Chrysler 2002 Annual Report Download - page 19

17 Report on Operations Human Resources
of Fiat Auto, Fiat Gesco and Fiat Sepin. The applicable
implementation procedures were set forth in an agreement
signed on July 24, 2002 at the Ministry of Labor and Social
Policies by all of the trade unions (Fim-Cisl, Uilm-Uil, Fismic and
Ugl), with the exception of Fiom-Cgil. The agreement applies
to all employees who will become eligible for retirement while
receiving their mobility allowance and provides severance
incentives for leaving the company.
In the autumn, the Group then asked that Fiat Auto and certain
Magneti Marelli and Comau factories be granted business-in-
crisis status, which would give them access to the tools available
under Italian law to handle employment issues that arose as a
result of the corporate recovery plans. In October, the crisis
management plan was presented to the unions and to national
and local government agencies. During the first week of
December, this issue was resolved in a Framework Agreement
proposed by the Italian government but which the unions did
not sign.
Under the agreement, the government authorized the use of
the Special Temporary Layoff Benefits Fund for 5,600 employees
of Fiat Auto, Comau Service and Magneti Marelli starting on
December 9, 2002. The Fund may be used for up to 2,000
more employees starting in July 2003.
Up to 500 additional employees who work in some of the
operations of Magneti Marelli and the services areas will be
placed under the long-term unemployment benefit program
(in anticipation of retirement) by the end of 2003. About half
of these employees have already left the Group.
In the first few months of 2003, the Group and the unions
resumed discussions at the local level. These discussions
resulted in a number of agreements, which were signed by
most of the unions, on the methods that will be used to deal
with redundancies. Under these agreements, long-term
mobility allowances (the requisite spending bill is currently
being passed in Parliament) will be made available to about
2,400 employees. Another 700 employees will receive short-term
mobility allowance and no more redundancies are expected
by December 2003. These benefits will take the form of a
pre-retirement mobility allowance and will apply to all those
employees who will reach retirement age during their benefit
period.
Among the Fiat Group companies operating outside Italy,
Fiat Auto Argentina SA and the trade unions signed a staff
reduction agreement. Iveco completed the closing of its
Seddon Atkinson plant in Manchester, transferred production
to Madrid, and the design operations to Ulm. CNH began
reducing staffing levels at its O&K Orenstein & Koppel factory
in Berlin.
Increased Labor Unrest in Italy. Dissatisfaction with external
developments (enacting of job flexibility measures by the Italian
government) and Company decisions (launch of the plan to
address the crisis at Fiat Auto) produced a significant increase
in labor unrest in Italy. During 2002, the unions called work
stoppages that averaged more than 100 hours for the Group
as a whole, with peaks of more than 120 hours at Fiat Auto
and the factories more directly affected by the restructuring
plan (almost 300 hours for Termini Imerese).
The percentage of employees who supported these stoppages
averaged between 15% and 20%.