* Deal with unions, government saves jobs
* Plant protected from closure
* Four year investment plan
By Francesca Piscioneri
ROME, May 15 Italian government signed an
agreement with Electrolux on Thursday to preserve the Swedish
white goods multinational's four sites in northern Italy and
protect the 6,000-strong local workforce, in exchange for tax
breaks and union concessions.
Under pressure from cheaper manufacturing locations in
eastern Europe, Electrolux had planned steep benefit
and wage cuts for workers it employs in Italy and was set to
close a washing machine plant in the town of Porcia.
However, after reaching a deal with unions and the
government which will see changes in operational practices and
tax breaks for reduced working hours deals to protect jobs, the
company agreed to revise its plans.
"This is a very significant and important agreement, which
creates a new and more modern approach to industrial relations,"
Industry Minister Federica Guidi told reporters after the formal
signing of the accord.
Electrolux agreed a four-year investment plan of 150 million
euros ($206 million) that will save the sites in Porcia, Forli,
Solaro and Susegana and maintain salary levels without
compulsory layoffs, although 800 jobs will go through voluntary
redundancies and early retirement.
Electrolux will in exchange be given tax breaks, amounting
to 15 million euros a year, which the government extends to
employers offering so-called "solidarity contracts". Such
contracts allow employers to put workers on reduced hours to
protect jobs. The local government of the northern Friuli region
is also offering cuts in the Irap business tax.
The struggle over Electrolux has highlighted the weakness
of the electrical appliances sector in Italy, once a major
producer of white goods, which has seen its output cut in half
since 2006 under mounting pressure from lower cost locations.
CGIL, Italy's largest union, welcomed the agreement which it
said showed the need for similar deals elsewhere.
"It is more necessary than ever to identify incentives
through accords with unions that bind companies to measures that
protect jobs and production," the union said in a statement.
The deal with Electrolux gave Prime Minister Matteo Renzi
some encouragement less than two weeks before European
parliamentary elections, even if it came on the same day as
data showing Italy's economic output fell unexpectedly in the
Renzi has promised a broad range of structural reforms to
revive Italy's stagnant economy but with unemployment at record
levels of around 13 percent, he could ill-afford the loss of
another high-profile manufacturing employer.
As well as burdensome and complicated bureaucracy, companies
have long complained of excessive costs in Italy, which has some
of the highest corporate taxes in the world.
Renzi is planning a major overhaul of employment law in the
coming months and on Thursday parliament approved measures aimed
at making it easier for companies to use temporary workers.
($1 = 0.7291 Euros)
(Writing by James Mackenzie; editing by Keiron Henderson)