A washing machine factory tests Italy's industrial future

Sun Mar 9, 2014 5:23am EDT
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By Danilo Masoni and Francesca Piscioneri

PORCIA, Italy (Reuters) - The boxy white and grey factory of this rainy northern town makes fewer than half the washing machines it did when Italy joined the euro. It is one of the many symbols of Southern Europe's industrial decline.

Today, however, the Porcia plant is also a testing ground for the region's industrial future.

Home appliance maker Electrolux, which owns the factory, wants to cut the salaries of some 5,000 workers at the plant and three other factories across Italy by up to 15 percent over the next three years. The Swedish company says lowering labor costs is the only way its washing machines, fridges and other home appliances can compete against rival products made in eastern Europe and Asia.

The Italian government, unions and workers say any wage cut would impoverish thousands of families who rely on the plant and its suppliers.

"It's a matter of survival," says Annarita Licci, a 38-year-old mother of two, who moved to Porcia in 2000, the year after Europe introduced its single currency.

Then, Italy was the leading world exporter of home appliances. Now it is ranked third, far behind China, which has grabbed more than one-third of the 100 billion euro ($140 billion) global market. Like many others, the Porcia plant has progressively downsized.

Last year Licci's partner took a company buyout. If Electrolux cuts her 1,000-euro salary by 130 euros - in line with the ballpark reduction estimated by the company - Licci says she will no longer be able to afford monthly expenses, which include a 600-euro mortgage.

"The company wants to lower its labor costs and starve us," she says. "What about investing in developing better products for this factory instead?"   Continued...

Electrolux factory workers join the union-led protest outside a factory in Porcia, northern Italy, February 28, 2014. REUTERS/Stefano Rellandini