Electrolux proposes halving Italian workers' wages

Electrolux proposes halving Italian workers' wages

Swedish company Electrolux proposes to workers at its four Italy plants to take a 50% pay cut so as to keep them competitive with their counterparts in Poland and Hungary.

It is certainly not a coincidence that Electrolux’s proposal came just after the signing of the new agreement on union representation, when in the eyes of big business the Italian unions look friendlier than ever. But, nevertheless, what the Swedish multinational manufacturer of household appliances put on the table was a shock.

They proposed that the workers in the four Italian plants should agree to receiving half of their current monthly wages (down from 1400 to 700/800 euros) so they would be as competitive as the workers employed in the company’s plants in Poland and Hungary. The market, according to Electrolux, is being invaded by low-cost products from Chinese factories, and Electrolux’s only chance of survival is to move the plants to where labour costs are less expensive. Or Italian wages must become as competitive as the Polish ones.

In more detail, the company proposed slashing monthly wages to 700/800 euros, reducing the working day to 6 hours, cutting breaks, reducing production bonuses by 80%, and cutting leave time for trade union duties by 50%. And even so, the biggest Italian plant, in Porcia (in the north-eastern region of Friuli Venezia Giulia) is in danger. The company has announced the permanent layoff of 650 workers out of 6,500, reduced to 250 if working hours are cut to six a day. Michele Zanocco, coordinator of Fim Cisl union, did the sums slightly differently, making a total of 1,550 layoffs. This figure includes all those who will receive money from the public purse, either payments from the wage guarantee fund (cassa integrazione) or through a solidarity contract (contratto di solidarietà).

Immediately after the “proposal” the workers went on strike and blockaded streets next to the factories. New protests are planned as the company meets local and national governments and the confederal unions. But even inside the Democratic Party, which holds power in the Friuli Venezia Giulia regional government, there is a huge rift. While the president of the regional government, Debora Serracchiani, has said all four Italian plants should be protected, Davide Serra (a business man and big supporter of the new Democratic Party secretary Matteo Renzi) has talked of a “rational proposal to protect jobs”. When interviewed about the issue, Renzi accused the current election system, which he said prevented politicians from taking any decision. What kind of decision, he didn’t say.

Many among the radical organizations – such as the website Contropiano – are talking about an attack on Italian wages. Electrolux could be in the vanguard of a bigger move, involving firstly the whole of the Italian manufacturing sector, and then all workers.

More information and related articles are here.

Posted By

Feb 5 2014 01:10


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Feb 5 2014 16:43

Wages in Poland are closer to 450-500 euros in Electrolux.

Feb 5 2014 19:26
akai wrote:
Wages in Poland are closer to 450-500 euros in Electrolux.

don't mean this to be critical of you, but I think when the article says that the wages need to be "competitive" with wages in Poland, it doesn't mean they have to be the same. So in the UK for example we still have car manufacturing, where workers earn way more than car workers in India, however they are still competitive because the better machinery/infrastructure means that productivity is higher and other costs are lower.