November 16, 2023
Shutting down a factory is a long process that takes months, often years, of planning. When GKN Automotive, a multinational automotive components company, publicly announced that it would close its historic Chester Road plant in Birmingham, England, it was the end of January 2021. The workers, more than 500, would not be laid off for another year in 2022. «The proposal envisages that GKN Automotive will carefully wind down the site over 18 months to ensure an orderly and stable transition of operations and give those affected time to find new work», the company wrote in a statement. «Supporting our people is our first priority as we consult on this proposal», the executives wrote. The workers attempted to oppose the closure going on strike.
What happened in Birmingham is part of the “break-up and sale” strategy of the British hedge fund Melrose Industries Plc, which bought GKN in 2018 with the intention of reducing costs and dismembering the group by selling individual factories and distributing dividends to its shareholders. This strategy also affected the factory in Campi Bisenzio in the province of Florence, Italy. The sale of the Tuscanian plant was effectively concluded in December 2021. Compared to the Birmingham case, however, there is a crucial difference: all of the workers, more than 400, were dismissed unexpectedly through a certified e-mail message in the summer of 2021. «The decision is painful. We realised that in the market scenario that is emerging, it is not possible to make the company sustainable», explained the factory’s CEO, Andrea Ghezzi, a few months later. The decision, Ghezzi claimed, had been made in July, when medium-term market projections indicated further losses. «The closure», the CEO concluded, «was a consequent and inevitable decision».
This company rhetoric was always opposed by the workers. On 9 July 2021, the day of the closure, union representative Dario Salvetti explained to local media that «the company prepared everything down to the last detail, faking it until the last second and waiting for the most propitious moment to do what it did». Because a factory does not shut down overnight.
The investigation in a nutshell
- In 2018, the hedge fund Melrose bought the automotive multinational company GKN with the intention of cutting costs and dismembering the group by selling off individual factories. This strategy, called “break-up and sale”, also affected the factory in Campi Bisenzio located in the province of Florence
- The workers of GKN in Campi Bisenzio were dismissed in July 2021, without warning, through a certified e-mail message – a modality not seen for other dismissals in the group. Before the end of the year, the factory was sold
- Internal documents – part of a leak that IrpiMedia obtained – show that the process for deciding on the closure was neither sudden nor impromptu, contrary to the company’s claims. There were two plans codenamed «Forest» and «Skye» that were never shared with the workers
- The first, Forest, aimed to reduce the number of workers in several GKN plants. The second, Skye, planned to dismantle the Florence plant altogether. While the managers were considering leaving Campi Bisenzio, they continued to promise the workers their commitment to develop the factory in Florence and denied the possibility of collective layoffs
- GKN, in September 2021, was forced to stop the collective dismissals it had planned, because the Court of Florence deemed its behaviour «anti-union». The company had instead told the judge that it «had not concealed anything» from the workers’ representatives
Internal documents, obtained by IrpiMedia, prove – for the first time – that Melrose was considering the closure of Campi Bisenzio as early as February 2020, a year and a half before the official announcement. However, the company only informed the employees of its decision on the same day after keeping the unions in the dark. There is no explicit explanation of the reasons for this choice, but the documents show that, even before Melrose bought GKN, the management had prejudices against the unions: it feared their actions, and held them responsible for production problems.
In an old document of notes, undated, there is an annotated chronicle of trade union relations in the Florence plant, prepared for international managers. In the documents, opinions emerged on the leadership of the «red» FIOM, the Federazione Impiegati Operai Metallurgici: a union to which almost all the workers of the Tuscanian plant belong. It was considered «strongly ideological», with a position that «sometimes» was «totally crazy». In reality, demands from GKN Florence workers were all permitted, and reasonable, within labour regulations.
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Although presented as sudden and inevitable, the closure of GKN in Campi Bisenzio was the result of an unscrupulous strategy and a total lack of transparency by the management. The documents found in the leak, which IrpiMedia shared with the magazine Panorama, contain references to two secret projects codenamed «Forest» and «Skye». The first, Forest, is mentioned in some personnel management documents and was aimed at reducing the number of workers in several GKN plants around the world. The second, Skye, is marked as a «strictly confidential» project in the clauses of non-disclosure agreements signed by top management at the beginning of 2020. It goes as far as forecasting the complete closure of the Campi Bisenzio plant. This is clear from working drafts, internal memoranda and PowerPoint presentations, containing graphs, tables and timelines, which IrpiMedia found in the leak.
