Dipartimento di Economia Marco BiagiCAPP Centro di Analisi delle Politiche Pubbliche

From wage bargaining to the negotiation on “cognitive surplus value”:

reflections on a laboratory for Industry 4.0 in Lamborghini

Armanda Cetrulo, Pasquale Pavone and Margherita Russo

The search for security under disruptive technologies and deconstructed labour markets40th International Working Party on Labour Market Segmentation

September 9th & 10th 2019, Düsseldorf

Context

▪ Changes in industrial relations 1968-2018, in Italy– what conditions (social, economic, organisational) have

favoured the emergence of divergent paths– case study: Lamborghini (Russo et al., Economia & Lavoro 2019)*– historical perspective | local context | empirical research

▪ From the negotiation of wages to the negotiation of cognitive surplus: reflections on a laboratory for Industry 4.0

– What role does the trade unions play in thedefinition and implementation of Industry 4.0technologies?

*Margherita Russo, Pasquale Pavone, Armanda Cetrulo, Conflict and Participation in Bargaining at Company Level: The Lamborghini Case, Economia & Lavoro, 1/2019, pp. 57-74doi: 10.7384/93830, available in open access

2

Outline

3

Introduction– Lamborghini: transformations over 50 years

Themes of firm level bargaining: a periodisationRusso et al., Economia & Lavoro 2019

Industry 4.0– The research question– Data and Methods– Topics– Results

Concluding Remarks

1963_350 GT

4

From Ferruccio Lamborghini to Audi VWproduced models [20] and prototypes [15]: 1963-2017

LAMBORGHINI CENTENARIO ONE OFF 2015

From Ferruccio Lamborghini to Audi VWproduced models [20] and prototypes [15]: 1963-2017

5

From Ferruccio Lamborghini to Audi VWownership, production, employees, unionisation

6

several changes:– ownership– productions

• 350 GT: 120 units• Gallardo: more than 14000 cars

– employment• a few dozen workers in the early 1960s,• 310 workers, in 1998 (169 blue collar, 136 white collar e 5 managers)• almost 1500 workers in 2017 (744 blue collar, 749 white collar)

– unionization rate:• high, despite a little drop from 1992 to 2001,

during period of uncertaintyalways around 50% of the total workforce

From Ferruccio Lamborghini to Audi VW

7

receivershipbankruptcy

Da Ferruccio Lamborghini ad Audi VW

7

14,000

120

From Ferruccio Lamborghini to Audi VWEmployment and trade unions membership

(source FIOM Bologna)* The figure of the total number of employees includes the number of middle managers, which goes from3-5% of the total in the 1990s, to just under 1% in recent years. The number of middle managers enrolledin the union is not recorded. Source: FIOM Bologna, Workforce 1990-2017.

Topics at the center of bargaining: an analysis over time

1968-1972productionincentives andcareer advancements

1973-1991the encounter between school and world of work, productive reconversion

1988,1993-2007remuneration

last decade▪ Work suspension and

redundancy, training andeducation, participation2002, 2009-2010

▪ Temporary work, performanceincentives and positive flexibility 2008, 2011-2012,2015

▪ bilateral technical commissions 2013-2014,2016

10

Industry 4.0 in the plant

In 2017 simultaneous introduction of:• product innovation: first SSUV-Super Sport Utility Vehicle• process innovation: industry 4.0/smart factories technologies

Source: lamborghini.com 11

Industry 4.0 in the plant

In 2017 simultaneous introduction of:• product innovation: first SSUV-Super Sport Utility Vehicle• process innovation: industry 4.0/smart factories technologies

Source: lamborghini.com 12

1986 - LM 002

The first SUV ever

2018 –URUS

The first Super Sport Ut ility Vehicle

Industry 4.0 in the plant - The research question

In 2017 simultaneous introduction of:• product innovation: first SSUV-Super Sport Utility Vehicle• process innovation: industry 4.0/smart factories technologies

What role does the trade unions playin the definition and implementation

of industry 4.0 technologies?

