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From Marchionne's challenge to today's Electrolux: the unresolved issues of competitiveness

When the CEO of Fiat raised his alarm on the competitiveness of Italian industry by proposing a path to increase productivity, he was greeted with annoyance by the establishment, but today the Swedes at Electrolux are forced to imagine an even more drastic recipe based on cutting almost half the salary – Will Italy understand the lesson?

From Marchionne's challenge to today's Electrolux: the unresolved issues of competitiveness

Marchionne had timely launched a strong alarm on Italian competitiveness and on the risks of deindustrialization that our system was running due to the low productivity of both labor and total factors. But he had been greeted with annoyance both by the political system and by the world of the media, where Fiom secretary Maurizio Landini shouted against the violation of the Constitution and the compression of workers' rights. Now the Elettrolux case, three years later, emblematically represents the abyss into which we have fallen due to not wanting to make those changes in time which would have been much less painful for everyone then.

The Swedish household appliance company, which is having to deal with a sharp fall in demand in Italy and fierce international competition, said that Italian production costs are too high and that therefore, in order to be competitive, it is necessary to eliminate a whole series of use of factory labor and above all that it is necessary to reduce the cost of labor by cutting wages by almost half. In return, it will be able to make investments both in products and in plants to keep the productions of the Italian plants attractive on the markets.

A much more drastic recipe than that of Marchionne, who had essentially proposed an increase in labor productivity through a reform of bargaining, moving it from the center to the periphery and thus introducing forms of flexibility and guarantees on the full use of the plants, which they would have led to a reduction in the cost of production, while allowing the workers even an increase in their pay packet (at the time calculated, when fully operational, at almost 3 euros a year). 

In short, the greater productivity obtained from the plants would go partly to the company to keep the prices of its products competitive and partly to the workers. And this without considering the other necessary economic policy measures that a Government attentive to the competitiveness of the Italian system should have implemented: from the reduction of the tax and contribution wedge to the improvement of infrastructures, ending with the streamlining of bureaucracy, essential for the life of businesses, especially to encourage exports.

Nothing substantial has been done in the last three years. The Fornero reform of the labor market did not concern bargaining over which Confindustria and the large trade union centers claim their exclusive competence, except for modifying little or nothing or signing useless protocols which, delegating to the individual categories the right to agree on any exceptions to the contract national, will in fact remain a dead letter. Labor law, made up of a mass of rules stratified over time, is in fact an inextricable tangle that gives rise to continuous judicial appeals to which the judiciary gives the most disparate answers. The result is maximum legal uncertainty, both for businesses and for workers.

Many continue to request an industrial policy based on state intervention in individual "sectors", while a policy of "factors" based on the elements mentioned above would be necessary, to which must be added a normalization of credit through a farsighted strengthening of the banks (challenging the many demagogues who shout against alleged gifts to credit companies), and a real and serious policy of liberalization and privatization (in that order) which is opposed by a formidable group of politicians and state boyars. 

The Fiat and Elettrolux cases are obviously very different from each other. However both testify to the delays of our political and economic system, which intervenes only when the eggs have been broken and it is very difficult to put them back in the shell. Of course, an almost 50% cut in a worker's pay is unacceptable. But to avoid this, it will be necessary to stop looking for a new patch destined to be short-lived: it will be necessary to immediately address the basic problems that make our country an unattractive territory for Italian and international companies.

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