MILAN — The Italian government’s decision over the weekend to shut down all nonessential manufacturing activities until April 3 was deemed instrumental in fighting the coronavirus emergency in the country, but left a trail of uncertainties.
According to the decree, fashion and textile companies are among those obliged to close, but unions FILCTEM CGIL, FEMCA CISL and UILTEC UIL lamented that the definition of essential activities has “excessively expanded.”
“It is evident that the government has surrendered to the pressure of Confindustria, which cynically continues to put the logic of profit ahead of the safety of workers,” said the unions in a joint statement, accusing the Italian association of “not wasting any time in activating its role as a lobby to change the content of the decree.”
The unions have “urgently requested” a meeting with the Ministries of Industry, Economy and Finance to modify the list of criteria defining essential activities, and are threatening strikes. “If safety is not guaranteed, workers will strike,” said a source close to the unions, emphasizing the widespread uncertainty. “Many small and medium-sized companies on Monday morning did not know if they could stay open or not, because details of the decree were published late on Sunday and were not clear.”
Vincenzo Boccia, president of Confindustria, estimated the decree could determine a loss of 100 billion euros per month, virtually bringing it to a “war-time economy.”
While underscoring that the safety of workers remains the main priority, Carlo Capasa, president of the Italian Camera della Moda, said the association is obviously complying with the decree but cautioned against the closure of manufacturing companies after April 3.
“We can’t stop the machine, it’s too risky. The pipeline is very delicate, it’s like a spider web, if you break one corner, it will tumble down,” Capasa said on Monday. “Some small and medium-sized companies risk never reopening after a protracted closure. This is a system that is unique in the world, we must do all that is necessary to avoid losing jobs, which may happen if we miss six months of sales. We must do things carefully, with precision, not just across the board,” referring to how coronavirus has affected different regions.
Capasa said protective masks, the right distance between workers, shifts, more health tests and all that is necessary to keep the workers safe is a must everywhere, but noted that there are also very different situations depending on the regions. For example, he cited Bergamo and the Lombardy region, which have been most affected by the coronavirus, and how a more cautious approach should be taken in this case.
“Our pipeline works six months in advance, and what stops now can impact the following six to eight months,” continued Capasa. “I would have preferred more precise norms, but if that can’t be done, at least when companies reopen it should all be more decisive, without extending the closure of activities.”
As reported, the Camera della Moda has made a number of requests to the government to support the fashion industry and on Monday, in view of the decree, Capasa said “the most essential measures will be access to credit, state aids to avoid the closure of small and medium-sized companies and the postponement of tax payments.”
“First and foremost, we hope that these restrictions put in place by the government will be effective in fighting the epidemic and that the sector will pick up after this forced shutdown. However, it’s essential that institutions will provide adequate measures including a facilitated access to credit and the postponement of fiscal deadlines,” concurred Siro Badon, president of Assocalzaturifici, the country’s association that gathers footwear manufacturers.
“We need to be crystal clear and give confidence to the companies, which look at the situation as an irrecoverable crisis. The wealth generated by our associated enterprises is vital for the country in terms of economic assets and employment,” he added. To this end, Badon said the association is “lobbying [the institutions] so that at least the pipeline of companies producing safety shoes is exempt from the forced shutdown.” He noted the category accounted for 4.5 percent of the entire footwear sector’s production in 2018, generating 392 million euros in exports, directed mainly to European countries.
Matteo Lunelli, president of luxury goods association Altagamma, which regroups 107 brands, acknowledged this was “a health emergency but at the same time we must also think about the economic consequences.”
Echoing Capasa, Lunelli also focused on the importance of protecting the industry’s pipeline as a means to protect the Made in Italy production and distribution chain. “The year 2020 will be very difficult. The luxury goods sector is the first to be impacted as it is so highly exposed to China, tourism and retail, but it is expected to be the first to pick up. The Altagamma brands are solid companies, but let’s hope the government will understand the importance of the pipeline, working on long-term, structural measures — it is fundamental that it, too, will overcome this crisis.” He also praised the “understanding and cohesion between all the associations, working together, united,” also underscoring the importance of relying on possible European aids.
Italy has been in lockdown since March 9 and, as a precautionary measure, several companies had already closed earlier this month ahead of the decree. For example, Gucci, as reported, had closed its six manufacturing activities in Tuscany and the Marche regions. Luxottica Group closed its headquarters in Agordo last week and eight plants over the weekend.
“We’re sure the decree was needed. The earlier companies close, the sooner they will get back to business and relaunch; it’s a state of emergency,” said Marino Vago, president of Italian fashion industry association Sistema Moda Italia and chief executive officer of his family’s textile company Vago SpA.
“The [textile and fashion] sector has always been used to face every kind of difficulty and it’s able to bounce back as best as it can. If the shutdown is extended after April 3, I believe the supply chain might lose its grip,” Vago acknowledged.
“The only issue about the decree sits in the way these measures were taken, with the announcement made late at night [on March 21] and a formal decree being published only 24 hours later, thus creating organizational problems,” he added, noting that in tandem with Confindustria Moda, the association has pushed the government to allow businesses to continue operating until March 25 before shutting down completely.
According to the decree, fashion and textile companies are among the nonessential manufacturing businesses that are forced to close. Since last week, a number of them have been reconverting production to produce face masks and other personal protective equipment in order to meet the shortage of such devices in the country. The government has yet to clarify if those enterprises will be allowed to run their factories, Vago explained, noting the request has already been submitted to authorities. As reported, the project of reconversion was spearheaded by Confindustria Moda with the support of professional services company PwC Italia and Sportello Amianto Nazionale.
Italian tanneries are also hit by the new measure, as all firms have stopped their production activities. “The health emergency comes first and our associates have responsibly accepted this new measure and will follow it,” said Fulvia Bacchi, general director of Italian tanneries’ association Lineapelle-Unic.
“It’s a commitment toward our country, toward [the companies’] collaborators, their clients, everybody. We will have significant economic consequences, maybe many companies won’t even reopen. But we count on the ability to react, renovate and focus on research that the Italian tanning industry has always proved to have. Our companies are structured and able to withstand this terrible challenge and the association will give them all the support they need,” she said.