Fiat Group CEO Sergio Marchionne’s key productivity deal won narrow backing from workers of the historic Mirafiori plant in Turin, with 54% of them voting in favor of the groundbreaking contract that limits strikes and absenteeism in exchange for investment.
The agreement enables the automaker to start building Jeep models in Italy and it’s also considered as a crucial step in Alfa Romeo’s U.S. launch. The deal was fiercely contested by a more hard-line Italian union, which threatened the deal with strikes. Fiat said last week that it’s ready to pull out altogether from the country if an understanding is not reached.
However, the positive outcome means that Fiat and Chrysler can go ahead with their €1 billion euro ($1.32 billion) joint-venture, with 60% of the investment to be covered by Fiat which wants to build around 150,000 Alfa models a year at the plant. Chrysler will provide the rest in order to get an annual quota of about 100,000 units of the next generation Jeep Compass/Patriot, due to launch in 2013.
Aside from being the catalyst for further development, the new labor contract was also necessary if the Fiat Group was to improve its productivity.
In 2009, Mirafiori workers built 178,000 cars, less than a third of the 600,000 vehicles their Polish counterparts of the Tychy plant managed, with both factories employing roughly the same number of workers. That means productivity at Mirafiori averaged 30 cars per employee a year, compared with almost 100 at Tychy.
It’s clear that this is “an industrial scheme which needs to be reformed”, said Gianluca Spina, dean of the business school at Milan's Polytechnic, before the referendum result was announced.
While Fiat Chairman John Elkann said that “controversies and contrasting positions” have to be put aside and future challenges faced in “a constructive manner”, CEO Sergio Marchionne issued a much more aggressive statement, heavily criticizing the opposing union. The full statement is available below.
By Csaba Daradics
Source: Fiat & Autonews
Statement from Fiat CEO, Sergio Marchionne
We are pleased that the majority of workers at Mirafiori have understood Fiat’s commitment to transform that plant into one of international standing. We are pleased because their vote demonstrates their confidence in themselves and their future.
They have chosen not only to say “yes” to a new opportunity for Mirafiori, the opportunity to work and compete with the best. They have also chosen to take their destiny into their own hands, to take an historic step and become the architects of something new and important.
In a country such as Italy, which has always been tied to the past and reluctant to change – and yesterday’s referendum was in part a demonstration of that – those who voted yes showed vision.
Their vote represents a desire to achieve rather than being resigned to decline. It represents a courage to overcome the inaction of those who just talk and expect things to happen.
I have always been extremely proud of what Mirafiori represents for Fiat, of its role as custodian of our Group’s and our nation’s industrial heritage, and of the capability it has always demonstrated.
Mirafiori and those who work there did not give up when, in 2004, many were predicting the plant would close. Together we brought the plant back from the brink of despair, giving it back its dignity and future.
The majority of our workers have not allowed themselves to be conditioned by the many accusations and attacks of those that sought to gamble with their future. They have chosen instead to commit themselves, to dedicate their abilities and passion to making a difference. This is the best response to the lies and provocations of recent months.
By saying “yes” to the agreement, they have closed the door on extremism, that creates nothing but chaos, and they have opened the door to the future, to the privilege of transforming Mirafiori into a factory of excellence.
I hope that those who voted no, putting aside their ideologies and preconceived notions, will realize the importance of the agreement in safeguarding the future of all workers.
The plan for the Mirafiori plant is very ambitious. The company to be created in partnership between Fiat and Chrysler will enable establishment of a new platform at Mirafiori for the construction of large SUVs for distribution under both the Jeep and Alfa Romeo brands worldwide, including in the United States. This will allow us to achieve very high production levels, of up to 280,000 vehicles per year, and also open the way for the potential creation of jobs.The sole purpose of the agreement that serves as the basis for achieving all of this – the same agreement that has been at the center of so much conflict – is to ensure the plant works more effectively, without infringing on any rights.
It doesn’t penalize workers in any way. Rather, it maintains unchanged all conditions of the national collective agreement which are in their favor, as well as all those conditions which Fiat has over time extended to its workers directly. The work organization is, in fact, the same that has been experimented with at Mirafiori for more than 2 years and takes account of the level of fatigue associated with the type of work performed. The introduction of 18 shifts includes a Saturday evening shift which is the most problematic. Accordingly, it has been agreed that, even though workers are still compensated, it will only be activated if there is a real need and, in any case, will be treated as overtime. Full utilization of the 18 shifts would also enable an increase in annual pay of around €3,500 per year.
