I’ll tell you about the deception of the Embraco case
What's happening to Embraco. The analysis by Mario Seminerio, editor of the Phastidio.net blog
In recent days, the Minister of Economic Development, Giancarlo Giorgetti, threw in the towel about the possibility of creating an Italian compressor hub, involving the Piedmontese Embraco, which has been in limbo for about three and a half years, and the Venetian Acc, which he fights heroically with pay cuts and waiting for a new buyer.
A paradigmatic case of therapeutic persistence in the name of an unlikely reindustrialization, as well as of deceit against hundreds of workers. Because there is not only Alitalia: other striking cases are engraved in the news and in the proclamations of politics, in a perverse compulsion to repeat.
Giorgetti therefore declared yesterday:
“We explored, together with Deputy Minister Todde, all the possibilities of the Italcomp proposal of the Acc extraordinary commissioner that could have involved Embraco. Unfortunately, although aware of the delicate and difficult situation, the essential conditions, that is proposals from private investors, to continue successfully along this path are not present. The objective is to overcome the current stalemate and in this sense the assessments of Deputy Minister Todde continue unabated, who has my trust and who has been following the story of this crisis for some time ”.
It was the year 2018
We recall the now dated background: at the beginning of 2018 (yes, over three years ago), Whirlpool, a US multinational, announced the decision to close the Riva di Chieri di Embraco site, its Brazilian subsidiary, which manufactures compressors for refrigerators. From that moment, an incredible political saraband begins, made up of initiatives in the European context, appeals to virtually anyone, indefinite layoffs.
The then Minister of Economic Development, Carlo Calenda, went to Margrethe Vestager in Brussels raising the suspicion that Slovakia, where the plant is relocated, has abused state aid. A lunar debate develops on the alleged wage dumping of Eastern European countries, forgetting the different phase of the economic development of these countries, and the relative productivity differentials, which also imply a different cost of labor. Surreal ruminations begin but always based on the guilt of the usual "Brussels bureaucrats".
All this forgetting that, if Italy has industrial productions with low added value, its destiny is to lose them to the advantage of countries with lighter cost structures. In other words, it is confirmed that our country has been stuck in productions of a previous industrial era, and has largely missed the "leap of state" in the added value chain.
It seems, therefore, that the production of refrigeration compressors is not exactly on the technological frontier, and consequently tends to move towards emerging countries. Everyone knows this except Italian politics; that on this company, in a time of triumphant populism, is embarrassed as if it were a jewel of artificial intelligence or biotechnology.
In the meantime, the then president of the European Parliament, Antonio Tajani, thinks well to contact the Brazilian Minister of Industry, given that Embraco is Brazilian, forgetting that the aforementioned minister of the Riva di Chieri plant probably couldn't care less. The workforce downsizing maneuver began with incentivized resignations, accepted by a few dozen employees out of the company's nearly 500 employees.
Here comes the White Knight, broke
At Mise the reindustrialization activity is in full swing, with the famous crisis tables. The inevitable Invitalia by Domenico Arcuri is invoked, which must receive expressions of interest. On June 26, 2018, Calenda announces the good news:
“The reindustrialization project that we negotiated together with the trade unions was formalized today. It is the demonstration that with concreteness and serious work, rather than with slogans, the effects of relocations are fought. But we must continue to watch until the end ". (Handle)
Unfortunately, the minister will prove prescient with this last sentence. In July, however, the case seems happily resolved:
"The new era for Embraco begins: Whirlpool leaves the scene and, in Riva di Chieri, in Turin, Ventures arrives, a Sino-Israeli company that will produce robots to clean photovoltaic panels and, later on, systems for the purification of waters. The arrival of Ventures, which saves all 400 current jobs, was celebrated by a few hundred employees, present with their families in the factory, where a buffet was organized with a toast of good luck ”. (Ansa, 20 July 2018)
Statements of the new ownership follow, which transport us to a kibbutz:
“We are here because we want to become a leader in the field of robots for cleaning photovoltaic panels. We have chosen this company for the great professionalism of the workers. We are a large family, not a multinational. We will be colleagues ”, the Italian partner Nino Di Bari and the Israeli Ronen Goldstein told the workers. The Facebook page used by workers during the long dispute remains open (Ansa, 20 July 2018)
Take the Money and Run
The new property has a "good income" consisting of layoffs for 24 months for renovation, signed on 11 July 2018. The large family can leave. Unfortunately, Ventures runs out of money quickly, it is not clear if why he had it or if for other reasons, a circumstance that should have made us reflect on the ability to evaluate the white knight.
Which turns to local politics, explaining how much its financial needs are. The unfortunate replied, invoking new bank loans:
Ventures needs 3 million from the banks to start production at the former Embraco. The plan is 6-7 million. The regional councilor Elena Chiorino said this in front of the factory gates.
“For the first time, the property has acknowledged that it does not have the financial capacity to do an intervention on its own. For this reason, next week we will organize a meeting between the credit institutions and the property ”, explained the president of the Piedmont region Alberto Cirio. Cirio has promised the workers that he will already hear from the Ministry of Economic Development today to ask for a table to be convened on the former Embraco. Coaches will be organized to bring the workers to Rome. (Ansa, 16 September 2019)
Whirlpool also appears to have been duped, however. But above all, he puts his finger on the scourge of the Italian government and Invitalia. The bold bold is mine:
“Although the site was transferred to Ventures in July 2018, and therefore we have no legal obligation in this matter as former owners, we are preparing to legally pursue Ventures to ensure that the site workers can benefit from the escrow funds set aside during the transfer to facilitate the re-industrialization of the site ".
