Giancarlo Losma, president of UCIMU: “We are asking for an extension of the Tremonti-Ter law for the whole of 2010 and the implementation of the system promoting the scrapping of obsolete machinery, as announced by the government authorities at the beginning of the year”
Alfredo Mariotti, general manager of the association: “support for sector based holding companies directly linked to the fund set up by the Executive committee. The arrangement which sees the fund supporting private equity funds has been deemed unsuitable”
The machine tool order index in the fourth quarter of 2009 is still in the negative, registering an 8.8% drop, compared to the same period in the previous year. Thus the absolute index stands at 74.9 (2005 base=100). This is what emerges from the data elaborated by the Studies Department of UCIMU-SISTEMI PER PRODURRE, the association of Italian manufacturers of machine tools, robots, automation and auxiliary technologies.
This survey shows the further extension of the negative trend in order gathering for Italian machine tools manufacturers, in decline for the last six months.
Although the intensity of the decrease seems to be waning, recovery appears slow and difficult. On the other hand, for the first time in eighteen months, the survey reveals diverging trends in the Italian and foreign markets.
Compared to foreign markets, the index of Italian manufacturers’ confirmed orders highlights a 22.8% drop, compared to the same period in the previous year, the absolute value of the index thus stands at 66.9.
Domestically, however, the index of order gathering starts to rise again by 12.1%, equivalent to the absolute index value of 82.3, sustained and driven – as was predicted - by the effects of the Tremonti-Ter measure.
Annual data shows a contraction of confirmed orders equal to 46.9% compared to 2008, for an absolute value of the index of 60.6, comparable to that surveyed in 1993.
According to Giancarlo Losma, president of UCIMU-SISTEMI PER PRODURRE: “the results of the latest quarterly survey of the Studies Department of the association highlight a still worrying situation”.
“The radical change of direction registered in the domestic market confirms the value of the Tremonti-Ter measure, as a useful tool to sustain the rebirth of investment in capital goods. For this reason - continues Giancarlo Losma - we ask government authorities for the extension to the end of 2010 of the tax relief measure (whose expiry date is currently set on the 30th June) on profit reinvested in highly technological machinery so that the results achieved by Italian manufacturers in the domestic market in the last few months of the year may not turn out to simply be a flash in the pan destined to be extinguished almost immediately.
“In particular the association asks that the Tremonti-Ter measure be applied to production machines ordered by 31st December 2010 and delivered within the eighteen months following the emission of that order”.
“In addition to this – added president Losma – it is essential that a system of incentives for the scrapping of obsolete machinery with a 50% tax reduction on the sum invested in new, replacement machinery, should be set up. This measure, as announced at the start of the year by government authorities, must be part of a more ample set of measures (including the automotive, household appliances, furniture and other sectors) which as well as benefiting the recovery in consumption, permits the technological updating of production systems necessary for maintaining the Italian industry’s competitiveness”.
“On the other hand - noticed Alfredo Mariotti, general manager of UCIMU-SISTEMI PER PRODURRE – the credit crunch has inflicted a hard blow on companies in the sector, some of which have had to undergo restructuring. Although many of those that had to make use of redundancy payments today can manage to make a new start with the structure preceding the market collapse, some are still in great difficulty. For these companies we advocate immediate intervention before their position within the market is irrevocably damaged”.
To this end, UCIMU-SISTEMI PER PRODURRE asks the government for support for the development of sector based holding companies on the model of MT HOLDING established by a mix of private and public contributions. In addition to the “Cassa depositi e prestiti”, we would expect the intervention of: lending institutions, Simest, Sace, regional investment companies and possibly private investors. The businesses taken over by holding companies will be able to decide whether to maintain control and if so to what degree. Thus, entrepreneurs will be able to remain directly involved in the business’s decisional processes should they wish to do so.
In particular - concluded Mariotti – in order to work properly, sector based holding companies must be able to count on the direct contribution of the fund set up by the Executive committee and not on indirect support, that is thus mediated by private equity funds, whose remuneration times are characteristically entirely different from those of sector based holding companies. The latter’s main objective is in fact an initial phase of restructuring preparatory to the re-launch of the system