ITALY: The Corporate Hospital

There was no joy in Castelfranco Veneto. The northern Italian town's major industry, the Confitex raincoat and cloth factory, which employed 1,650 workers, was about to close. The company was nearly $20 million in debt and losses were mounting daily. Lamented the parliamentary representative from that district: "For us, Confitex's closing will be worse than an earthquake."

That was little more than a year ago.

Today Confitex and Castelfranco Veneto are thriving, beneficiaries of a new government-sponsored hospital for ailing companies. The agency, known as GEPI (for Gestioni e Partecipazioni Industriali, or Industrial Management and Participation), was created by the Italian...

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