We have also taken account of other needs relating to overtime. As employees cannot always be available, we have instituted the option of substituting up to 20% of those workers who are unable to work overtime. By revising the system of breaks, reducing them to 30 minutes and monetizing the difference, we have also brought ourselves into line with standard practice at factories throughout the rest of Europe and the world. For sick leave, in relation to which many absurd things have been said, the agreement simply provides for monitoring of the rate of absenteeism, to avoid potential abuse. A commission operated jointly with trade unions will evaluate, on an individual basis, cases where the company is not liable to cover absences.
The purpose of this clause is to call attention to the problem, by provoking individual conscience and sense of responsibility, and I hope that it is never invoked.
Finally, we have simplified the compensation structure which will make pay-slips easier to read and also have a positive effect in the case of overtime or shift work, with supplements being applied to basic pay, which is higher than current minimum contractual values.
As the majority of our workers have understood, there is nothing exceptional in the Mirafiori agreement, other than the opportunity to relaunch the plant and give it the profile it deserves internationally. The criticisms leveled at us have been unjust and often frustrating. When you see your efforts being misrepresented, you sometimes ask yourself if it is really worth it.
The majority of workers at Mirafiori have given the clear message that commitment to building something better is always worthwhile.
7 Comments:
Marchionne is in absolutely no position to criticize the workers. He's an absolute failure and nothing more than that. OK, he's good at cooking accounts; then again, so is every tax evader's accountant. He's good at indefinitely postponing payments to suppliers. But he's an utterly pathetic manager and downright SUCKS when it comes to implementing a new car development schedule. What have we seen from him so far? The half-baked Lancia Delta (which should have been a lot more special than what it is, i.e. it should have been a lot more than just a Fiat Bravo with Poltrona Frau leather), the not-quite-there and not-really-ambitious Alfa Romeo Giulietta and the Alfa Romeo MiTo, whose frontal treatment looks just a bit too much like the Nissan Micra's.
Now, let's go back to 8 November 2006. What did Mr. Marchionne promise?
He promised Fiat Auto's sales would exceet 2.8 million units.
So far, total sales are well under 2 million cars.
He promised that Alfa and Lancia would each sell more than 300,000 cars.
Each one has sold less than 100,000 cars so far.
He promised that Fiat Auto's share of the Italian market would be about 35%.
It's less than 30%.
He promised that Fiat Auto's share of the European market would exceed 11%.
It's less than 8%.
And don't get me started on the debt that Fiat has accrued...
And now he places all the blame on the workers. Truly a great leader, a great manager, blaming his subordinates for his own failures.
Marchionne, exactly like every other clown that has preceded him (the idiots Cesare Romiti-Paolo Cantarella, sworn Lancia hater Luca Di Montezemolo, Paolo Fresco) is a complete and utter failure.
Yet, he goes off saying that he's not to blame for being a failure! He's not to blame for being an incompetent idiot. Well, maybe that last one does have some truth in it; it's not his fault his mother had sex with a brick and gave birth to such a moron.
But clearly, any employee with such pathetic performance would have been kicked out of his post long ago. But not Marchionne or the likes of Marchionne: even though it is painfully clear that he doesn't have a clue what he's doing, even though his presence is a liability, no one dares criticize his actions, no one goes out to say "wait a minute dude! What the hell are you doing here?". No one. Absolutely no one.
Folks, the king is stark naked. In fact, he's no king; he's just an upstart accountant who wants to play the role of the golden boy.
Also, there's another statement that's highly misleading:
"In 2009, Mirafiori workers built 178,000 cars, less than a third of the 600,000 vehicles their Polish counterparts of the Tychy plant managed, with both factories employing roughly the same number of workers. That means productivity at Mirafiori averaged 30 cars per employee a year, compared with almost 100 at Tychy."
The factory in Tychy makes the strong-selling Panda and 500; cars that Fiat can't make enough of - hence the large production numbers.
On the other hand, the Mirafiori factory makes the poor-selling Idea (and its badge-engineered sister, the Lancia Musa, which does fare better commercially, but still it's far from successful in Europe) and the aging Grande Punto/Punto.
It's not a matter of workers' productivity; it's not about the unions. It's all about the mere fact that no one wants to buy a Fiat Idea and very few people want to buy a Lancia Musa; it's all about the fact that the Fiat Grande Punto/Punto Evo are aging poorly; it's all about the fact that Fiat does not develop its models, but instead leaves them on their own!