Focus on bargaining with regard to three main topics:- work organization- technologies- education and training

13

Industry 4.0 in the plant - Data and methods

14

• Interviews with:Digital business planner and trade unions representativesFIOM expert of work organizationFIOM Bologna secretary

• bargaining agreements from 1968 to 2016expert and automatic text analysis

• more recent documents (2017-2019)

• visit at the URUS plant in Lamborghini

selectionof topics

Industry 4.0 in the plant - Topics over time

TechnologyWork organisation

TechnologyWork organisation

Education& Training

15

Education & Training

1968-1972productionincentives andcareer advancements

1973-1991the encounter between school and world of work, productive reconversion

1988,1993-2007remuneration

last decadeWork suspension andredundancy, training andeducation, participationTemporary work,performance incentivesand positive flexibility bilateral technical commissions

Industry 4.0 in the plant – Topics and keywords

16

Work organisation

cadenza

Technology

impianti

Education & Training

conoscenzaturni turnista orarioorario_di_lavoro organizzazione_di_lavoro

macchinario macchina macchina_utensile innovazione investimento

formazione formativo conto_formazionesviluppo_di_competenza professionalità

carichi metodologia tempi rotazionemodelli_organizzativo team

tecnologico tecnologia informatica

formazione_professionale passaggio_di_categoria competenzacognitivo crescita_professionale polifunzionale

ergonomia gruppo_di_lavoro metodo cronometrico metricaprocessi_evolutivo_di_organizzazione

inquadramento

turnazione rotazione tempistico

Industry 4.0 in the plant - Co-occurence graphs, by topic and period

17

The graphs enable us to look at:• the lexical vocabulary related to the selected word;• the emergence of new words over time for each topic;• the creation of new or different links among topics of interest;• the relative importance and frequency of specific words.

The semantic network analysis has been flanked by

a critical reading of all the documents

used for the automatic text analysis.

Industry 4.0 in the plant - Graph_Technology

1973-1992Discussion on technology (centered on machine tools) is the focus in the negotiation on wage and organisation of work (shifts).Investments and innovation aredetermined only by the firm, but trade unions start to advance proposals on organisation models, production time and workers skills.

18

2008-2015Decisions on new technologies are taken within a framework of collective agreements.Investments do not relate to innovation only, but also to an increasing offer of programs of training for workers in order to encourage the development of new competences and paths of professional enhancement.

19

Industry 4.0 in the plant - Graph_Technology

Industry 4.0 in the plant - Graph_Work Organisation

1973-1992Work organisationhas always been ahighly discussed topicin Lamborghini, as underlined by the significant amout of words onteam work,rotation mechanisms,rate of production, working time and setting of the shifts.

20

Industry 4.0 in the plant - Graph_Work Organisation

2008-2015The topic of work organisation becomes pervasive in the bargaining process.It crosses different and new issues,such as the performance bonus,the methodologyused for computingtime and rate of production, the ergonomics of workstations.

21

Industry 4.0 in the plant - Graph_Education & Training

1988-2007Rich vocabulary:workers training is related to the acquisition of new competences,a high specializationdegree and relatedeconomic compensation.At the same time, workers’ polyvalence and polyfunctionality should be pursued through the adoption of rotation mechanisms and horizontal team groups.

22

Industry 4.0 in the plant - Graph_Education & Training

2013-2016The lexical contextrelated to education and training widenes dramatically (wellbeyondLamborghini).An economicpremium is provided for workers“cognitive surplus-value” and animportant programof dual education(DESI) is started.The role of thebilateral technical commissions also emerges clearly.

