General Motors and FCA, the cause.

General Motors and FCA, the cause.

Perhaps few will have noticed a small article in the Press where it is said that the FCA group will vigorously defend itself from the lawsuit brought by General Motors, but it is very difficult to find in the Italian newspapers some details on the nature of the case. And the reason is that this story completely distorts the narrative of Marchionne the innovator who goes away because of the unions.

I refer to this:

General Motors and FCA, the cause.
https://www.lastampa.it/economia/2019/11/21/news/fca-risponde-a-general-motors-la-causa-contro-di-noi-e-sconcertante-1.37928265

What is FCA accused of?

GM accuses FCA of having corrupted a metalworkers' union, or its American equivalent called UAW, to allow the GM group to have worse contract terms than the FCA group.

The concept is the UAW union had a kind of double standard: although the bargaining for UAW members should in theory be the same, according to GM "mysteriously" the conditions of GM's employees were much more burdensome than those UAW applied to FCA.

You can find many articles online about this:

https://time.com/5734380/gm-sues-fiat-chrysler-union-bribes/

https://eu.freep.com/story/money/cars/general-motors/2019/11/20/gm-sues-fca-rico-law-corrupted-labor-talks/4248317002/

https://www.reuters.com/article/us-gm-fiat-chrysler-lawsuit/gm-sues-fca-alleging-corruption-of-bargaining-process-with-union-idUSKBN1XU29V

I do not comment on the surreal claims that the lawsuit should stop the merger with the French: the mechanism by which a civil case in the US should stop a merger in France is not well understood. This is crap.

Instead the structure of the accusation is very interesting, because these are phenomena that were very frequent in Italy. The fact that the unions fill wads from companies to allow practices that are normally not allowed is a known fact, or rather it would be: I say "it would be" because it is not a crime in itself (no law forbids a union to receive money from a company) no one has ever investigated.

In general, corruption in the "private" world is an unexplored phenomenon, in the sense that the judiciary is very active when it comes to reporting a corrupt public official, or a politician who is corrupt, but if it is a "Procurement officer" or "human resources officer" who are corrupted by trade unions or competitors, the company itself must discover and report it.

To combat corruption in the private world, the same surveillance system that exists to fight corruption in the public sector does not exist. You live on some religion for which the private would be "efficient by nature". In reality things are not like this: those who work as a business consultant and have joined many companies know very well that they will find themselves dealing with this phenomenon. Suppliers who do not provide what they have promised, everyone knows, but "they are immovable", for example. Managers moving from customer to supplier, so to speak, are another symptom, if in previous years the company had become practically dependent on the supplier itself. And so on.

Human Resources are also among the most corrupt entities in large companies. It happens because in large companies the HR are called to have relations with the unions, which are one of the most corrupt, corrupting and corruptible entities in history. If you think politicians are corrupt, corrupt or corruptible it is only because you have never had anything to do with the gift system that links companies, HRs and unions.

Let's get to the point.

We hypothesize that GM's allegations are founded. I say it is a hypothesis, and I say that I accept it for a reason: it would be a very, very, very "Italian" system.

If you think about it, adding GM's accusations, FCA in the USA has found a very "Italian" situation:

  • The government has paid good money to facilitate the merger between FCA and Crysler.
  • The unions have "turned a blind eye" to questionable conditions applied to workers, according to GM for a corruption phenomenon.

Now, the problem with all this is not so much the fact itself. We know well that corruption within large companies is an unexplored and anarchic phenomenon. The problem is that this clashes against the "Narrativa Marchionne" that the Italian press has sold.

According to Marchionne Narrative, in fact, FCA would have left Italy because it was "too Italian", with corrupt unions that prevent business and the policy that ingests too much. And according to this narrative FCA has chosen the USA because they are the home of the very pure meritocratic capitalism, with the "enlightened" unions and the government that really takes care of the pure and brutal pure market.

According to what emerges, instead, the USA has been a VERY more "Italian" place than Italy itself. Not only has the "neutral liberal mercatista" government released a lot of money to finance a merger, but the "enlightened" unions emerge as very "Italian" unions.

If anything, Marchionne's problem was that the Italian unions did not accept his conditions, and evidently no "compromises" were possible, and the government itself had no money to give to FIAT to stay, as was the case in the past.

But this is exactly the OPPOSITE of Narrativa-Marchionne. If the GM allegations were confirmed, FIAT did not leave Italy because it is too "Italian", but because the US was MUCH more "Italian" than Italy. They allowed, that is, both the practice of public financing of the industries and that of the corruption of the unions in the negotiation on the collective labor contract.

Things Marchionne complained were "too strong" in Italy.

What emerges IF the allegations of GM were confirmed, FCA and FIAT are of that lineage that cries out in pain as they stab you in the back.

They shouted too much Italianity of Italy, they struck the union bargaining system coming out of Confindustria, saying that it was too little an "American" and too "Italian" system, and then the result is simply that it was really true the opposite.

I understand why the Italian press does NOT talk about the story: to contradict years and years of Narrativa-Marchionne, including sanctification, would be difficult again.

But in the end, time is a gentleman. And don't scream in pain as he stabs you in the back.

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