This was stated by Whirlpool Corporation in a note in which it reiterates "its deep concern about the situation of Riva di Chieri and its impact on the workers of Ventures".
“When Whirlpool decided to exit the compressor market in 2018 – explains the company – Ventures was selected, on the basis of a program positively evaluated by the Italian government and Invitalia, to lead the reindustrialisation of the site. Since then, Ventures has not fulfilled its commitments and since December 2019 it has been relinquishing its responsibility to pay the site workers, despite having used the resources of the escrow fund.
We are disappointed with the way Ventures has handled this situation. It is starting from the respect and empathy that Whirlpool feels towards Ventures workers, their families and the community, that we have decided to pursue legal action "(Ansa, 4 June 2020)
From here begins the end of the affectionate Ventures family, which had so favorably impressed our government pro tempore:
Searches and seizures by the financial police have been underway since this morning between Piedmont and Lombardy against Ventures Srl, a company that acquired the business branch of the former Embraco with the sale of the industrial site of Riva di Chieri (Turin). Faced with the substantial production inactivity of this site, the investigations of the yellow flames of Turin have reconstructed the presence of cash flows, also directed abroad, which led to the drying up of the company coffers and the foreclosure of company resources. (Ansa, June 19, 2020)
Redundancy fund producers
On 23 July 2020 the Court of Turin declares the bankruptcy of Ventures srl, and the Ministry of Labor rushes with the granting of the one-year extraordinary redundancy fund for termination, fixed retroactively for this event. Oxymorical because, the cigs for termination is dispensed pending the materialization of a buyer, here non-existent. With these expedients, one can continue until the dawn of time or the night of the Republic and its public accounts.
To be honest, in those days, there was even a singular abundance of cig shapes available:
The social safety nets will be immediately available for the more than 400 workers of the former Embraco. This was stated by the undersecretary of Mise Alessandra Todde after the meeting in the Prefecture.
“The extraordinary redundancy fund for termination was requested by the bankruptcy trustee. There is also the possibility of using the 18 months of the Covid layoffs ”, explained Todde. In connection there was also the Ministry of Labor. "The Piedmont Region, as it has done on other occasions, will favor the advance of the redundancy fund from the banks," said the president Alberto Cirio. "The resources are there, but the layoffs are not enough," added the mayor Chiara Appendino. (Ansa, 5 August 2020)
We are a country poor in natural resources but rich in social safety nets, it seems. Only time to return from the well-deserved post-pandemic vacation (at least, so we thought), and the volcanic five-star undersecretary Todde pulls a brand new rabbit out of her hat:
A hub for the production of 6 million refrigeration compressors is born by 2024, which includes the former Embraco plants in Riva di Chieri and Acc in Belluno. The total investment is 50 million euros between public and private. The news was made official in the table convened by the undersecretary of the Mise, Alessandra Todde, at the prefecture of Turin. "The goal is to reach full employment at the end of the plan, in the meantime, layoffs and training will be guaranteed", said Todde (Ansa, 15 September 2020)
End slowly, never
Full employment, training, layoffs, public-private partnerships, to comply with EU guidelines on state aid. “The European hub of refrigeration compressors is born”, I also remember reading. Always perched on the technological frontier, near the Mise. Not bad, right? This is how industrial policy is done, by golly. Yesterday, Giorgetti told us that unfortunately, there is no trace of the private investor.
And there continued to be none, despite suggestions to involve him not on an equal basis but also with a minority stake. What to do with it, detach fairy dividends? On May 19, in fact, the governor of Piedmont had ruled that
“We need a certain date. We all set the deadline of June 30th together. on July 1st, if the private investor is not found, we will put plan B on the table ”.
The problem is that this was not plan B but a very subsequent letter of the alphabet. But what exactly was it supposed to be? Perhaps a request to the EU for a derogation for public aid by exploiting the pandemic suspension, to fight against the anti-historical neoliberalism and create an entirely state-owned company of refrigeration compressors, of those that would have sent the good Joseph A. Schumpeter and the its creative destruction? Maybe with capital provided by some state venture capital? Or a conservative intervention (ie embalming) not before having reported yet another case of market failure? Ah, to know.
The lesson we take home from this painful story of protracted and continued deception of several hundred workers is that this is the way in which industrial policy and turnarounds should not be managed. That a country that has lingered in the suicidal embalming of irreversibly declining sectors is condemned to destroy further fiscal resources, in a dramatic twist, accompanied by the launch of toxic slogans and very black comedies of self-deception.
But the former Embraco crisis has been in existence for less than four years. It can be said that it has just been born, given that this year we celebrate the tenth anniversary of the reindustrialisation of Termini Imerese, and of its truly extraordinary layoffs.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/vi-racconto-linganno-del-caso-embraco/ on Mon, 19 Jul 2021 08:06:17 +0000.