More Alitalia

Today's news in the ongoing Alitalia saga:

It appears as though it will be necessary to fire 5000 people from Alitalia, according to the Berlusconi plan, significantly more than the Air France plan called for. However, he said, the unions are pretty much faced with a "take it or leave it" offer - leave it and the whole thing takes a nosedive. In an Italy where the unions are still quite powerful, and where they rejected an offer from Air France with far fewer "redundancies", it's hard to imagine that the unions won't react badly to the, deal, which will make for an interesting confrontation: on one hand, Berlusconi will have egg on his face if he fails to do what he promised, on the other hand, if the company finally, mercifully goes bankrupt, those people will be out of a job in any case. In one of his usual blunders, Berlusconi also mentioned that "yes, the money's there, enough that I even had to say no to some people". Including the people he plans to can, I suppose?

Naturally, not many other specifics were available: after talking with the Minister of Transportation in France, Berlusconi also stated that, there would be "synergies" with the French, whatever that may mean.

There's also evidence that some of the wealthy participants in Berlusconi's deal to throw good money after bad are being leaned on to "do their part". A member of the Benetton family said they would lend a hand, but that they didn't want to become part of a new "IRI", or Istituto per la Ricostruzione Industriale, a fascist-era company tasked with buying up failing companies.

Published on Wed, 30 Jul 2008 04:53
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Wide open country

One of my "guilty pleasures" in life is reading cowboy books by authors like Zane Gray and Louius L'Amour, about a fictional and romanticized "old west", and I have to admit that it makes for nice daydreams. Where I grew up in the rainy, green, fertile Willamette valley of western Oregon isn't really "the west", but still has plenty of lonely, empty places. Go to the east of the state, though, and vistas like this are common:

Fort Rock plains

For those interested in visiting Fort Rock, where this picture was taken, the following is a beautiful drive that takes you from the Paulina Lakes, which are worth visiting themselves, through the Ponderosa pine forests, and volcanic landscape, until all of a sudden you come out of the forest and see the high Oregon desert spread out in the distance, with Fort Rock looming above the plains:
View Larger Map

Indeed, Oregon's Harney County, has a population density less than 2 people per square mile, which was one definition of the "frontier".

Living in Europe, sometimes I miss those kinds of places. Here, it's hard to go anywhere without there being a lot of people and their constructions around. Even the tops of mountain passes high in the Alps almost always have a hotel/restaurant/store, which is nice in some ways: it's possible to walk through the Alps from alpine hut to alpine hut, sleeping in comfort, and eating good, warm meals, instead of lugging everything around in a huge pack, as one might do on the Pacific Crest Trail. However, at times it's also very awe-inspiring to visit a place like Steens Mountain, where there is truly nothing, but nothing around. From the summit, at 9000+ feet, looking to the east, you can see for vast distances, and yet see very little to indicate the presence of humans - a few roads, some antennas, and a ranch or two, but it is completely swallowed up in the immensity of the landscape.

On the other hand, I think Europe's cities are way better: driving is necessary to get around someplace as big as eastern Oregon, but I'd much rather walk or take a bicycle when getting around town.

If I were putting together a perfect world, I'd be in a European city, with some real, "western" wilderness nearby, as well as some "civilized" European-style outdoors as well.

Published on Tue, 29 Jul 2008 04:40
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The Alitalia Saga

Forget "The Sopranos", the Alitalia saga is just as exciting, and despite seeming too strange to believe at times, isn't fiction.

Alitalia is Italy's national airline, created in an era when everyone, even tiny Belgium, had their own airline. Today, it teeters on the edge of bankruptcy, as Italy's politicians shovel wads of cash at it to keep it operational.

I've actually flown Alitalia a few times, and while it wasn't bad, suffice it to say that what with strikes, exorbitant pay packages, and mismanagement, there has only been one year in their history when they've turned a profit.

In my view, Alitalia is emblematic of the rot that riddles the Italian economy. Italian taxpayers, including the majority who have never flown, let alone with Alitalia, have paid billions over the years to keep a poorly run company operational, and to employ workers who by most accounts, earn well over market rates for at best satisfactory service. Instead of leaving the company to fail and let others compete to serve the country on their own dime, Alitalia has become a political football; controlled by politicians for their own ends, rather than run as a business with customers to serve and to make a profit. My sincere hope is that sooner rather than later it is finally put down. Perhaps, were Italy lucky, it might even mark a turning point in the efforts to clean up and liberalize the stagnant economy, but that might be wishful thinking on my part.

The past year of its history is illustrative:

In 2007, the center-left Prodi government decided to sell off the government's 49% stake in the company, completing its privatization, but imposed so many conditions on the sale that the only serious offer was from Air France-KLM. Talks between Air France and Alitalia's unions were under way in the spring of 2008, when Prodi's government fell apart and new elections were called (due to one of his coalition's allies being incensed at being investigated for corruption). Berlusconi, supposedly the market friendly business candidate, then proceeded to stick his nose into the company's business even more than the previous government had: he promised that there was an "Italian" solution waiting in the wings, that would make all Alitalia's problems go away. Aside from absurdity of caring about the nationality of the company's purchasers, the real problem with Berlusconi's big words was that, paradoxically, they put some strength into the unions negotiating with Air France. No longer with their backs to the wall, and facing the huge cuts necessary to bring the company into some semblance of profitability, they had an out!