While the executives were considering leaving Campi Bisenzio, they continued to express to the workers «their willingness to work to promote the development of the site and the maintenance of employment at the plant», according to the union agreement of 9 July 2020. The non-disclosure agreements, by which the GKN directors bound everyone who learned about the Skye project to silence, hindered the process of verification of information by IrpiMedia journalists.
GKN’s cuts in Europe
Planned layoffs at GKN’s European plants in October 2020
According to the documents analysed by IrpiMedia, the Skye project, and the consequent assessment of whether to close Campi Bisenzio, had been discussed by the company since at least February 2020. Shortly afterwards came the Covid-19 pandemic, which had an impact on the entire automotive sector, already in crisis for some time. All of the group’s 50 factories had already seen their productivity drop, and in Florence the plant had been forced to close due to lockdown. The losses in Campi Bisenzio were no worse than the other plants. Additionally, between the first and second waves of Covid, the human resources bulletin of the Florence plant counted 445 workers, of which only 42 were considered by the company to be surplus to budget. An unexpected growth in demand after the first lockdown had even forced the management to temporarily hire new workers with an interim contract.
These circumstances did not change the strategy of Melrose, a hedge fund not interested in industrial productivity but in maximising profits for its shareholders. Evidence of the complete closure of Campi Bisenzio can be found in a PowerPoint presentation dated October 2020, referred to as «draft – for discussion». The «reduction» table summarises all the planned workforce cuts at GKN: it lists the Skye project, indicating «-482» employees in total in Florence and «-7» at the Arnage plant in France; the Bluebird project, planning the closure of Birmingham; the Rubikon project, with cuts in Rösrath (Germany), Ribemont (France) and Minworth (Great Britain). Total: 1,115 employees to be laid off.
Returning to the Skye project and its application in Florence: the total dismantling of the factory, as foreseen in the plan, took place punctually in mid-2021. The existence of the secret plan therefore contradicts the position held by the company towards the unions, to whom it has always promised to have the future of the factory at heart. It also contradicts the reconstruction of the case that GKN argued in court, in response to the litigation initiated by the unions in 2021 against Melrose to stop the redundancies. The company’s management repeatedly asserted that it «has never concealed anything» from the workers. Except, that is, a secret plan to sack them all.
The context: union tensions
Despite the lack of transparency by the company, the GKN workers had guessed that the factory in Campi Bisenzio might close even before the pandemic. They had realised that the decisions taken by management were not towards a relaunch of the factory. Thus, in 2019, they had opened a dispute over the early retirement of sixteen employees: the union representatives wanted an answer from the company regarding the future of Campi Bisenzio, an answer that never arrived. These were the first signs of what would happen in 2020 and 2021.
In a series of internal presentations, GKN assumed very serious behaviour, such as classifying the unions in its European factories on the basis of representativeness and degree of cooperation, identifying as «optimal positioning» that of a union that is very representative but also conciliatory with the management. If this was present in the factory in Eskişehir, Turkey, and partially in Vigo, Spain, in Florence it was the opposite: there was a trade union, FIOM, which gathered the majority of the workers and was classified as «opponent» with respect to the managers’ decisions. In the presentation about Florence, the number of strikes is indicated – a unique case among the PowerPoints of all European plants –: 41 strikes in three years, all organised by FIOM. Among the documents found by IrpiMedia in the leak there is also a list containing the names of all the workers, divided by membership of each trade union organisation.
In this context, prior communication of a gradual closure of the plant could have triggered workers’ resistance. With project Skye, the whole process, from the reassessment of the fate of the Campi Bisenzio factory to the decision to close it, remained secret until the last day. While the owners reassured the workers that they were committed to the development of the plant.
