Giovanni | Leonardo Workers’ Coordination Committee, Grottaglie plant (Italy)
Good morning, everyone. Thank you for this invitation. I’d like to thank in particular Davide of the CARC Party. I am from Leonardo of Grottaglie, a worker who, together with other workers, has been involved in drafting a report focused on comparing civil and military aviation—and thus, as objectively as possible, analyzing the advantages and disadvantages of each from an industry perspective. Before moving on to the report, I’d like to take a moment to summarize the situation at Leonardo.
We work in Grottaglie, where—fortunately—we’re still producing civil aircraft now. The site opened in 2007, and we work on the Boeing 787; so we manufacture fuselage sections for the Boeing 787, a carbon-fiber commercial airliner. Unfortunately, we are a single-program operation—that is, we serve a single client—and despite various requests, there has never been diversification in the civil sector. There has been talk of diversification in the military sector by adding military packages, but so far, nothing has come of it.
Unfortunately, the risk at the moment is that Leonardo—at least that’s what seems to be emerging—wants to shift increasingly toward military production, thereby further weakening what little of the civilian sector remains, which is mostly concentrated in southern Italy-specifically in Grottaglie, Foggia, and the Pomigliano and Nola areas in Campania. This is because there has been talk for some time—a year now—of this joint venture with the Arab PIF fund, a Saudi fund; the terms remain unclear.
Former CEO Cingolani let slip in a speech that production might even be moved to partner countries, which, in a word, means offshoring.
So right now, the situation is very precarious when it comes to preserving what little is still sound at Leonardo in terms of civilian production, as well as preserving, among other things, the know-how and an important part of Italian industry, because let’s not forget that Italian civil aviation has been a source of pride since the 1960s, and this would therefore be yet another Italian industrial asset being sold off to foreign interests.
Moreover, at a time when the outlook for civil aviation is truly excellent and promising for the next 20-30 years—unlike during the COVID-19 pandemic—it now appears that the projected figures—and this isn’t just our assessment, but is confirmed by all market analyses conducted by Airbus and Boeing—the projected figures for the purchase of new fleets over the next 20-30 years are unprecedented in history, because there is the renewal of existing fleets—which are now all obsolete—and the purchase of new aircraft by emerging countries such as India or South American nations.
So these two main factors mean that demand for new aircraft is very high, and therefore, at a time like this, a sound company should not exit a business like this to confine itself solely to the military sector, but should find an opportunity for diversification in the commercial sector while maintaining both military and commercial operations—not least because, as we demonstrate with the figures in the dossier, the military sector is a business that is very limited in duration, highly subject to geopolitical fluctuations, funding, and the course of wars—and has therefore historically experienced periods of strong growth followed by sharp contractions, resulting in a highly volatile trend.
This stands in contrast to the civil sector, which has consistently shown steady long-term growth and, above all, has proven far less sensitive to international crises—whether financial crises, oil crises, or even wars.
The only time civil aviation experienced a slump—a collapse—was during the COVID-19 pandemic, when mobility restrictions were imposed, and so this was inevitable; but that was the only such historical moment, and we have already moved past pre-COVID levels in terms of recovery, and the civil sector, as mentioned, is expanding very rapidly.
So pulling out of the civil aviation business now is not only unethical, if you will, but also—from a business perspective, in terms of business risk—an absolute blunder, because maintaining civil aviation expertise right now can be a strategic factor in sustaining the long-term competitiveness of the Italian aviation industry and ensuring job stability as well. In our report, we discuss all of this as objectively as possible, citing all our sources—there’s an entire section listing the sources we drew upon, all of which are public.
We simply compiled the data and created charts to demonstrate that what is often claimed—that the military sector creates jobs—is simply not true; in fact, the exact opposite is true.
So, in the report, we analyzed historical data, using charts that show the trends in both the civil and military sectors since the 1970s, demonstrating precisely how the civil sector has been growing steadily—except for the Covid—induced slump, from which it is already recovering-while the military sector has always been subject to fluctuations driven by geopolitical factors.
