* FIAT - Italy's Work Ethics & Unions' Attitude *
 

Fiat: We'd Be Better Off Without Italy
By Alessandra Rizzo, Associated Press Writer
Manufacturing.Net - October 25, 2010

ROME (AP) -- Fiat CEO Sergio Marchionne says the tradition-laden Italian automaker would be better off without Italy and its balky unions, provoking an angry reaction Monday from some labor and government officials.

Fiat has been in tense negotiations with unions over its plan to shut down a factory in Sicily next year. The company has also said it wanted to move back production of one of its models from Poland to Italy, but in exchange for labor concessions that one union rejected.

Fiat, which controls U.S.-based Chrysler LLC, has recently raised its 2010 forecasts, and Marchionne said that trading profit would be at least €2 billion. But of that profit, he said, "not one euro ... comes from Italy."

"We still have a loss," Marchionne said on a RAI state TV show Sunday night. "If we were to eliminate that Italian side from our results, Fiat would do more."

"One cannot forever manage operations that are at a loss," Marchionne said. "The majority of our competitors would have found the way out."

Marchionne cited poor labor efficiency but also blamed a system that he said had lost competitiveness over the years. He said Italy had been lagging behind in the past decade.

However, he also said one of his goals is to raise a worker's average salary -- about €1,200 ($1,600) monthly -- and bring it closer to that of European counterparts.

Some unions reacted angrily, saying Marchionne's real intention was to abandon Italy and outsource production.

Rocco Palombella of the metalworkers union Uilm urged Marchionne "to stop humiliating workers."

Guglielmo Epifani of the CGIL, Italy's largest union, was quoted as saying Monday that "Marchionne is very skeptical over the future of Fiat in Italy" and that "the truth is Marchionne wants to leave Italy."

CGIL has been the toughest in its opposition to Fiat. Its metalworkers' branch, FIOM, has rejected Fiat's plan to move production of its new Panda compact from Poland to a plant near Naples, saying that the labor concessions Fiat wanted amounted to eroding workers' rights.

Fiat said it would go ahead with the plan, which envisages a €700 million ($903 million) investment, despite the unresolved dispute with the union. But Marchionne has also said recently that the resistance to Fiat's plans has forced the automaker to slow its planned investments in Italy.

Marchionne's straight talk is unusual for a public figure in Italy, and has drawn him both praise and criticism. Moderate union leaders and some politicians credited him for speaking about the country's real problems, such as the lack of productivity.

But his comments Sunday night also angered some government officials, who were quick to remind Fiat of the government incentives to scrap old cars and buy new ones, a program that supported Fiat sales during the recession.

Roberto Calderoli, Cabinet minister without portfolio and leading member of the Northern League political party, said "Marchionne has short memory when it comes to state aid."

Maurizio Sacconi, the labor minister, said Marchionne was right in seeking better productivity, but insisted "Italy is the country where the group has been historically based."

Marchionne insisted that it had repaid its debt, both financially and through the creation of a significant industrial group.

"I don't want to be told 'Thank You' but I also don't want to be constantly accused to be receiving state aid," he said.

Marchionne, who was born in Italy and moved to Canada with his family as a teenager, has turned around Fiat's sagging fortunes. Earlier this month, the company raised its 2010 targets, saying revenues would top €55 billion -- €5 billion more than previously stated.

Fiat also said it expects to raise its stake in Chrysler to 35 percent by the end of 2011, but that hurdles remain. Fiat took the initial 20 percent share in mid-2009.

He calls it as it is. I give him a lot of credit for that.

I don't see the offer of building a Panda plant in return for concessions as much of a deal. The Union sees that they WILL give up something in return for something that does not exist and maybe never will.

If a plant was already in production and FIAT said they would add jobs there that would be a different matter. GM did this with several of its plants years ago, but they did not ask for Union concessions. They just had a two year quality competition and the plants with the best quality were the ones that stayed open. GM quality went way up and everyone understood why their plant was closed.

One of the ways a person was promoted or let go during my days at BIG oil was to see how they handled problems. Any Manager that blamed all of their problems on the Union was not upper-management material since the company needed problem solvers and not whiners.

One upper-upper manager laid all of his problems at the Union's feet and one year later found himself demoted from a job that paid $2,500,000 a year to one that paid $120,000. His replacement simply asked the Union what the problem was and they talked it over and worked it out.

The company CEO was killing time in the Control Room one day and we asked him about this. He said if you want to just dig in your heels and let your ego be your guide you could do it somewhere else. He had a company to run and already had enough royalty around him.

So we thanked him for the compliment and told him if he ever needed anything we, as in the Royal 'We', would be happy to consider his requests. He later sent us some odd brand of Coffee that had the name 'Royal' in the title and wanted to know if we could drink it until we choked.

We sent a reply that we would be happy to consider his request, but it would depend on the quality of the Coffee!

MGBURG, this is a perfect example of someone other than myself who can relate with FIRSTHAND EXPERIENCE OF THEIR OWN concerning Unions. The "I can't tell you because it's super secret" or " that's what I heard from ....." really doesn't hold much credibility;). Now I am done wasting my time on this,good day, and thanks to Pooka for relating a actual experience .

The old 'If you do this I might do this' thing is what we used to call the Breakfast Theory of Motivation.

Breakfast consists of ham and eggs. The Chicken is involved in the process, but the pig is committed 100% no matter what the outcome.

there was a thread before about grizzling frogs not happy with their retirement age going up. Well as any true Aussie would say "if its not the frogs complaining its the wogs" !!

I can see both sides of this. All of the industrialized world is undergoing a transformation (with the possible exception of France) to better align its industrial capacity/output to the globalized economy, where all manner of new competitors abound. As a major industrial leader, Mr Marchionne has an obligation to clearly express the requirements for a successful transformation, at least as those requirements appear to him. Denial is only a fool's friend.

At the same time, the livelihoods of many thousands of families shouldn't casually be dismissed. In the end, situations such as this work themselves out, sometimes for the good of the company and its employees, and sometimes not. That's where clear-eyed leadership by labor and management comes in. We've heard the posturing and bravado; time will tell if the hard work of quiet, mutual leadership behind the scenes can make the transformation work for the FIAT "family" or not.

Italian auto worker unions would do well to review the history of the British auto industry/unionized workers relationship through the 1970s to get an idea of what the future holds for them.