The Luxottica supermarket trolley: Pasta, oil and coffee for employees
The first free trolleys of shopping for nearly 8,000 Luxottica employees will be collected from Trentino Coop supermarkets over the next few days. Pasta, oil, coffee, parmesan and other food products, all top brands (the union also demanded and managed to obtain Nutella), to a value of 110 euro. And that’s just the beginning. In autumn, the company will provide free school books to the families of employees and workers. And then study grants, child care, language courses and even specialist health care. A company voucher can be used to visit the dentist, the gynaecologist or the paediatrician. And Luxottica is also offering to “promote social advancement of children of employees”. This story, which might seem hard to believe at first, actually started two years ago. There was concern amongst employers about the loss of buying power for employees, and some decided to offer employees and workers a no-ties lump sum.
CORPORATE WELFARE - Leonardo Del Vecchio, the owner of Luxottica and thus closely connected to the well-being of Agordo and surrounding areas, also felt that something needed to be done to combat the ‘fourth week scarcity’ syndrome, and was also tempted by the idea of offering a lump sum. The heads of Human Resources and Industrial Relations, Nicola Pelà and Piergiorgio Angeli, convinced him that another less paternalistic, more modern path existed: to work together with the union to set up corporate welfare, and set it specific goals related to improving quality in the factory. Hence the experiment that is beginning over the next few days, and which is sure to become the topic of much debate, as well as starting a whole new process. Pelà, a manager of the Olivettian school, sees it as a continuation of Hadrian’s socio-communitarian culture, Cgil union leaders such as Giuseppe Colferai speak of its similarities to mutual help societies at the end of the 1800s, and the secretary of the Uil, Paolo Dalan, sees it as a forerunner of co-management. Models aside, in the Belluno world of eyewear, a common language is now spoken between company and unions, and we are light years ahead of the national situation. Even if we haven’t reached a point of that “complicity” which minister Maurizio Sacconi would hope for, and which sends shivers down the spines of Cgil unionists in Rome, a climate of profound collaboration has been created, and the last strike dates back to 2006. In the eyes of Veneto unionists – whatever their union loyalty – Del Vecchio has one big advantage: he has relocated as little as possible (just two factories in China) and has recently decided to build a single logistical centre for the group in Serico, in the area of Belluno. Not in America, as he might have.
THE PROJECT – But how does the Luxottica welfare programme work? The aim is to integrate salaries with a series of non-monetary benefits. If the group put 100 euro extra in the pay packet, employees would receive only 50, thanks to the curse of the tax threshold. If, on the other hand, they give them a supermarket trolley with 110 euro of shopping, factory workers save exactly that sum, but it costs much less to the company, because using its contractual weight, it can obtain huge discounts from suppliers. What’s more, since the shopping comes from the Trentino Coop and not from Auchan or Carrefour, it helps support the local economy. Some may object, but isn’t this new welfare based on the all-Italian tradition of tax avoidance? No, answers Luxottica, pointing to article 51 on income tax declaration, which allows for exemption from tax on goods and services of up to 258 euro. “It’s all completely legitimate”, explains Pelà. “Our benefits simply become the third leg of remuneration, complementing the other two legs of salary and traditional cash incentives such as overtime.” And the benefits in the area of education and health “are not alternatives to public welfare; we are simply transferring buying power to those areas where the State fails to offer an adequate service.” It is precisely the added value of the benefits that has calmed the unions, particularly Cgil, who initially feared the undermining of contracts. And Cisl is also keen on it, having discussed it in their national congress, as Rudi Roffarè, the local leader confirmed. In reality, Luxottica management have no intention of bringing down the union. Quite the contrary. They consider it as much a stakeholder as the American fund manager Harris Associates which holds 2% of the group’s shares, or the Agordino community which hosts their premises.
«A LOCAL MULTINATIONAL» - “It might sound like an oxymoron, but we see ourselves as a local multinational”, emphasises Angeli, head of Industrial Relations. The figures back him up: Del Vecchio makes 65% of his turnover in the United States, but 65% of production takes place in Italy. This year, due to the recession and the fall in American sales, they’ve had to offer four days of redundancy payments, but none has blamed them. The downturn affects everybody. In the areas around Belluno, considered the Turin of the North East thanks to the high proportion of large companies compared to small, unemployment has risen to 6% for the first time, and Del Vecchio’s main competitor, Safilo, has given up and is desperately looking for a buyer. In the Luxottica factories, the average pay is 1,200 euro/month net, union adherence is not particularly high (about 20% at the most), Cgil is the strongest union, but amongst workers, especially the older generation, there’s a very strong sense of belonging. For everyone, Del Vecchio is “il nonno” (grandfather), and when people go home in the coach in the evening, they are often still wearing their Luxottica shirt. In the group’s 2009 budget, the welfare programme will account for 2.7 million, which will be itemised as staff costs, but, warns Angeli, “this is something we have allowed reluctantly, and it is precisely in order to avoid any old-style paternalistic stance that this is all part of an exchange.” Producers of eyewear in Italy or elsewhere desperately need quality, because in this very particular industry, in which the Italians are world leaders, automation cannot account for more than 15% of the production cycle. Thus, there is a need for manual production of a type that is highly flexible in order to adapt to the wide variety of models in production, with skills that are practically those of an artisan. The welfare protocol, which bears the signatures of Cgil, Cisl and Uil reads that “the economic resources for financing services, whilst hopefully constant over time, will also be related to performance indicators in the company”, which will be mutually agreed, since the whole programme answers to a governance committee which is a rigidly joint commission between company and unions. According to the Luxottica management, the 2.7 million that are invested will be repaid through reducing the margin in the budget for rejects, and improvement in the quality of eyewear that is produced in Agordo and the other factories. If everything goes according to plan, the exchange will start a virtuous cycle, the welfare programme will be repaid, the union will have found a new area of legitimization, and best of all, comparison with productivity from the two “sister” factories in China will be less unbalanced.
(Source: Il Corriere)
