Genoa - The sale of troubled Italian Ilva steel plant to private interests will not contain any employment clauses. Furthermore, looking ahead at a business plan with a target production of around six million tons, estimated redundancies would be 3,500-4,000 workers out of the group’s current total workforce of 14,000. On the day when Italy’s government is to start discussions with trade unions, a welcomed initiative by the CGIL, CISL and UIL unions, rumours abound. According to deputy minister Teresa Bellanova “conditions are present to enable Ilva to resume making steel in a safe and environmentally friendly manner.”
According to analysis by Secolo XIX/The MediTelegraph the thorny issue of jobs is not solvable. Sources explain that during the meeting with the unions the Minister for Economic Development, Carlo Calenda, admitted: “Don’t ask me to insert any job guarantee clauses because if we do we won’t receive any offers.” The bitter, but simple truth; if Ilva, prior to being put under court administration, employed 14,000 workers for a nine- million-ton output, scaling down to an output of six to seven million will require a smaller workforce. From what has transpired so far, the steel maker’s employees would transfer in their entirety to the new company that is to emerge after the sale, only to then be managed through heavy doses of social safety nets. It is a social bomb that’s ready to explode, but one that the government has procrastinated over, awaiting the results of the constitutional referendum. Although it is true that the two main joint buying bids are on track to be presented to authorities by the 30 June deadline, there will be no talk of a business plan for the plant before October or November. In fact, following the 30 June deadline, the government will appoint three experts to evaluate the environmental aspects of the plan: a process which will take another four months. “There’s been a lot of time wasted and there’ll be more of the same,” predicts Rosario Rappa, the national secretary of the Italian Metalworkers Union (FIOM). “The need to revise the environmental plan stems from the fact that current Environmental Impact clearances contain a number of requirements in the face of an output equal to 8 million tons of annual steel production. The bid proposals are likely to propose plans with lower production thresholds which will call for a proportionally reduced list of environmental measures. What’s important though is that any discussion on jobs will not figure on the agenda till November, at least.” In other words, workers at the Taranto, Genoa and Novi Ligure plants risk being stuck between a rock and a hard place - because while today Ilva is not in a liquidity crisis, by the year’s end it very well might be. The unions recognize the government’s will to solve Italy’s steel industry issue, but accuse it of too many errors and accumulated scrapped projects over the past four years: “Ilva attracted too many experts that took turns making bad choices,” says the secretary general of another Metalworkers Union, Marco Bentivoglio.Erdemir and CDP
There are two joint-bid offers on track to take over, probably on lease, the Taranto, Genoa and Novi plants. One, formed by Italian Arvedi steel and its Turkish competitor, the Erdemir group, appears to have a distinct advantage. Italy’s state lender, CDP, appears geared to participate in this consortium because Erdemir offers better industrial prospects than the rival bid by ArcelorMittal, the world’s top steel producer. Erdemir lacks production facilities in Europe, and has therefore increased interest in integrating Ilva into its group, has more solid accounts and is a growing company. Also, Leonardo Del Vecchio, one of Italy’s richest entrepreneurs, would come alongside CDP. And there’s more: intelligence gathered by Secolo XIX/The MediTelegraph seems to indicate that the Arvedi-Erdemir plan (which will today be heard in the Senate) includes restarting blast furnace number 5, which provides the group with a huge economy of scale advantage, since it, alone, accounts for 40% of the production at Ilva Taranto. The plan also envisages the replacement of some minor blast furnaces with electric furnaces, as a means to reduce the environmental impact.