2019, the illusion of relaunch
Until the end of 2019, however, Melrose seemed to maintain interest in the relaunch of Campi Bisenzio. This was confirmed to IrpiMedia by a source familiar with the matter, who cannot be identified. The idea was to cut costs through some early retirements, proving that the plant could restart competitively. The local management presented a budget, and tried to mend fences with the union representatives. It was at the European level, however, that decisions were made. Everything changed, in fact, when Melrose initiated a turnover of top management, both national and international, with the aim of managing a global restructuring of the group. Restarting GKN Florence was no longer the priority and perhaps – consistent with the strategy of a hedge fund such as Melrose – it never was. At the turn of 2019 and 2020, the future of Campi Bisenzio was moving more and more towards closure. The contours of the Skye project were outlined, undisclosed to the rest of the workers. Those who were involved in these early stages of the plan, confirmed that it was a project to decide what to do with the Florence plant. Processes of this kind are long, the source confirmed to IrpiMedia, and usually involve a preliminary analysis before deciding the fate of the factory.
The secret plan to assess the future of GKN in Campi Bisenzio materialised within weeks of the outbreak of the pandemic. In February 2020, human resources management expert Alex Aceti was hired in Florence. On 14 February, Aceti received a letter in English, marked «Strictly Confidential». From the headquarters in the UK, the head of human resources wrote to Aceti, confirming their interest in hiring him. The letter already stated that for an initial period Aceti would work in Florence, but then he would no longer be needed and would have to take up another position in Europe. «Initially the role will be heavily focused on Florence but our commitment, based on a supposed good performance, is to assign you to another role in the European region during Q1 2021 [i.e. in the first quarter of 2021]». This is because, after that date, the existence of the Florence plant was already in doubt.
On the same day that Aceti’s employment was confirmed, a meeting took place between the company and the representatives of the Florentine factory workers. Representatives of the enterprises federation Confindustria and LabLaw, a law firm specialising in labour law, were present. The subject of the meeting was the future of the factory, and facing unions’ concerns, Marco Gelardi, the plant’s managing director, confirmed his commitment to the «development of the plant and to trying to protect employment». The unions, the report says, came out of the meeting satisfied. Concluding the confidential summary of the meeting, LabLaw’s consultants – who proved to be fully aware of the Skye project, unlike the workers – reassured the management that none of the points discussed committed the company: «No binding undertakings have been taken that could be considered in conflict or non consistent with ultimate aims of PJ [Project] Skye». At least since February 2020, therefore, GKN knew that it would at least consider a closure of Campi Bisenzio, laying off all the workers.
A few months after project Skye first appeared in internal documents, the newly hired HR manager, Alex Aceti, was also officially included in the secret plan. On 14 May 2020, GKN Automotive has Aceti sign a confidentiality agreement. «GKN Automotive proposes to involve you in a confidential project known as Project Skye. The existence of Project Skye is generally not known to other employees and must be kept strictly confidential», it said. The project came directly from GKN’s European top management, which was explicitly mentioned in the text of the agreement.
2020, a new layoff plan
In the meantime, between the first and second wave of the pandemic, the GKN group planned a global restructuring. The plan was called «Project Forest». Cutbacks were forecasted in both American and European plants. In Campi Bisenzio, a reduction of 50 workers was planned, 18 of them close to retirement, to be offered an early exit path, for a total of 307 workers to be laid off in five European plants. These are substantial numbers, but far from the dismissal of entire factories. It was the summer of 2020, one year before the “sudden” closure of the factory in Campi Bisenzio, and the company made no mention of plans for massive restructuring or closure. On the contrary, it continued to reassure the workers’ representatives. In an agreement with the trade unions in Florence, signed on 9 July 2020, it stated: «The company has in any case confirmed that it continues to be open to dialogue and discussion on the progress of the plant, reaffirming, once again, its willingness to work to favour the development of the site and the maintenance of employment»
Under the radar, however, the company seemed to be preparing to dismiss the factory. It did so by thinking about how to construct a reassuring public narrative. It had a confidential plan prepared to condition the inevitable interest of journalists in the matter of the future of Campi Bisenzio. In the document, contained in the leak, the Milanese agency Barabino & Partners, specialised in corporate communications, was indicated as the coordinator for GKN’s public communications. The most risky scenario was that images were leaked, showing how prototypes for components of GKN Florence’s largest customer, FCA (now Stellantis), were being tested in other European plants. This would be very concrete evidence that the company was preparing to close Campi Bisenzio and relocate production. In this case, it is written in the plan, «GKN and FCA should be well aligned (at top level)». The message to convey was that prototype testing did not herald closures, but was part of the strategy to remain competitive in a difficult market. The directives stipulated to answer, when asked, that «the company does not currently plan to leave Campi Bisenzio».
