Italy's Industrialists Angry and Impatient for Change

Italian industrialists are impatient, angry and frustrated with the incompetence of the country's political class and its failure to address deep-seated problems with radical reforms of its bloated public sector, rigid labour market and creaking infrastructure.

To prove their point, Confindustria has just nominated Emma Marcegaglia, a 42-year-old steel magnate, with a 95% approval rate to be the new - and first female - head of the main employers' body.

She is set to take over in May - by which time a new government will have been elected, probably with a wafer-thin majority and inbuilt instability among its coalition members. And one of her first tasks may well be to help unravel what is almost certain to be an unholy mess: Air France-KLM's agreed takeover of near-bankrupt Alitalia, the national flag-carrier losing €1m (£790m) a day.

By all accounts, Marcegaglia is a fervent believer in the benefits of globalisation - unlike some of her Confindustria colleagues who like the warm protectionist embrace of the state when the going gets tough and competition proves too strong. She may well find herself pitted against wannabe third-time premier, Silvio Berlusconi, who has, somewhat ambiguously, come out against the terms of Air France's takeover of Alitalia. (The chairman of AC Milan doesn't like the downgrading of Milan's Malpensa airport in plans submitted by AF-KLM's Jean-Cyril Spinetta.)

Spinetta, a tough bird, has won the support of the outgoing Romano Prodi government - well, its key economy minister but not its transport minister - for his proposal which values Alitalia at just €140m (plus debt) and has sent the Italian airline's shares plunging to a record low of €0.27. He clearly sees the takeover as heralding a new phase in the consolidation of the European industry - with BMI the next obvious target for the likes of German rival Lufthansa along with Spain's Iberia and, maybe, SAS. And, who knows, with changes likely to the EU-US "open skies" agreement on transatlantic flights, mergers and takeovers among European and American airlines in future.

Spinetta, who held stormy talks with Italian unions this week about his proposals, including at least 15% job cuts, reiterated his threat to walk away if his conditions for concluding a takeover are not met, saying he was not "obliged" to buy the airline. But, if he pulls off the deal, he will gain access to Alitalia's 25 million passengers and put his group, world leader in terms of passengers carried, at the forefront of the next wave of global consolidation. And, no doubt, win Marcegaglia as an ally and friend.

Plastics seek image change

Another business radical is Wilfried Haensel, who was an executive with Europe's biggest chemicals group, BASF, for 22 years and has been executive director of Plastics Europe since January last year. He is trying not only to alter the industry's image but shift it from the traditional role of industry group within Brussels' huge lobbying machine - 15,000-strong and growing.

PlasticsEurope, which has 104 members representing 95% of an industry turning over €280bn a year and employing 1.6 million in more than 50,000 companies, now speaks as the sole representative body, with five regional centers. But Haensel is shifting the body's role from one of advocacy - putting forward the industry's self-interested views in debating planned legislation - to what he calls "a tangible contribution to society".

He sees the industry at the heart of discussions about sustainable growth and fighting climate change, pointing to its prospective role in developing new solar panels, composite bodies for planes and cars - and sails for ships. Plastics, he says, consume 4% of global oil and gas but could produce huge savings in energy use. As an example, he says, if half of existing homes were insulated with modern plastic materials, that would cut 35% of household emissions or 350m tonnes of CO2 - half the EU's ambitious target for 2020.

"We need an alliance between industry and other institutions," he says, pointing to the inadequate public discussions in Britain about plastic bags - with the chancellor threatening retailers with legislation if they don't do more to persuade shoppers to switch to more durable materials. In the UK, he says, the system for recovering and recycling such bags is non-existent but his body has been working with Chichester on just such a scheme. It has been active in persuading French and Belgian retailers to offer heavier-duty "bags for life" - Carre four, for instance, charges €2.50 for each one but gives out free replacements when they are no longer usable.

Haensel is also trying to reach out to NGOs such as Friends of the Earth - and even the Women's Institute - to work together on campaigns. "There isn't sufficient dialog or cooperation yet," he says, "but if we cooperate in a sensible way industry can make step changes." To that end, he has persuaded member firms to release 30 people one day a week to serve on "action teams" discussing ways to improve energy efficiency and climate protection, resources efficiency, including disposal of waste, and consumer protection. "We want to be understood as a partner for solutions," he adds - admitting that it's an uphill struggle.

Trouble ahead at Hugo Boss

All is not well at Hugo Boss, the German fashion retailer acquired last year by British private equity group Permira. This week its chairman since 2000, Giuseppe Vita, said he was quitting at the end of June - long before his contract runs out in 2010. He's the third senior executive to leave since Permira bought around 90% of Boss after first acquiring its parent, the Italian group Valentino.

Chief executive Bruno Sälzer and production chief Werner Lackas have already quit amid suggestions that Permira is - in true "locust" style - raiding Boss to reduce its debt. The fund has simply said it is searching for a successor to Vita and has found some promising candidates.

But union members on the supervisory board and at the works council suspect that Permira is bent on a radical transformation of the company. Antonio Simina, head of the works council, told Der Spiegel: "Permira must learn that you cannot do whatever you want with us. If we must die, we will take a few with us into the grave." The unions have signaled they could veto Permira's choice of a new chairman of the Boss supervisory board.

It appears that the fund demanded a hefty special dividend for 2007 of between €800m and €1bn - to help pay off the €3bn it borrowed to buy Valentino, according to union leaders. In the end, it achieved a pay-out worth around €400m - but could come back and ask for more this year - a year of growing German union militancy over pay and jobs, redundancies and plant closures.