distributed among the Italian plants, where Fiat has produced, in 2010, 600,000 units, including the Alfa Romeo that could be sold to the Volkswagen.
It may be that the six million cars target is simply a bluff. It is hard to produce and sell 2,800 million Chrysler’s vehicle, a target never realized in the history of the Detroit smaller company. In any case what is sure is that the century-old Italian Fiat is going to be marginalized, if not destroyed.
So it is not surprising that Mr. Marchionne doesn’t want to show his plan of investment in Italy, nor the unions, nether the government (even tough Mr.Berlusconi said that he is in favor of the CEO, including his project to displace the auto production away, IF workers would have rejected his plan). In any case, it would be hard even for his most eager fans of the Democratic Party and trade unions, who signed the agreements for Pomigliano (the factory close to Naples) and Mirafiori (the historic factory of Turin that once was the larger in Europe) to accept that of Fiat - Italian Automobile Factory of Turin - will not remain but a pale shadow, with the center transmigrated in Detroit and the main branch in Latin America.
Compared to the Marchionne’ planning, globalization strongly evoked by the national media (Corriere della Sera e Repubblica) is a flimsy excuse. Toyota, Volkswagen, Ford and GM, along with PSA and Renault, are all 'global' companies producing and selling in different continents, but nobody would deny that, firstly, they are firms whose main reference centers, there research and development departments, are in Japan, Germany, the United States and France.
In 2010 the Fiat Group has sold on the EU market about one million cars, the two major French groups three million and six million the German producers. Do we owe this dramatic difference to the greed of Italian trade unions, in particular, Fiom – Cgil, unaware of the advent of globalization? The refusal to adjust Italian wages to the Polish ones and -why not? – to the Chinese ones? But the "Il Sole 24 ore" (Oct. 28), the Enterprises Association’ newspaper –honestly reminds us that at Volkswagen the basic gross salary of the workers of the assembly line is 2,700 Euro per month and that of workers in the maintenance of € 3300-3500 – a labor cost largely higher than in Italy.
And it's not just a salary’s difference. In Germany, representatives of workers occupy, on the basis of the Mitbestimmung, 50 per cent of the seats of the Supervisory Board (as in all large German companies), being able to discuss the company's strategy, along with the long-term investment and the employment guarantees. When a company, as has happened with Fiat, replaces a diktat to the practice of a normal negotiation and the union that disagrees is denied citizenship at the factory, the problem is not globalization, but the Americanization of industrial relations.
But there is something more, something sadly paradoxical. Between Germany, the cutting edge of European industry and the U.S. in crisis, part of the Italian left and of the unions chooses the Marchionne’s American model. The fragmented, company’s model of bargaining that in the last decades has devastated the AFL-CIO, the once powerful Labor Federation, now reduced to eight percent of U.S workers’ membership in the private sector. The American model which, after Reagan and in spite of Barack Obama, allows replace workers without a time limit. And where you can work in the same job with half the wage.
Maurizio Landini (Secretary General of the FIOM-CGIL) says: you have to try to work on the assembly line before talking about rhythms, cadences, pauses, turns. A trivial matter for those who prefer put forward the major paradigms of globalization and modernization. Yet this is the job of the unions.
In any case, Mr. Marchionne could hardly have presented his plan of marginalization, if not of ultimate destruction, of the main Italian manufacture national enterprise and of the dismantling of the industrial relations system, to a normal right-wing government like the German or French ones, or to a trade union as IG Metal, without being mocked and considered a simple provocative, bizarre and arrogant industrial boss. In Italy, instead, he appears as "modernizing" and a long-awaited reforms promoter. As Financial Times has written, he should implement the reforms that Berlusconi has been unable to impose. He should be a Southern delayed Thatcher. It is a pity that Italian workers must face Mr.Berlusconi and Mr.Marchionne at the same time, while unions and leftwing parties are deeply divided, and impotent.
Post Scriputm
While this issue of Insight is going online, the results of the 13-14 January referendum imposed by Fiat at the Mirafiori factory, on the agreement signed by four Unions except FIOM-CGIL (that represents the majority of metalworkers at the national level), have become known.
Out of the 5,100 workers at Mirafiori, 96.4 per cent voted in the referendum. The agreement was approved by 54 percent of voters. However, the majority of blue-collar workers voted against the agreement, while the 450 white-collar, including middle management, voted YES almost unanimously, tipping the final result in favor of the Fiat-Chrysler Group. A worker interviewed before the vote, asked about the content of the agreement signed by the majority of the Unions, replied: "It's crap" but added quickly, about his voting intentions: "I have family and children. I am going to vote against my conscience [contro-coscienza]: I will vote YES”.
(Related article: Mario Nuti 1. Dr. Marchionne's Vietnam [1] )