The Marchionne method

  • Italiano

Many years have passed since the beginning of Sergio Marchionne’s career in FIAT. They seem a century to me. It was 2004 and the company was basically dead. Sales reached rock bottom, the company slipped into the red, the number of laid-off workers seemed a huge army. The situation was so difficult that people talked and murmured about the nationalization of the traditional Italian car maker. There was much concern, since everyone knew that except for Mirafiori, most of the cars were produced in the Southern and Central regions of Italy: a true goldmine of jobs, which had historically strengthened areas of the country that were in need of jobs, which were guaranteed also by a plethora of small and medium enterprises gravitating around its factories. These regions would have collapsed in the event of a collapse.

At the time, I often thought about my Val di Sangro: in case of a perspective in which the production of vans would have stopped, thousands and thousands of families would have taken the path of migration, as in the 60’s; about 100 abandoned small and medium settlements. An economic activity on which an entire territorial system was based. In short, no one would have bet on that company; as it often happens in Italy to those who have fallen in disgrace, everyone began to ‘fire’ at Agnelli, often guilty of having transferred their economic suffering onto the public treasury. In this entangled situation, which was gradually becoming visible, appeared the Italian-Canadian manager.

Sergio Marchionne, departed from Chieti at age fourteen, moving to Canada together with his family. He studied law, economics, and philosophy with full profit, then, after a brief activity as a lawyer dealing with finance, he was able to stand out in… to the point that Umberto Agnelli noted him and included it in the Company’s board of directors. Soon after he became the CEO of the company.

At first, his method, unusual for Italian managers, provoked much sympathy even in the left wing. Fausto Bertinotti himself called him the best expression of good society, and this flattering opinion was significant. Yet, this idyllic situation ended rather quickly! Certain that there was need to review the productive setting of the company in the face of a noticeable decline of the cars they produced compared to car drivers’ preferences, and in the face of an economic crisis in Europe – FIAT’s only market – as soon as possible. He had to convince the managers of financial capital – who he knew well- to grant him loans for new production. He had to increase the professionalism of the workers and had to revolutionize work organization for an intensive exploitation of new and expensive robotic systems in order to reduce costs.

The European car market lost at least 30%, and the already limited shares gained by the Italian car producer consisted in small cars with low added value. Marchionne decided to divide everything, pointing mainly at the rich Middle Eastern and American markets, with medium- and high-powered luxury cars with glorious historic made-in-Italy brands such as Maserati and Alfa. To start off, the project needed a global sales network, and partners that had been on the market for some time: the purchase of the German Opel proves to be a bad step – Merkel opposed it not to harm Wolkwagen – but it manages, with complex operation and without capital, to progressively buy Chrysler, which was in serious difficulties. Thus, in the end, in the US it sells many, 500 Maserati, Alfa Romeo, and Ferrari. Chrysler strengthens its position in North America, whereas the most prestigious American car, the Jeep, begins to be built also in Italy, in the new plants in Melfi.

But at the beginning such an ambitious and complex project was not comprehended. So much so that the opposition of a part of the Trade Unions became more and more heated. They did not want to change the organization of work along with the contractual regulations of the old Taylorism. But the company was firm on this point: new plants that costed significant investments to Pomigliano, Mirafiori, Grugliasco, Melfi, and Cassino Valdisangro, had to work 24/7 with three 8-hour shifts. It was evident that they could not count on the FIOM Syndicate; Marchionne asked warranties from me and Angeletti. Without them, he would have left the company to its own devices. Certain that the industrial project was good, which had no alternatives in any case, we made the deal to move forward at any cost, in order to obtain the investment and employment stability. Began an unusual conflict between Landini who made a lot of echo, thanks to the blatant support of the media, the press, and that of the television. The leader of the FIOM could count on the radical left wing, but also on the sympathy of a good part of the Democratic Party. Then there was the aversion of major Italian banks towards FIAT. Old grudges and jealousies in the business world.

Meanwhile, Landini was organizing strikes wherever it was possible. The accusation rested on an alleged damage to the contractual rights of the workers, caused by the new labor agreement between the Company and the FIM CISL, UILM, FISMIC, and UGL Syndicates. But the referendums in the factories supported the unions. Marchionne, in those circumstances, the data unexpectedly showed irrepressible characteristics of his nature. Irritated by the overheated climate against him, he began to answer through the media and to use all legal and contractual loopholes that seemed useful to damage FIOM. In my opinion, it was not the best way to deal with the situation, which was already severely overheated, and I said it publicly several times causing his resentment. Of course, workers supported us and it made no sense to give Landini the chance to appear as a victim. It looked like FIAT’s CEO wanted to try his chances at several negotiating tables; for example, at the one with Confindustria, which he left with much ado and accusing it of failing to meet the Company interests.

His complaints about the hostility he perceived from the ruling class exasperated him and he expressed them at every meeting. Sometimes even with the allied Trade Unions, his behavior was not always pleasant. On one occasion, he had a bad argument due to the fact that he had told the press that he stepped back on the question of contractual issues. Therefore, he called me on the phone to complain in a quite rough way. I answered him in a similar manner that I was taking orders from the Trade Union, although my loyalty to my word would not have changed.

Soon after he acquitted himself with an agreement which concerned FIAT Valdisangro, about which I cared a lot. He often complained about the high percentage of absenteeism in that plant with me because of my origins. We proposed to increase allowances to 100% of the remuneration for overtime on Saturdays, from which could benefit only those whose respect of works schedules was impeccable. I and Angeletti waited for him in a private room at Ciampino airport: an hour of debate, then left for Geneva on his private jet.

Years later, we can say that the many allegations made against Trade Unions agreements and against FCA (the new acronym of the Italian American car producer), have proved unproven. Ultimately union agreements have resulted in the only important investment in the long Italian economic crisis. Jobs have been maintained, perhaps even increased, the layoffs rarefied, positive sales, budgets closed with nice profits. FCA is accused of being tax based in the Netherlands, but that is an Italian problem. If a European country has lower tax rates than ours, the problem is with us, considering that we are a full member of the international competitive market. Exactly as some people believed and still believe that our country can have Trade Unions relations regardless of what happens on the global market.

Marchionne may have been irreverent, quarrelsome, touchy, but gave very important results, despite the dark period of the European market, despite an even deeper crisis in Italy, probably because it is still difficult to take note of the fact that the king is truly naked.

Avviso: le pubblicità che appaiono in pagina sono gestite automaticamente da Google. Pur avendo messo tutti i filtri necessari, potrebbe capitare di trovare qualche banner che desta perplessità. Nel caso, anche se non dipende dalla nostra volontà, ce ne scusiamo con i lettori.