La siderurgia pubblica italiana nel Mercato comune europeo (1956-1995)

This work analyzes the evolution of Italian public steel industry - namely, Finsider group and its subsequent evolutions - from the implementation of European Common Market (ECM) to the privatization of the public firms of the sector. Finsider was founded in 1937 in order to manage the line of business in steel sector acquired by IRI after the bailout of the biggest national banks; in the second post world war Finsider was restructured through an ambitious plan of investments, the "Piano Sinigaglia". The framework in which the public management had to operate was subject to a deep modification since 1951, when Italy decided to participate in the constitution of the European Community of Coal and Steel (ECCS). From then, the sector, usually benefited from protectionist policies, had to compete with more and more advanced competitors of Northern Europe. This event strongly affected the subsequent evolution of Italian steel industry, particularly for what concerns the public one. The participation of Italy to the ECCS became a "vincolo esterno", an element that public management constantly had to manage. The key role given to this factor differentiate this work from the previous literature on the topic. There were important gaps among ECCS steel industries when the common market was created. As a late comer, and compared to other ECCS countries, Italy had for a long time a limited productive capacity and efficiency, and a very dynamic demand. At the same time, in these countries, the steel industries became mature, with a latent problem of overcapacity, that exploded during the 70s. These differences explain the structural dynamics that characterized the ECCS steel market in the three decades after the creation of ECCS. In particular, Italy was constantly under the pressure of import from others ECCS countries, especially during downturns. Finsider handled this challenge with two strategies: on the one hand, it started a revamping of plants to adequate themselves at the efficiency level of other European countries; on the other hand, it augmented the productive capacity to respond to an increasing domestic consumption. This led to two important wave of investment, from the 50s to the beginning of 70s, (building and revamping of steel plant in Taranto, revamping of other plants). Despite this efforts, the State didn't provide adequate financial resources; moreover, the plants of the group was interested by the working class struggle that characterized the 70s in Italy. The debts contracted to finance development programs, the difficulties and the mistakes in their implementation and into the inadequate management of these plants, in addition to the market tensions of the 70s led to the important losses of public steel company in that period. In the successive decades, this scenario was exacerbated by a stronger reduction in consumption levels, together with important changes in monetary and exchange rate policies (revaluation of the dollar and creation of European Monetary System - EMS). Then, Finsider faced a constant deterioration of the ratio costs/revenues. For what concerns costs, it experimented an increase of the prices of raw materials due to the revaluation of the dollar, while the rapid increase of interest rate, due to the Banca d'Italia policies, generated a sharp increase of finance charge. For what concerns revenues, the negative trends were emphasized by the revaluation in real terms of Lira, caused by mechanisms that characterized the EMS. In this situation, the Finsider management had only few opportunities: first, the increase in the level of efficiency of plants and productive process; second, the changes in industrial relations. Despite achievements, the group faced important losses, that was granted by a massive public intervention. This intervention was under the scrutiny of European Commission, that regulated State aids to face the crises of the whole steel sector in ECCS. Important reduction of productive capacity and a progressive privatization in the steel industry were imposed. As a consequence, public steel sector was sensibly reduced; despite this, Finsider was liquidated in 1987 and its main lines of business were transferred to a new public firm, Ilva. At the end of the 80s, the deregulation of the steel market in Europe led to a situation of strong competition for players; meanwhile, the problems of overcapacity that characterized the European steel market until that moment were still unresolved. In this context a spontaneous selection process took place, described by two main trends: on the one hand, the most competitive companies implemented aggressive commercial policies to eliminate the weaker competitors; on the other hand, strong concentration processes began. The Ilva management tried to face this situation with a not completely coherent strategy: limiting the sales in order to reduce the impact of the fall in prices generated by the behaviour of competitors, and at the same time, acquiring shares in trading companies to increase its market shares. This strategy was unsuccessful: the investments oriented to increase vertical integration, without proper financial resources, generated an increase in indebtedness, exactly when a peak in interest rate was registered in Italy. At the same time, Ilva didn't realized any alliance or acquisition of foreign competitors. The new crisis hit the public steel industry in one of the most critical periods of Italian economic history. Since the exit from the EMS, in 1992, the Italian economic system carried out radical changes. In particular, an important process of privatization began. The steel industry was totally involved by this process: under the impulse of European Commission the Italian government rapidly dismissed the public shares in this sector. From 1992 to 1996 Ilva was divided into four parts (Acciaierie Piombino, Ilva laminati piani, Acciai speciali Terni e Dalmine), that were sell to as many private companies (respectively, Lucchini, Riva, Krupp e Rocca). In that way, the Italian steel industry at the beginning of the new millennium was characterized by a higher degree of fragmentation when compared to other European countries. In fact, in these countries, very important processes of concentration generated big companies, able to dominate the European market.