Workers co-ops emerge from Italian small business collapse

TREZZANO SUL NAVIGLIO, Italy, June 13 Thu Jun 13, 2013 11:56am EDT

TREZZANO SUL NAVIGLIO, Italy, June 13 (Reuters) - When Italian car parts multinational Maflow imploded under the weight of the financial crisis, workers at its nerve centre in Trezzano sul Naviglio occupied the factory to protest against mismanagement and seek redress.

Now, a core group of former workers has set up a cooperative at the plant to recycle technological waste in a job creation initiative that has captured the popular imagination.

"Since we started, we've been flooded with letters from people who want to join us or do the same thing - create a sustainable future for themselves and their families," ex Maflow worker Michele Morini told Reuters.

Speaking across a table in a spartan room that was once management headquarters and that now also serves as a canteen, 43-year old Morini said he hoped business at the newly-created Ri-Maflow cooperative would grow quickly and create jobs for its 17 members and even the 300 Maflow workers that lost their jobs.

The initiative could also help raise the profile of a series of worker-managed "rescue" companies springing up across Italy from the ashes of failed firms, he said.

Since Ri-Maflow was founded in March, workers at an occupied factory in Rome, once used to repair railway carriages, have set up "Officine Zero" to do recycling work, while those at former adhesive tape manufacturer Evotape in southern Italy have created their own co-op to continue production.

Blighted by its longest recession since World War II, Italy has seen its unemployment rate rise into double digits as companies fold in the face of stagnating demand, rising costs and a credit crunch.

Italy's employers association Confindustria estimates 40 companies close every day and Prime Minister Enrico Letta has put job creation squarely at the forefront of his agenda, pledging to cut youth unemployment to below 30 percent from April's 40.5 percent.

"This is not just a crisis, it's a whole system that has collapsed. We need to reassess the way of doing things," Morini said.

FROM BOOM TO BUST

Back in 2007, Maflow was a thriving company with 23 factories worldwide supplying specialised vehicle parts, especially air conditioning, for leading automobile manufacturers.

The Trezzano factory, a 30,000 square metre plant in the industrial hinterland behind Milan, was the jewel in the crown employing 330 people to meet an order book boasting the Who's Who of the car world.

"I was in the design division. Every day we had visits from managers from the likes of Mercedes, Aston Martin, Rolls Royce, Lamborghini - it felt like it would never end," Morini said.

But it did. In 2009 Maflow, under private equity management, was declared insolvent under 140 million euros of debt in Italy, and an estimated 300 million euros worldwide.

The company, which in its heyday took 80 percent of its revenues from BMW, was eventually bought by Poland's Boryszew but cohabitation lasted just 2 years.

"It was clear from the start the Poles did not want to invest. Things drifted and in the end people were playing ping-pong, cards and basketball in the factory," Morini said.

Trezzano's four warehouses are today mostly bare, stripped of the plant that made Maflow tick. But they are slowly filling up with old computers and electrical appliances as well as the boxes and shelves needed to sort the recycled parts.

"The word is getting round. People have started dropping things off and we've already had enquiries from businesses interested in our work," said Massimo Lettieri, Ri-Maflow's legal pointperson.

There is a long way to go. The cooperative still needs to get through red tape to secure the permits to start business and there's also a problem of rent. The property is owned by Italian bank UniCredit and Lettieri said talks to reach an agreement have stalled.

But the members, many retrained under regional authority schemes, are confident the business has a future.

Under EU regulations member states must recoup at least 45 percent of electrical and electronic waste by end 2015. Brussels estimates over 95 percent of the companies involved in the recycling sector are small and medium companies.

"I spent a lot of time and money looking for a job but there's nothing out there. Let's study how to create something ourselves," Morini said. (Reporting by Stephen Jewkes; editing by Patrick Graham)