23

Industry 4.0 in the plant - 4.0 Technologies (9 pillars)

Source: https://www.intechopen.com/books/digital-transformation-in-smart-manufacturing/fourth-industrial-revolution-current-practices-challenges-and-opportunities

24

Industry 4.0 in the plant - 4.0 Technologies (9 pillars)

25

Manufacturing Industry 4.0 technology as a support for workers

Advanced Robotics — Presence of collaborative robots Internet of Thing — Yes Horizontal Vertical Integration — Yes Simulation — Digital twin Cybersecurity — Yes◉ Big Data — No◉ Augmented Reality — Not, under discussion/doubts on its use◉ Cloud — Not, future implementation for finance departments

(not for production data)◉ Additive Manufacturing — Not yet developed

Industry 4.0 in the plant - URUS

26

• Doubled production: 26 SSUV produced daily (before only 15daily supercars)

• Takt time faster with respect to the other two supercars

• SAP - MES (Production and Maintenance)

• User friendly Dashboards linked to the Manufacturing ExecutionSystem are present the URUS assembly line (further developments)

• AGV (Automatic Guided Vehicles)

• Collaborative Robots

• Despite the presence of sensors and wireless screwdrivers, dataarecollected only partially (i.e. product defects, quality, security)

Industry 4.0 in the plant - Digital technologies and trade unions

27

Every new technology introduced in the factory is object of a preliminary consultation and agreement with the trade unions,in order to define its implementation.

Every six months, the Digital Business Team organises a meetingwith the Unitary Workplace Union Structure (RSU)in order to discuss new projects of digitalisation, with a focus on possible impacts on the workforce.

Geolocalisation of cars:

GPS will be used to track cars parked inside the plant, since their number is increasing and it is difficult to find them.No data will be taken on the speed of drivers and, more generally, on the behaviour of drivers outside the plant (noGPS signal outside).

Industry 4.0 in the plant - Digital technologies and trade unions

28

Every new technology introduced in the factory is object of a preliminary consultation and agreement with the trade unions,in order to define its implementation.

Every six months, the Digital Business Team organises a meetingwith the Unitary Workplace Union Structure (RSU)in order to discuss new projects of digitalisation, with a focus on possible impacts on the workforce.

Concluding remarks (Preliminary 1)

29

Lamborghini trade unions have been able to participate to the process of innovation over time, with relevant improvements after the acquisition by AUDI-VW.

The competence and awareness of trade unionists seem to reduce and avoid, at the moment, the diffusion of digital controlmechanisms over workers.

Progressive introduction of new topics in the firm-level bargaining: flexible working hours for white collars, cognitive surplus, undergoing discussion on the ownership of data.

Increasing coordination with workers at plant level(1100 workers over a total of almost 3000 are employed by othercompanies in canteen, logistics and security activities)

Concluding remarks (Preliminary 2)

30

◉Difficult to develop horizontal team groups and create a non authoritarian role of team leader

◉Tendency to increase the quota of temporary workers(even though, on the other hand, there is an increasinginvestment in permanent workers’ skills and competences)

◉Design and R&D departments still closed to trade unionists(choice in design separeted from choice in adoption)

Concluding remarks (Further developments)

31

▪ The adoption of Industry 4.0 technologies within organisationsis not determined a priori, but it depends on economic, social andsectoral factors.

▪ Different narration on the potential of industry 4.0:workers perspective/ factory perspective.

▪ Can a well estabilished and highly representative trade unionshape or, at least, influence the direction of technological changeinside companies? Under what conditions? Pursuing which goals?

▪ What is the impact of new technologies’ adoption on Lamborghini's network of suppliers?

Dipartimento di Economia Marco BiagiCAPP Centro di Analisi delle Politiche Pubbliche

32

* PhD Student, Sant'Anna School of Advanced Studies, Pisa

** Researcher, Sant'Anna School of Advanced Studies and Unimore CAPP Research Centre for the Analysis of Public Policies

*** Department of Economics Marco Biagi and Centre for Analysis of Public Policies,University of Modena and Reggio Emilia

Armanda Cetrulo* | armanda.cetrulo@santannapisa.itPasquale Pavone** | pasquale.pavone@santannapisa.itMargherita Russo*** | margherita.russo@unimore.it