Wednesday, 12 January 2011

The Social Market Wobbles

With the intervention of Silvio Berlusconi in the FIAT labour conditions stand-off Dr Marchionne's position as industrial rather than political is called into question.  Undoubtedly the opportunism and insouciance of Berlusconi speak for the former; furthermore Berlusconi's statement that FIAT's relocation of its car production (to Serbia or Canada or Poland or Brazil or wherever) outside Italy would be wholly understandable and greeted with no intervention by his governmen, makes the removal of his government urgent.

Equally, if Berlusconi's intervention is welcomed or, worse, programmed, then the view that the promised investment is and always was nugatory, and that Marchionne has constructed an exit strategy from what he considers  to be an undesirable production area riven with leftist confrontational mindsets and bolshie workers, and inappropriate institutions from trades unions right up to the articles of the constitution of the Republic, stands.

The FIAT workers represented by the FIOM, essentially the metal bashers, must vote on accepting a new company as their employer - a new company which is a joint venture between FIAT and Chrysler, outside the collective national contract for metal workers; and like all multi-national companies, the distribution of profits among its component parts can be manipulated at will by arbitrarily fixing transfer prices.  They must accept worsening conditions although they are being offered small pay increases for accepting productivity improvements.  (It doesn't help their cries of pain that the FIOM called a one day strike on the day Italy was playing in the last World Cup.  Not clever at all).

Unlike Germany, trades unions are not represented on the boards of companies in Italy; unlike the Chrysler workers in the United States there is no ownership in the company (even if that ownership came from compensation for pension funds lost, it has since served other purposes).  The Italian FIAT workers stand to lose everything unless the government takes up its constitutional responsibility to come to their aid and, preferably, defence.  Not to mention the defence of a major sector of Italian manufacturing industry.  And the aid of fellow workers from other Unions who have already accepted the new terms and new company.

FIOM is now threatening to call out all metal workers and 'all social movements':  the students,  the anti-privatisation groups, the anti transport- and fuel supply-networks groups, the anti nuclear and environmentalist greenies, the dissident street protest groups.  Their policy seems to be street riots and social disruption as a substitute for years of proper negotiation on the wages and conditions and industry status of those they represent in the car factories.  (Quite a familiar story there).

The dead hand of realised socialism is still reaching out from the 20th century to mar the lives of working people in advanced capitalist societies. Some Union leaderships are as much renegades as was the renegade leadership of the security services  in the anni di piombo; the scenes outside the factories in Turin are distressing in the extreme as workers refuse the demands from FIOM stewards and union officials that they should vote No.

The Democratic Left party has split along the socialist/liberal stress lines.  Did Marchionne mean to do all this?  Not, perhaps.  But never should the social democratic movement have allowed such a scenario to become real because it will not confront and recast the trades unions from which it draws so much of its membership and political validity (and financial resources) into modern institutions representing labour through all the changes globlisation is bringing.


Odin's Raven said...

Don't some people realize that in the 'Globalized' economy, "your wages are set in Shanghai"?

If the future is set in BRIC, the only comparative advantage Europe may be able to expliot is as a plastic tourist parody of it's past.

hatfield girl said...

Indeed, Raven, but in some nation states there are still constitutions and constitutional courts enforcing them; and Italy is a republic founded on work with entrenched rights to the enjoyment of work.

Exporting FIAT to Serbia, Poland, Brazil, and north America runs smack into the foundation of the state.

And it all has yet to be argued out. Unfortunately the people's claims in Italy are embedded in the law and in the formalised politics of the Republic. The Germans have many of their closest-to-their-hearts rights - like jobs and wages and living standards - protected by the presence of their representatives on every company board in the country.

It's all very well singing 'bella ciao' and waving red flags, but 1943 is another country and those red flags are shrouds.

I see that the Union Unite! is going on about 'resistance' in its various forms to the policies that have pulled the UK back into reality.

Blue Eyes said...

Did Japan's emergence cause British standards of living to drop? Did the United States' industrial catch-up destroy Western Europe?

In the short term, yes there were difficulties, in the long term we all get richer from global trade. If 21st Century Chinese workers are willing slaves then more fool them.

caronte said...

Blue Eyes, the problem is not emerging countries catching up, but their NOT catching up fast enough to stop threatening the competitiveness of advanced countries...

Weekend Yachtsman said...

Hats, the Italian constitution may well guarantee free stuff for everyone, or some variant on that, but eventually reality will intrude.

If the result of honouring your guarantee of work means FIAT continue to manufacture in Italy, producing Cinquecenti that cost more than a VW Golf, it's hard to see how that is a sustainable strategy.

Harsh, but true

hatfield girl said...

That's the trouble with written constitutions Yacht - they do date so (except for America's).

Still, unwieldy as it is, we might expect the government to try to conform to constitutional guidelines - though this is Berlusconi of course; he doesn't do rule of law.

Caronte said...

You cannot have a right to work without somebody else having an obligation to give you a job on request. Basically you would need an Employer of Last Resort.

Moreover, full employment - understood as a high and stable level of employment - since 1999 in the Euro-zone had been replaced by an inflation target of (or close to from below) 2%.

Therefore, regardless of Berlusconi's lack of credibility and utter unfitness to govern (The Economist, several issues over the last eighteen years), and regardless of written or unwritten constitutions, a right to work is an idle, populist, impossible promise.

Weekend Yachtsman said...

@Caronte: indeed.

For Western Europe, for the last few decades, the employer of Last Resort has been the State. This is especially true in Italy, where state employees have (or had, anyway) special tax and security privileges not available to anyone else. In the UK, our decaying major cities are full of youngsters whose highest ambition is to get a nice safe job with the council - and who could blame them.

That sound of flapping you hear is the chickens; their roost is in sight, the end game approaches.