Delicate Balance of Power
In Italy, a Union Leader Must Weigh Worker Protections Against the Growing Demands of a Global Marketplace

By Peter S. Goodman
Washington Post Foreign Service
Tuesday, March 21, 2006

ROME

Last December, the overseers of Italian industry were at an impasse with labor unions over a new contract for nearly 2 million metalworkers. From auto parts plants to steel mills, Italy's factories were under assault from competitors in low-wage countries such as Poland, Turkey and China. Keen to limit costs, management was offering raises of about 3.6 percent.

Guglielmo Epifani scoffed. As secretary general of the Italian General Confederation of Labor, the largest and most militant trade union in the country, he had the power to shape the terms. The metalworkers contract was a benchmark for all of Italy and much of Europe. They were seeking a wage increase of nearly 8 percent. Epifani opted for war: He called the heads of the two next-largest trade unions and together they mobilized a one-day national strike.

About 90 percent of his membership took part, crippling factories throughout the country. In the streets of the capital, Epifani led 150,000 people in a raucous demonstration. In January, the employers reluctantly assented to a 6.3 percent pay raise -- more than double the rate of inflation.

The deal dismayed the European Central Bank, which had been urging "salary moderation." In corporate boardrooms, the contract was perceived as another sign of the old-world thinking that still grips the wealthier countries of Europe, Italy in particular, as they struggle to insulate workers from the inevitable forces of globalization.

Epifani shrugged. "Industrial labor needs to be paid for," he said in an interview. "People are not merchandise. We can't only pay attention to the interests of business and markets. We need to pay attention to the interests of the worker as well."

As capital slips eastward in search of lower costs, European trade union bosses such as Epifani occupy a crucial fault line. Proponents of unfettered capitalism blame him and the massive labor power he marshals for perpetuating economic malaise. Italy's economy suffered recession in much of 2004 and did not grow last year. Unemployment remains at about 8 percent. As Italian companies portray it, Epifani and his union stand in the way of their success, preventing them from adjusting to changing conditions by firing workers, altering hours and boosting production.

"In Italy, we have a cultural problem," said Luca Cordero di Montezemolo, the president of Ferrari SpA and the head of the Italian Employers' Association, which negotiates national contracts with trade unions. "We don't understand how quickly the world is changing. We work few and little. Without reforms, we cannot compete."

Epifani maintains that he and the unions are being cast as scapegoats for Italy's broader problems. Too many large companies are still owned by traditional families lacking management skills and an appetite for risk. The banking system is weak and the government is without vision, he said.

"We can't hide from reality," Epifani said. "Transformation is inevitable. The problem is, how are we going to govern it? People are losing their jobs. We don't want to abandon them. You need time. It needs to be gradual."

By bearing and background, Epifani, 55, seems an unlikely leader for Italy's most combative trade union, known as CGIL. A former university lecturer with a philosophy degree, he has never worked as a blue-collar laborer. He dons shiny silk neckties and a gold Longines watch. He likes the verse of Baudelaire, waxes lyrically about wine -- "more than drinking it, the terrain and culture that produces it" -- and he adores the experimental jazz of John Coltrane.

On a recent morning in his office overlooking the cypress trees of the 16th-century Villa Borghese, Epifani proudly displayed a book showcasing the union's collection of modern Spanish paintings. He openly discussed his agnosticism, never mind the Catholicism that dominates Italian society. And despite the extreme leftist credentials of his union, Epifani is its first secretary general who is not now nor has ever been a communist. He identifies himself as a socialist.

"This is a revolution in Italy," Tiziano Treu, a former Labor Department minister, said of Epifani's politics.

But Epifani's role is very much in keeping with Italian tradition, as he wields power that his union counterparts in the United States have not known for generations. As head of CGIL, he speaks for 5.6 million workers in a country with a population of about 58 million.

In large part, Italy's enduring labor power is the result of the continued currency of left-wing ideology in its politics; a vibrant Communist Party still is active, though its members are really proponents of democratic socialism. Union power also reflects Italy's vulnerable place in the world economy: About one-fourth of all Italian jobs are still in manufacturing, nearly double that of the United States. Many are in the industries most susceptible to low-wage competition, such as textiles and shoemaking.

