Chrysler 2004 Annual Report Download - page 28

groups, and employees received annual bonuses that varied
according to company results.
Overall, labor disputes were relatively minor, with the exception
of the strikes that affected Fiat Auto’s Sata plant in Melfi in the
spring of 2004 and Iveco’s Brescia factory in the fall. The dispute
in Melfi forced the stoppage of the Sata facility, as well as
component plants located in the same district, for a period of
about three weeks. For about 10 days, this situation had a major
negative impact on other Fiat Auto facilities, where production
gradually ground to a halt due to the lack of deliveries of
components and vehicle assemblies produced in Melfi. The
dispute was settled with an agreement signed on May 9, 2004.
The agreement changed the distribution of work shifts and
called for the wage packages of Sata employees gradually to
be brought on par with those of other Fiat Auto employees.
The strikes in Brescia were called to demand negotiations for a
supplemental labor agreement at the factory level that would
provide wage increases in excess of those paid in the rest of the
Group. Consequently, the Company refused to negotiate these
demands.
The main development involving companies outside Italy was
the strike called this past November by the UAW (United Auto
Workers) in the United States, which involved 650 CNH
employees represented by said Union (plants in Racine,
Wisconsin; Burlington, Iowa; the Engineering center in Burr
Ridge, Illinois, and the Depot of St. Paul, Minnesota), for the
renewal of the Company Collective Labor Agreement. The
previous agreement, which expired on May 2, 2004, had been in
force for six years and had called for exceptionally burdensome
compensation and benefit packages that resulted in labor costs
double those of other CNH plants in the United States. The
dispute at CNH was five-month long and during this period
CNH used temporary workers to continue production, as
allowed under U.S. laws and practices. A settlement agreement
was reached on March 19, 2005 with a ratification vote by the
employees affected by the agreement. It provides for wage
increases in line with those granted at the major competitors’
facilities and includes many of the proposals put forth by the
company to increase flexibility and reduce labor cost as well
as health care costs for retirees.
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