Fiat workers and Italy's 'Accord'

Wednesday, September 11, 1991

By Sally Low

Bill Kelty and Laurie Carmichael are often hailed as the brains behind the ALP-ACTU Prices and Incomes Accord but a short overview of the evolution of trade union and left politics in Italy since the late 1970s suggests at least one source of their inspiration. SALLY LOW, in Milan and Turin reports in the first of two articles.

The northern Italian cities of Milan and Turin are both important industrial centres especially for the car companies Fiat and its subsidiary, Alfa Romeo.

Since the late '70s Italian industrialists have struggled to increase their international competitiveness. In 1979 the lira became part of the European Community's Exchange Rate Mechanism, so it was no longer possible to boost exports through devaluation. At the same time, the international car industry faced a crisis of overproduction.

Throughout the '80s, industry aimed to reduce costs by raising productivity, using new technology and reducing the labour force. As well, employees' real wages and conditions were attacked. Fiat's strategy was to maximise, not sales, but the return on each unit sold.

Having regained some competitiveness during the '80s, Italian products are again being squeezed out of markets, and the car industry faces particular difficulties.

Apart from Germany, where union with the former German Democratic Republic has opened new markets and led to a jump in demand which has mainly profited Volkswagen and Ford, the western European car market is in recession. According to figures in the August 30 Financial Times, excluding Germany, new car sales in western Europe during the first seven months of the year were 10.4% lower than in the same period last year. (If German sales are counted, the figure is 4% higher than in 1990.)

Fiat's share of total new car registrations dropped by 8.5%. While it relies on exports for 40% of sales, the company has also come under pressure from imports on the domestic market. After the technological innovations of the last decade, Italian employers' main target now is unit labour costs, which, after France, are still among the highest of the leading industrialised nations. That is, they want to drive down real wages.

Talks between the country's three main union confederations, employers and the Christian Democrat-dominated government resume this month after a summer break. One of the main topics for

discussion is the employers' demand to do away with the scala mobile, the sliding scale that has traditionally linked wages to inflation.

The scala mobile has been under attack for some years and has already been cut to around 48% of the inflation rate.

Communist role

Employers could not easily have achieved the cuts in employment levels and working conditions they did during the 1980s without the active collaboration of the union leaderships. In particular a crucial role was played by the biggest federation, the CGIL, which is politically dominated by the former Communist Party of Italy (PCI).

In February, the PCI changed its name to the Party of the Democratic Left (PDS). Its political evolution over the last decade has been reflected in changing attitudes towards capitalism, the possibility or desirability of socialism and more immediately in its analysis of what political and economic objectives trade unions should adopt. Not only within the union movement but also in the broader community, the party propagated its new outlook.

Rocco Papandrea has worked for over 20 years in the Fiat plant at Turin. He is a member of the FIOM, the metal industry sector of the CGIL, and a leader of the opposition left tendency within the CGIL. He explained the changes within the Italian trade union movement during the 1980s and the role played by the PCI and the CGIL leaderships.

He described as a "historic compromise between the PCI and the Christian Democrats" the 1977 decision by the country's trade unions to accept certain austerity policies demanded by the government. The CGIL undertook not only to moderate future demands but also to give up conditions already won.

Councils

At first these austerity measures could only be applied in a very limited way but another important decision at this time, "the so-called reform of the councils", aimed to change this situation.

Industrial sector unions were organised in factory-based workers' councils which united members of all the trade union federations. In the metalworkers' unions, this unitarian structure was called the FLM and to individual unionists was more important than the different federations. Workers could, and many did, affiliate only to the FLM.

The reform aimed to destroy the councils. But first the workers at

Fiat had to be defeated. This happened in 1980.

"You could say that the Communist Party, the bosses and the unions reached the same conclusion: if they wanted to change the situation, first they had to defeat the strongest section of the workers, and that was the Fiat workers, especially at their biggest factory here in Turin. Fiat employed about 100,000 people, of whom about 50,000 worked at one factory.

"The owners had big problems because those were the years of an acute crisis in the car industry. During the '70s Fiat had made important technological changes, but because of the situation in the factory and the strength of the working class, they could not use them to increase productivity."

Managing for the company

At that time the PCI, which had members elected to important local and regional government bodies, even accused Fiat of employing more workers than it could sustain. Its theme was that the employees had to take responsibility for the welfare of the company because management was not doing the job properly.

In the years following 1980, said Papandrea, Fiat management revealed that they had in fact held meetings with the Communist Party and discussed how to deal with the situation. Leading up to the clash at Fiat, the party's paper L'Unità, like most of the rest of the mass media, campaigned around the depth of the crisis.

Union leaders, on the other hand, underestimated the depth of the crisis faced by Fiat. They said the threats of sackings were not real and therefore left the workers unprepared for the "life or death struggle" that eventuated.

"Nevertheless, when the attack came there was a very strong response and great solidarity from other workers. The cause of the final defeat was the attitude and behaviour of the union leadership, who helped Fiat management behind the scenes", claimed Papandrea.

A victory would have been possible if the union leadership had taken advantage of the vast solidarity shown by workers in other sectors to call a general strike. On the contrary they "manoeuvred to isolate and divide the workers".

The final agreement conceded all of Fiat's demands. Of the 23,000 people laid off, only a few thousand were rehired over the next six to seven years. In Turin, about 25% of the workers in the car sector lost their jobs. Papandrea claims that mass meetings actually voted to reject the agreement but the unions falsified the results.

"The lay-offs were of course selective. Most of the militants were pushed out. Fiat management was again able to take control of the factory, and the climate changed completely.

"After this defeat, it was possible to restructure the union. Even within the hierarchy, the more or less left leaders, whose strength came from their links with the workers, were either eliminated or marginalised."

The next most important attack was over the scala mobile. The unions signed an agreement to reduce it but were forced to back down in the face of a spontaneous outbreak of strikes which threatened to generalise.

"As the strike wave receded, they again consented to reduce the sliding scale. There was a big national demonstration in Rome where half a million workers were shouting 'don't touch the sliding scale', but from the platform the union leaders said, 'We are going to'."

Subsequently the government passed a law to enforce reductions. The CGIL opposed the law and thus broke ranks with the other main union federations, the UIL (Socialist Party and Republican Party dominated) and the CISL (Christian Democrats and some Socialist Party). It was too late.

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