The Forest project, however, the one that envisaged “only” about fifty redundancies in Florence, suffered a setback. On 8 August 2020, the Conte II government passed Decree 104, to help relaunch the economy, which had been weakened by the first wave of the pandemic. It provided, among other things, that a company that had not exhausted all the weeks of extraordinary social shock absorbers could not initiate either a collective redundancy procedure or individual redundancies. However, the prohibition did not apply in the event of company closure. GKN, which between August and September would not need to apply for the social shock absorbers because production had restarted, would not be able to use up all the required social shock absorbers weeks by October 2020, when it planned to start laying off the 50 workers.
«Need to evaluate the Skye 2021 strategic approach», wrote the company in a presentation devoted to the effects of the August decree. It was clear that the Forest project was only a starting point, a “cutback” that served to pave the way for the closure of the plant, which already seemed to be the ultimate goal of the Skye project. In September 2020, Forest was cancelled: on the one hand, the ban on redundancies would not expire until the beginning of 2021; on the other hand, there had been a sharp rebound in production, which «forced the plant to use all available production hours». Paradoxically, however, the preparations behind the scenes were all converging towards the workers being laid off. One presentation spoke explicitly of «shut down operations in FIR [acronym used to indicate the Florence plant] + starting the closure phase».
The roadmap was defined in a document prepared by the law firm LabLaw. It envisaged starting a phase of testing prototypes for FCA parts in nine other plants, then accumulating stocks of components and arriving at the announcement of the closure of Campi Bisenzio in the first three months of 2021, thus starting the «implementation» phase of the «dismissals». In October 2020, a further «secrecy agreement» for the Skye project was concluded with Marco Gelardi, CEO of GKN Firenze. The dismissal plan entered its implementation phase. In July 2021, the collective dismissals were announced.
GKN Florence, the timeline
2021, GKN «has never concealed anything» from the workers. Except the secret plan Skye
The existence of a secret plan that contemplated the complete closure of the Campi Bisenzio factory and the dismissal of all its workers, even before the lockdown imposed by the Covid-19, contradicted the public narrative that GKN had always carried on about the affair: that of a sudden and improvised decision. Not only that, the confidential documents about the Skye project also contradicted the position taken by the company before the courts. In fact, taken to court by the FIOM for violation of Article 28 of the Workers’ Statute – which punishes anti-union conduct – GKN repeatedly reiterated that it had always been transparent with its workers. At the hearing on 9 September 2021, the company presented a defence statement, written by lawyers from the firm LabLaw.
In the memorandum, obtained by IrpiMedia, the company stated that it «has never concealed anything from the union, to which it has indeed always represented and reported any information concerning the conduct of production activities». The Skye project, however, has always remained confidential. In February 2020, the company’s lawyers wrote, GKN had informed the unions that it was «in a situation of structural criticality currently being reviewed by management», but reaffirmed its «willingness to work to promote the development of the site and the maintenance of employment in the plant». By February 2020, Skye was already known to the management of the Florence plant and to LabLaw’s consultants, and shortly afterwards it would be communicated to the new human resources manager, Alex Aceti, who was hired at that time.
In the defence statement, the agreement of 14 February 2020 was explicitly mentioned as proof of the company’s conviction that it wanted to defend the Campi Bisenzio plant. However, while the company maintained this reassuring facade with the unions, the confidential notes relating to that meeting already mentioned the Skye project. «The company», GKN declared to the Judge of Labour of Florence, «at the time of the signing, had no second thoughts about a possible closure, simply because this was a possibility that had never been considered at that moment in time (and for the whole of the following year)».
According to GKN, there was only one version: as soon as the management realised that it was impossible to continue operating in such a crisis situation, it communicated this to the workers and closed down. «And thus the Company shared with the union all information and data in its possession during both 2020 and 2021, keeping the union in the dark about nothing with reference to a change of scenario and market conditions,” GKN’s defence brief concluded. Again, no mention was made to the court about the Skye project. Neither GKN nor any of the other companies or persons mentioned in this article responded to IrpiMedia’s request for comment.
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Gianluca Paolucci (Panorama)
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Laid-off GKN workers march the streets of Rome (Italy) during the G20 in October 2021