Fiat
has quit Confindustria, the Italian business group that
represents around 140,000 employers, citing its
unhappiness with labour laws and lack of flexibility, an
action that brought a hash response from the body as
well as unions.
Quitting Confindustria will allow Fiat to implement more
flexible, individually negotiated settlements with its
workers rather than the national bargaining system it
has to adhere to at present. This nation framework has
already been chipped away with new agreements
implemented by Fiat during the last year with its
workforce at the Pomigliano d'Arco, Mirafiori and
Grugliasco factories. Investors didn't respond
favourably to the announcement and Fiat ordinary shares
lost 3.22 percent at the close of yesterday's trading in
Milan.
Open letter from
CEO of Fiat and Chairman of Fiat Industrial, Sergio
Marchionne, to the President of Confindustria, Emma
Marcegaglia
"In recent
months, after years of inaction, two important decisions
were taken in this country with the objective of
creating the conditions necessary to revitalize our
economic system. I am referring to the interconfederate
agreement signed by national trade unions on June 28th
and promoted by Confindustria, and, even more important,
the passing of Article 8 by Parliament that provides
essential mechanisms for labor flexibility, in addition
to extending the validity of the June 28th agreement to
agreements reached prior to that date.
"Fiat was
immediate in expressing its unreserved appreciation to
the government, Confindustria and trade unions for the
two provisions that would resolve many sticking points
in relations with the trade unions and provide the
certainties necessary to this nation’s economic
development. At a particularly difficult time for the
global economy, this new framework would have enabled
all Italian businesses to compete internationally under
conditions that are less disadvantageous in comparison
with those of our competitors.
"However, the
signing of the interconfederate agreement of September
21st sparked a heated debate that – as a result of the
contradictory positions subsequently taken and even
declarations by some of their intention not to apply
those agreements in practice – has significantly
diminished confidence in the effectiveness of Article 8.
There is a risk, therefore, that the effectiveness of
the mechanisms provided under the new legislation will
be undermined and operating flexibility severely
limited. Fiat, which is engaged in the creation of a
major international group with 181 plants in 30
countries, cannot afford to operate in Italy in an
environment of uncertainty that is so incongruous with
the conditions that exist elsewhere in the
industrialized world.
"It is for
these reasons, none of which are politically motivated
or connected to our future investment plans, that I am
hereby confirming that, as indicated in our letter of
June 30th, Fiat and Fiat Industrial have decided to
withdraw from Confindustria with effect January 1st,
2012. We are evaluating the possibility of
collaborating, in a form yet to be agreed, with several
local/regional organizations belonging to Confindustria,
including, in particular, the Unione Industriale di
Torino.
"On our side,
we will exercise our freedom to rigorously apply the new
legislative provisions. Relations with our employees and
with the trade unions will be conducted in a manner that
does not infringe on any rights of workers and in full
respect of the roles of all concerned, consistent with
the agreements already reached at Pomigliano, Mirafiori
and Grugliasco. This important decision was reached
after long and careful consideration. It is a decision
that we cannot back away from because we are committed
to playing a leading role in the industrial development
of this nation."