Jean-Cyrille Spinetta, the head of Air France-KLM, after weeks of fruitless negotiations, apparently literally walked out of the talks, ending the only serious negotiations to sell the company, which continued, of course, to bleed money, in part because of poor financial management regarding the rapidly rising price of oil, and in part due to the same old problems of inefficiency.

But what of Berlusconi's "Italian coalition"? Well, it turns out that he didn't actually name names or have much of anything concrete lined up beyond a bunch of wealthy businessmen who, most likely to try and get in good with the new government, most likely gave him some vague assurances along the lines of "if you get all those other guys to go along, I might be able to as well". In the meantime, Berlusconi had won the election, and Alitalia was staring at running out of money in the next few months.

With this bleak situation, more judicious governments might have simply left things alone, trying as best as possible to provide some aid to the ordinary workers losing their jobs as the company went into a tailspin. This, however, being Italy, and Silvio Berlusconi's honor on the line, what else to do but take 300 million Euros of government money (not his own, mind you), 5 Euros from every man, woman and child in Italy, and give it as a "loan" at "market rates" to Alitalia. Clearly, this is a farse, as true market rates for a loan to a company that has never turned a profit would be quite high, to price in the risk of never seeing the money again.

Furthermore, the European Union has rules against state aid, which the "loan" clearly violates, since in reality it's unlikely that the government will get its money back, and it was not done at true market rates. Were the government to have simply given that cash to the ex-employees of a bankrupt Alitalia, there would be enough for nearly 25,000 Euro a person, hardly money to sneeze at. Instead, it's the only thing between Alitalia, and a crash landing that would open up the Italian marketplace to other, better run companies. Naturally, there is still no word, as of late July 2008, of the details of Berlusconi's "Italian coalition", the stock has been suspended on the Milan stock exchange, rumors of impending bankruptcy continue to swirl, and in reality the government has been busy with other things; mostly passing laws getting Berlusconi off the hook in various ongoing trials.

Because of its interest in opening up new Italian routes, one of the chief opponents of the "loan" is Ryanair, a low cost European airline, which is famous for putting air travel within the reach of just about anyone. Incensed at the duplicitous behavior of Italy's politicians, and lack of progress at resolving the situation in one way or another, they started running an entertaining ad on their web site today:

Ryanair Alitalia

which needs some explaining. The man "flipping the bird" is Umberto Bossi, one of Berlusconi's allies. The leader of the "northern separatist" party, he was caught flipping off the national anthem of Italy (I wonder what would happen to a US politician doing that!), and the picture made the rounds of all the newspapers. In Ryanair's ad, it's used along with the text: "Minister Bossi to Italian passengers", "the government", "is supporting Alitalia's high prices", "is supporting Alitalia's frequent strikes", "doesn't care about Italian passengers".

Much as I'd like to see the whole thing wind up with Alitalia bankrupt, following the twists and turns of the whole affair has taken on a sort of morbid fascination. I'll be sure to post updates as the story develops.

Published on Sat, 26 Jul 2008 03:41
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Children in Rome suffer from "ethnic food"

The new mayor of Rome, Alemanno, says that the previous administration is responsible for inflicting "ethnic food" on school children.

Apparently, the children refused to eat it, and those that did had "stomach aches"!

It sounds funny, but I can envision it being a serious issue in Italy, where plenty of people have never had anything more "ethnic" than ... well actually plenty of people I know there have never even had (westernized) Chinese food, let alone Indian, Thai, Japanese, Mexican or much of anything else. One of my wife's relatives, who shall remain anonymous, saw the delicious sushi that she had prepared, took a bite and spit it out! A former colleague of mine had Chinese for the first time in his life at a company dinner - and spent the whole time making comments about how strange and bizarre everything was. I've had friends lined up to go out to dinner who suddenly lost interest when the group opted for Japanese instead of a pizza. Italian food is certainly great, but sometimes it's disheartening to see just how distrusting and fearful people are of anything different. Luckily, not everyone is that way (my wife not only appreciates foreign food, she's quite good at cooking a variety of things - lucky me!), and things are changing, albeit slowly in some cases.

Published on Fri, 18 Jul 2008 03:19
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Ignorance, Bliss, and living abroad

When you move somewhere new, and aren't really that "integrated", one of the nice things initially is that you concentrate more on just living your life and tend to ignore stuff that you can't do much about. That's actually been one of the nicer aspects of living in Austria for us - it's a nice, stable democracy where things basically work. Not speaking much of the language, we are pretty ignorant of the politics. Long term, that might not be such a good thing, but following US and Italian politics is enough for anyone, and in most cases, there isn't a lot you can do besides voting sensibly.

When I first moved to Italy, life was that way: I didn't follow the local politics much, nor did I follow things back home, as the internet was still not widely available. All things considered, I was probably better off than I am now, bombarded by the misdeeds of Bush and Berlusconi.

Published on Fri, 18 Jul 2008 02:38
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