Epifani, born in Rome in 1950 and raised mostly in Milan, where his father worked as an insurance company manager, was supposed to be a doctor. But at the University of Rome he lasted only three months in the study of medicine, preferring philosophy. The works of Darwin undercut his traditional Catholic faith. "I reached a point at which I was willing and able to question the existence of God," he said.

Upon graduation, he took a job as a lecturer in modern history, but he quickly grew disenchanted, feeling that he was isolated from the currents of his era. Fascists competed with leftists of every stripe -- Leninists, Maoists and Socialists -- for Italy's identity. Labor unions pressed for worker rights in what seemed the vanguard of a broader struggle for democracy.

In 1974, Epifani took a job in a publishing house attached to the CGIL. By the early 1980s, he had become secretary general for the polygraph and paper union, a CGIL affiliate that represents media workers. Hours were long, he said. He and his wife, a doctor, never started a family. "You lived and breathed the life of the union," he said. "The children never came."

The polygraph union offered a foretaste of today. Television was carving into print media. Typesetters were being replaced by computers. Printing was being shifted to cheaper presses in Hong Kong. "Many lost their jobs, and we had to retrain them for new jobs," he said.

In 1990, Epifani reached the central leadership of the CGIL. Four years later, he was elevated to the No. 2 position. When Sergio Cofferati bowed out as secretary general to enter politics in 2002, Epifani took over.

Cofferati, a pugnacious former factory worker, reveled in fiery oratory and backslapping. He was a hero of the more radical elements within the union. As a patrician intellectual, Epifani had a lot to prove, something that analysts say has made him more confrontational.

He has been a primary critic of the center-right government of Prime Minister Silvio Berlusconi, whose attacks on labor power have been largely unsuccessful. He has refused to negotiate on a revision to laws that make it prohibitively difficult for companies to fire people.

He has also held firm against another key goal of the employers' association -- the right to negotiate individual deals with unions at the local and company level. Under a system in place for more than a decade, the employers' association now negotiates national contracts with the unions that guarantees minimum wages for everyone. This allows the unions to leverage the size of their confederations and the threat of broad strikes to extract stronger deals for the weakest members.

Those who have sat across the table from CGIL negotiators operating under Epifani's leadership say he must take a combative line because of the hard-core leftist elements that still largely rule the organization.

"He is a prisoner of forces within his union, " said Massimo Calearo, president of the Federmeccanica, the employers' group that negotiated the deal for the metalworkers.

Epifani has proved a moderating force in some regards. He patched up a rift he inherited from Cofferati with the two other major unions, which dated back to CGIL's decision to strike alone over a previous metalworkers' contract. He talks of a need for cooperation with industry to bring about needed restructuring, particularly at the troubled national air carrier, Alitalia SpA, which critics say is bloated with unproductive workers.

Some analysts now envision a more peaceful period of labor relations in Italy. The employers' association is disenchanted with Berlusconi because of the sluggish economy. If Berlusconi loses next month's elections, yielding to a center-left government, some anticipate that Epifani will join with the other unions to discuss reforms to the contracting system, giving employers greater flexibility to set wage standards and hours.

"This will be the model," said Treu, the former labor minister. "It's a test to see whether the union actions are in favor of competitiveness. Epifani has been slowly promoting this strategy. He has always been a reformist."

Doubts persist, however, about how far he is willing to go -- an emblem of the larger questions about old Europe's ability to adapt to new times.

"Epifani is a obviously a very well-balanced person, a very moderate person," said Luigi Angeletti, secretary general of the Union of Italian Laborers, the country's third-largest trade union. "The problem is that the organization he represents is neither well mannered nor balanced."

Epifani himself rules out any talk of fresh concessions. "It would be wrong to reduce the importance of national contracts," he said, wearing with pride the label of militancy.

"It's a tough union," he said. "But someone has to look out for the workers."