Mendrisio Journal: In Mendrisio, Switzerland, Gold Can Be Solid and Liquid

The real gold is here because four of the world’s major gold refineries are on Swiss soil, three of them here in Mendrisio, turning roughly one-third of the world’s gold into bars and ingots. The wine is here because over the past several decades this Italian-speaking region has emerged as the largest wine-growing area in Switzerland, and the local merlot has carved a big place in the Swiss wine market.

Merlot, said Luigi Zanini Jr., 40, whose father began making wine here in the 1980s after importing Italian wines for decades, “is king, queen, prince and all of the nobility.” The company he and his father run, Vinattieri Ticinesi, is now Switzerland’s largest winemaker, producing about 500,000 bottles a year.

If Mr. Zanini deals in bottled gold, across town, at a sprawling factory with gray concrete walls seven feet high, Erhard Oberli handles the real thing, as the chief executive of Argor-Heraeus, a major refiner processing hundreds of tons of gold every year.

Gold refining flourished here, Mr. Oberli said, because of the proximity to Italy, where jewelry is a major industry and labor is cheap. “Italy, traditionally, was by far the biggest consumer of gold, taking about 800 tons a year, half legally and half illegally,” he said. The illegal part has largely been cleaned up, but Italy remains a big customer, as do makers of jewelry and watches in Swiss cities like Geneva.

The price of gold is now hovering at nearly $1,700 an ounce, compared with less than $300 a dozen years ago. That is not a direct benefit to Mr. Oberli, because his company is a processor of gold, not a trader. But the demand for melted-down gold and fresh ingots from raw gold has soared, so he now has a new $32 million enlargement of his factory to go along with the growth in the number of employees, to 229 from 152 five years ago.

Both the gold and the wine are feeding a prosperity here that contrasts sharply with the slump in surrounding regions, most notably northern Italy, long a powerhouse of the European economy.

Mendrisio, with its charming old downtown streets ringed by state-of-the-art factories, embedded in steep valleys ringed with vineyards, has long been a magnet for Italians in search of work. In recent years as Europe’s borders have grown increasingly porous, and Italy suffers the effects of a debt crisis, the numbers have soared.

Every day more than 7,500 Italians clog the roads, making the trek across the border in their Hyundais and Toyotas and the occasional Fiat, coming to jobs in Mendrisio, where the local population is only 11,600. About a decade ago, before Switzerland began joining various European agreements to eliminate border controls, most were unskilled workers in farming or construction, but they are now increasingly skilled people — engineers, chemists, accountants.

Meinrad Perler is the son of a farmer in western, French-speaking Switzerland who went into banking. When that career soured, he turned to his passion, winemaking, settling in Mendrisio in the 1980s. “It’s not the ideal location, too much rain in the wrong seasons, and hot, dry summers,” he said, steering his sport utility vehicle through steep vineyards.

Still, the climate has not prevented Mr. Perler, 75, from building an annual production of 210,000 bottles a year, mostly merlot. Of his 14 full-time employees, 8 are Italians, including his chief oenologist. When he recently advertised for an accountant, 132 letters came in, more than two-thirds from Italians.

“They’ll accept a job that is lower than their qualification,” he said, and for less money.

Over at the Zanini winery, of 72 employees, about half are cross-border Italians. “The tendency is to try and find people from Ticino,” the region Mendrisio lies in, Mr. Zanini said. “But maybe there’s more desire in Italy.”

At Argor-Heraeus, Mr. Oberli badly needs engineers, chemists and metallurgists, and cannot find them locally. “In Italy now it’s a catastrophe, and given the unemployment, you easily find young, well-trained people,” he said, turned out by schools like the Technical University in Milan. About two-thirds of his employees are Italians, who drive back to their homes in Italy when the workday is done.

Of course there are benefits to employing Italians, like lower pay. The Swiss federal statistical office released figures recently showing that while the average disposable income of a Swiss is roughly $55,000, that of cross-border workers like the Italians is about $48,000.

While this gap annoys Swiss employees, who see the foreigners as competitors, employers say the difference is justified. “Taxes are less in Italy than in Switzerland,” said Marco Nauer, 49, a metals expert at Argor-Heraeus who is responsible for hiring. The cost of living is lower in Italy as well, so earnings in Swiss francs go further.

Behind Mendrisio’s neo-Classical town hall, a large parking garage is being built. The dozen or so cars of the construction workers all have Italian plates. “With the crisis in Italy, there just isn’t any work,” said Davide Grassi, 33, a cement mason from Milan who in July began driving the 40 minutes to work here every day.

For some, it is more than money. Last September, Roberta Pellin, who lives in Olgiate Comasco, Italy, a 20-minute drive across the border, opened a little vaulted flower shop along Corso Bello, a pedestrian street in Mendrisio’s old town center, after working for 25 years in the flower business in Italy.

“I evaluated the situation in Italy and decided it’s far easier in Switzerland,” said Ms. Pellin, 44. The Italian bureaucracy is crushing, she said, and the professionalism is greater in Switzerland. Moreover, Swiss laws require stores to close Sundays, unlike in Italy, where they stay open seven days a week.

“I have two kids,” she said. “It’s about quality of life.”

Article source: http://www.nytimes.com/2013/01/03/world/europe/in-mendrisio-switzerland-gold-can-be-solid-and-liquid.html?partner=rss&emc=rss