As consumption is falling in the international eyewear market, the two major European manufacturers are reducing their production. As they are both Italian, they are making use of an Italian system that allows them to lay workers off temporarily in times of economic difficulty, with part of their wages paid by the state. Luxottica and Safilo have both applied to the Italian government for a period of ?cassa integrazione? for their workers. Negotiations are currently under way with the unions, as the system entails a reduction in salary for the workers.
Luxottica has already agreed with the unions to four days off for almost all of its 6,000 to 7,000 workers in its six Italian plants ? two days in January and two in February. The group has denied rumors published in the Italian press that, in three of the six plants, this period could be prolonged. Spokesmen for the group have confirmed, however, that the current situation is the result of the slowdown in consumption, which lasted through the Christmas period. This is the first time in Luxottica's history that it has resorted to such measures.
The situation would seem to be more serious for Safilo, which has applied for a two-month period of ?cassa integrazione? for the 1,200 workers at its Belluno plant, from Jan. 26 to the end of March. But the layoffs would be organized on a rotating basis, so that production would not be halted completely for two months, but spread over the period, with groups of workers laid off at different moments, taking a reduction of €300 from a salary of €1,100.
Safilo has made no official announcement to date, as the final meeting with the unions is scheduled for Jan. 26. During the previous negotiations the union representatives were informed that the reason for the drastic reduction in production was a 40 percent drop in orders for the first quarter of 2009. With the entire district of Cadore being affected, the government is preparing to extend the ?cassa integrazione? measure to small firms with fewer than 15 employees, which are currently excluded from the system.
Mazzucchelli, global leader in laminates for eyewear frames, has also been forced to place two-thirds of its workers - or a total of 265 persons - on temporary layoffs. They have been forced since last December to stay at home for two days a week, and this should go on for a few months.
The company's order backlog remained stable until October, but from November on it was down by 30-40 percent. The management feels that eyewear producers and their clients want to reduce their inventory in view of a drop in final consumption estimated at between 10 and 20 percent.