And we see the blame being placed on the workers! Let's face it, factories don't churn out cars like there's no tomorrow. As long as there are orders, there is production. Production in the Mirafiori factory, regardless of what the neo-liberal/monetarist con artists would want you to believe, depends on the desirability of the models produced and this has to do with strategic management decisions, i.e. with the decisions of the top brass.
So, leave the workers alone and start getting on the case of the administration!
The workers aren't to blame if Marchionne and his henchmen don't know how to make a car that will sell and fit into a certain corporate image. Then again, Marchionne and his cronies and goons know nothing about the history of the industrial group they are "managing".
Sack the incompetent "managers" and CEOs now. And have them return their bonuses and stock options...
Produced less than a third of the vehicles of their Polish counterparts in the same time period. Whew! Then the Italians better take a union contract negotiated break! The Italians are learning fast from their U.S. union brothers. Get used to it Fiat, it's the 'Merican way!
OK, time to bust a few myths and some moronic neo-liberal monetarist yuppies' asses:
1. ALL industries have adopted principles such as Just-In-Time, Kanban and lean manufacturing. Therefore, a factory ONLY produces what is ASKED of it.
2. The Polish factory produces the Panda and the 500, which are VERY successful commercially and they can't make enough of these cars.
3. On the other hand, the Mirafiori factory makes the Fiat Idea, the Lancia Musa and the aging Fiat Grande Punto and Punto Evo, whose sales are now declining.
Thus, the Polish factory makes 600,000 cars because it has been assigned to make two models that are VERY desirable and, therefore, the factory works flat-out to produce them. On the other hand, the Italian factory makes only 178,000 cars because it only gets that many (actually, that FEW) orders.
And why does the Mirafiori plant get FEW orders?
1. Because the Fiat Idea and its rebadged sibling the Lancia Musa are NOT cars people want to buy.
2. Because there are now newer, better cars on the market than the Fiat Grande Punto and Punto Evo and Fiat's offerings don't sell.
Who makes the decision to produce a specific product? The MANAGEMENT.
Who has the responsibility for a product's characteristics? The MANAGEMENT, because THEY specified them.
Who has the responsibility for the sales volume? The MANAGEMENT.
The workers will make whatever car they're asked to make and they'll make as many of them as they are TOLD to make.
But they cannot make more cars than they have orders for.
If the MANAGEMENT has approved the production (or the keeping in production) of cars that DON'T sell, WHO is to blame? The MANAGEMENT or the workers (who have no say whatsoever in these decisions)?
Of course, the one who makes the decisions is responsible for them.
A manager who can't accept his responsibilities is a COWARD.
@Anonymous » January 18, 2011:
You are an idiot. See the comment above your stupid rant:
The factory in Tychy makes the strong-selling Panda and 500; cars that Fiat can't make enough of - hence the large production numbers.
On the other hand, the Mirafiori factory makes the poor-selling Idea (and its badge-engineered sister, the Lancia Musa, which does fare better commercially, but still it's far from successful in Europe) and the aging Grande Punto/Punto.
It's not a matter of workers' productivity; it's not about the unions. It's all about the mere fact that no one wants to buy a Fiat Idea and very few people want to buy a Lancia Musa; it's all about the fact that the Fiat Grande Punto/Punto Evo are aging poorly; it's all about the fact that Fiat does not develop its models, but instead leaves them on their own!
Do you know what this means? It means that one factory (Tychy) has been allocated with the production of two strong-selling products and they're working at full capacity, while the other factory makes two models that practically no one wants to buy and one range that few people want to buy. A factory only makes as many cars as it has orders for.
The ones to blame are not the workers, but the ones who designed the cars that no one wants to buy.
Time to tell the truth: the "low productivity" of the Mirafiory factory is because it does not receive orders to make cars and it does not receive such orders because these particular cars do not sell well and they do not sell well, because they are old, outdated and no longer relevant. Tychy makes more cars, because the models it makes are commercially successful and they are successful because they are up-to-date and relevant.
Do you want a factory to produce more cars? Have it produce a car that people will want to buy.
You forgot to mention that at least one of the cars made at the Mirafiori plant was NEVER desirable to begin with: the Fiat Idea. No one wanted to buy it when it was launched, no one wants to buy it now and no one will in the future.
It's not the worker's fault, it's the management's.
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