Chrysler 2001 Annual Report Download - page 20
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employees of the Fiat Group, is determined on the basis of
indicators that measure the Group’s operating performance
and the progress made by the Sectors in improving quality.
Even though the Group Agreement had formally expired at
the end of 1999, the Company and the unions agreed that
the Bonus would be paid under the existing terms to shield
employees from the wage losses that would have resulted
from the lack of a contract. At 1,383 euros (before withholding)
per person, the average annual bonus was slightly higher than
in 2000, thanks to an improvement in the quality indicators.
“… labor cost trends …”
In Italy, average labor costs increased by 2.5% in 2001,
roughly in line with the inflation rate for the same period.
In the other countries where it operates, Fiat was able to keep
compensation levels consistent with cost-of-living increases and
introduced variable bonus systems similar to the Results Bonus.
In 2001, the performance-based variable compensation
system used for Group professionals resulted in payments
that were slightly less than in the previous year.
“… collective bargaining …”
In Italy, employers and the unions representing metalworking
employees agreed to renew the compensation package portion
of a two-year Industry-wide Labor Agreement that expired on
December 31, 2000. On July 3, 2001, after four months of
negotiations, the employers association (Federmeccanica) and
most of the unions (FIM-CISL, UILM-UIL, FISMIC and UGL)
signed the new agreement. One union (FIOM-CGIL) chose
not to join in the agreement.
When fully implemented, the new contract will produce a monthly
wage increase (before withholding) which in the case of fifth-level
employees consists of a two-step increase of 67.14 euros, 36.15
euros payable as of July 1, 2001 and 30.99 euros as of March 1,
2002. In addition, in order to make up for the gap between the
old and new contract, the employers agreed to a lump-sum
payment of 232.41 euros, also distributed in two installments:
154.94 euros in July 2001 and 77.47 euros in July 2002. This
contract, which applies to about 90,000 employees of the
Group’s Italian metalworking companies, is expected to
increase labor costs by about 4% over the two years.
At the Company level, the Group Agreement, which expired
at the end of 1999, has not yet been renewed, even though
negotiations started in September 2000. This agreement,
which supplements the national industry-wide agreement,
applies to the major metalworking companies of the Group.
Despite the efforts of the Ministry of Labor, negotiations were
interrupted on March 31, 2001, when the unions, finding the
offers put forth by the Company to be unsatisfactory,
requested a suspension.
Collective bargaining negotiations outside Italy resulted in
the renewal of the agreement with the Brazilian metalworking
unions. It was reached through local agreements which call for
inflation adjustments computed as percentages of the wages
paid for the different employee levels.
“… discussions with the unions and involvement of the
employee representatives …”
At the European level, on June 8, 2001, the Company signed
an agreement with the European Metalworkers Federation,
acting in the name and on behalf of local member unions,
and with the Italian unions, renewing, until December 31,
2005, the agreement that established the Fiat Group European
Works Council. This agreement increases the members of
the Council and reallocates the Council seats assigned to
each country. It also provides an additional seat for middle
managers and sets forth more effective rules for the operation
of the Restricted Committee. On November 5 and 6, 2001,
the Fiat Group European Works Council held its annual
meeting in Turin under the new rules.
“… restructuring programs …”
At the Sector level in Italy, the Group developed restructuring
programs that primarily concern the Automobile Sector
(agreement providing pre-retirement or long-term layoff benefits to
719 employees), the Production Systems Sector (580 employees)
and the Metallurgical Products Sector (285 employees).
On June 22, 2001, the unions were informed of a plan to
reposition some of the manufacturing activities currently
located at facilities in the Turin metropolitan area. Under the
20
Trend in results bonus payments
(average for white collars and blue collars in Italy)
(in euros)
2000
1,360
199919981997
1,355
1,541
1,293 1,383
2001