This automatically means that, in terms of employment, the civilian sector inevitably offers greater stability—especially since it involves much longer—term programs, such as those for large aircraft structures, like the one we’re building in Grottaglie, which have minimum time horizons of 20-30 years but can last even longer.
This ensures predictability and planning in the workforce, which in turn means a company can confidently hire on a permanent basis, invest in its people, and invest in training and skills—because it has a secure workload for the next 30 years.
This is something that simply does not happen in the military sector, where projects are typically short-term contracts that may have a brief surge in demand lasting a few years, then there’s a drop in demand, perhaps a cut in public funding—which I’d say is a good thing—and this leads, as it always has throughout history, to a scaling back of programs. Consequently, this results in a lack of long-term predictability in the workforce.
Looking at the numbers, we see that in the military there are far fewer permanent contracts—about 40%—whereas in the civilian sector, 70% of contracts are permanent. Therefore, the impact on employment and the local economy is much, much stronger and more positive in the military sector, as is the impact on small and medium-sized enterprises and on the entire supporting industry that develops alongside and around these industries.
In the civilian sector—again, because it is predictable over time—a supply chain is created, along with maintenance companies that are structured, stable, and predictable over time, which is not the case in the military, where maintenance depends somewhat on the frequency of aircraft use, there is no constant, scheduled maintenance as there is in the civilian sector, and employment—especially that of small and medium-sized enterprises revolving around the military—is constrained by access to these projects and the ability to undertake this work, because we’re talking about secrecy requirements and very strict military certifications that prevent access for all small and medium-sized enterprises that would otherwise would like to participate in the supply chain—something that does happen in the civilian sector, where certifications are indeed required, but there is no secrecy and the supply chain is much more open.
So we then focused this report on employment; as I mentioned earlier, by highlighting the permanent contracts typical of the civilian sector alongside the military’s non-permanent contracts, and above all by citing a study by Gianni Alioti (the responsible for international work of on of the biggest Italian unions) we drew attention to the fallacy that rearmament boosts employment—this oft-repeated claim that “the military creates jobs, the military creates jobs”—but analyzing the numbers shows this isn’t the case, because historically, an increase in military spending has not coincided with an increase in employment; on the contrary, it has been exactly the opposite.
This is even more true in Europe, where the military sector’s impact on employment is limited because we have a high degree of dependence on the U.S. defense industry—and this is precisely now that we have it, is so glaringly obvious that it’s undeniable. We’re heavily dependent on imports of technologies and weapons systems made in the U.S.—or worse yet, made in Israel.
Consequently, this prevents any real expansion of production and employment; in other words, locally, the effects are ultimately not at all beneficial or positive, as they are in the civilian sector. The positive effects of the military sector are seen only in profits and stock market prices—that is, in stock market prices, meaning money that goes into the pockets of a few shareholders; otherwise, there is no impact on the local economy or on employment.
In fact, the impact is negative because, if we look at the environmental impact, the military sector has many problems, and this is another section of our report where we also analyze this aspect, the environmental impact: military training ranges have issues with noise pollution and other forms of pollution because a military jet consumes much more fuel than a commercial airliner, and considering that a commercial airliner carries 300 people, let’s say the per-capita consumption becomes much lower.
Above all, in the civilian sector, there are strict regulations in place that also allow access to Environmental Social Government financing—funding provided to companies that meet a whole series of environmental requirements—something that simply doesn’t exist in the military sector.
So, I’ve probably gone on a bit longer than the time allotted to me, and I’ll conclude by inviting everyone to download this report—perhaps the QR code will be shared with you after this session—and to spread it as widely as possible, because the goal of this report is, at the very least, to spark a debate on this issue and to debunk many assumptions taken for granted as true—such as the notion that the military sector creates jobs. This is a debate that should extend to the institutional level and to the country’s industrial planning.
I’ll say goodbye now; thank you all and thank you also for this opportunity you’ve given us.
