ROME Feb 4 Electrolux's biggest
plant in Italy could face closure unless a support plan is
agreed with the government, the head of the Swedish appliance
maker's Italian business said on Tuesday.
Under pressure from cheaper manufacturing locations in
Eastern Europe, Electrolux is planning steep benefit and wage
cuts for 5,000 out of the 6,200 workers it employs in Italy.
Unions have raised fears about the future of the group's
washing machine plant in Porcia, northeastern Italy, where
Electrolux employs 1,200 workers.
Ernesto Ferrario, chief executive of the Swedish
multinational's Italian business, said there are no firm plans
to close the plant but its future depends on what the government
puts forward at a meeting scheduled for Feb. 17.
"We do not want to leave Italy," Ferrario said. "We want to
see the exact proposal by the unions and the government and then
we can give a response."
Italian Prime Minister Enrico Letta last week pledged to do
everything possible to keep Electrolux in Italy, which is
struggling to emerge from its longest post-war recession and
where unemployment is at its highest level since the 1970s.
Investment by foreign companies, however, has long been held
back by excessive bureaucracy and high labour costs.
Electrolux has proposed a sweeping package intended to cut
net monthly wages by an average of 8-9 percent, rising to 15
percent over a three-year period. The company estimates the
initial reduction to be about 130 euros a month for the typical
Unions, however, say that the impact would be as high as 40
percent because of a reduction in the number of hours worked.
The state has been supporting Electrolux workers by paying
an extra two hours' pay when they work six-hour shifts in
"solidarity contracts", but this agreement expires in March.
(Writing by Naomi O'Leary; Editing by David Goodman)