Chrysler 2006 Annual Report Download - page 13

The meeting with the EWC Selected Committee was held
in May. The Group CEO, Sergio Marchionne, spoke at the
annual plenary meeting held on November 13 and 14, 2006,
when he presented the results achieved, objectives and
strategies of the Group for future years.
In Italy, constructive dialogue continued with the trade unions
at the national and local level. Representatives of employees
were provided with constant updates on the evolution of the
Fiat Group relaunch and development plan, initiatives taken
to achieve set objectives, programs to renew the product
range, and production allocations.
The meeting held at the Mirafiori Motor Village on June 28, 2006
was of key importance. Sergio Marchionne presented an update
on Group performance, the results achieved and objectives to be
realised. He pointed out that the improved situation had made
it possible to maintain production activity at plants in Italy and
created the conditions for renewing the Group Supplemental
Collective Agreement. This agreement was formally signed
by the Company and the trade unions at that meeting.
Additional updates on the Group’s growth prospects were
communicated to the trade unions upon presentation of the
2007-2010 Plan targets at the “Fiat Investor & Analyst Meeting”
held on November 8 and 9, 2006. The production and
employment implications of the Plan were then discussed at
the meeting with trade unions on December 15, 2006, when
the various Sectors illustrated their individual financial targets
and product renewal and investment plans, which represent the
premise for assuring full use of Group resources in Italy. These
forecasts made it possible to reach the labour agreement on
December 18, 2006 that shares, on the one hand, the need to
overcome remaining overstaffing situations, through “mobilità
lunga” (long-term mobility benefit to bridge the period prior
to retirement) for 2,000 Group employees. On the other hand,
it expresses the commitment made by the trade unions to
support implementation of actions to organise work, work
shifts, and work schedules as necessary to increase use of
the production capacity and thus employment.
Management of production requirements
The improved market situation and higher sales in most
Sectors entailed the need to increase production volumes,
which were generally tackled through use of overtime work
Report on Operations Human Resources 23
In Italy,metalworking companies ended in January
negotiations for a two-year renewal of the compensation
provisions of the National Collective Labour Agreement for
Metalworkers (white and blue collar). This contract, which
covers about 74,000 of the Fiat Group’s employees, expired
at the end of 2004. Negotiations between Federmeccanica
(a national organisation that represents Italian metalworking
industry) and the national trade unions Fim-Cisl, Fiom-
Cgil,Uilm-Uil and subsequently Fismic were particularly long
and challenging. Only an agreement to extend the validity
of the new contract by six months (i.e., until June 30, 2007)
succeeded in breaking a stalemate in negotiations at the
beginning of 2006. When fully operational, the agreement
signed on January 19, 2006 will provide an overall increase
in compensation of about 6%, as follows: an average monthly
wage increase of 100 euros (implemented in three stages: 60
euros beginning in January 2006, 25 euros in October 2006
and 15 euros in March 2007) plus a lump-sum payment of 320
euros for 2005.
On June 28, 2006, after just over a month of negotiations
and without strikes, the agreement for renewal of the Fiat
Group Supplemental Agreement was signed with the Fim-Cisl,
Fiom-Cgil, Uilm-Uil, Fismic, and Ugl trade unions.
This agreement applies to most of the Group’smetalworking
sector companies operating in Italy and defines additional pay
conditions and rules with respect to those envisaged by the
National Collective Bargaining Agreement for Metalworkers.
The new agreement recognised the contribution made
by workers to improving the situation of the Group, envisaging
an increase in the annual performance bonus – an annual
bonus tied to Group performance – according to the
achievement of profitability targets. The June agreement
also established the terms and conditions for applying the
professional Apprenticeship Agreement at the Fiat Group.
Outside Italy, the principal collective bargaining activities
conducted at the Group level in 2006 include: the annual
negotiations held in France, which resulted in pay increases
of between 2% and 3% according to the different companies,
and the agreements made in most Group companies in Poland.
In Germany, collective bargaining was conducted at the level
of each Land for renewal of the metalworking sector
agreement, which is applied by most of the Group companies
Report on Operations Human Resources22
and temporary workers. In order to increase the rate of plant
use, work shifts distributed over six days of the week were
implemented at the Melfi (SATA S.p.A.), Pratola Serra (FMA
S.r.l.), and Termoli (Fiat Powertrain Technologies S.p.A.) plants.
In contrast, less and less recourse was made to the Cassa
Integrazione Guadagni (Temporary Layoff Benefits Fund)
over the course of the year.
Recourse to the “Cassa Integrazione Straordinaria” (Longer-term
Temporary Layoff Benefits Fund) for the reorganisation of the
FPT Mirafiori plant concluded in autumn 2006, following the
return to work by employees within the envisaged deadlines.
At December 31, 2006, a total of 234 employees from
the administrative, technical, and sales department of Fiat
Auto, at Mirafiori, and 324 at Arese were still receiving benefits
under “Cassa Integrazione Straordinaria in deroga” (a waiver
for the Longer-term Temporary Layoff Benefits Fund).
Outside Italy,the plants in Brazil and Poland in particular
were affected by the need to increase plant output rates.
This involved extensive use of overtime work, which in certain
cases exceeded 10% of the normal schedule, an increase
in the number of work shifts, and the hiring of temporary
workers.
Agreements for work shift flexibility according to fluctuations
in production requirements were applied in Germany (Iveco),
Belgium (CNH), and Poland (CNH).
Restructuring and production streamlining measures were more
limited. Streamlining of excavator production was particularly
significant in this context, resulting in the halt of these activities
at the CNH plant in Berlin. The employment impact of this
measure was defined in “reconciliation of interests”
agreements and the September 2006 social plan, which ended
a labour dispute that had lasted approximately six months.
Collective bargaining
With regard to collective bargaining involving compensation
issues, the agreements reached with the trade unions call
for wage increases that are generally in line with or slightly
higher than the rate of inflation. The purpose of these
agreements was to help employees preserve their purchasing
power and link any further wage increases to the achievement
of the targets to improve the Company’s performance.
operating in that country.The new agreement envisaged
average wage increases of about 3%.
In Brazil,increases similar to those envisaged at other large
groups were applied, in addition to annual bonuses of varying
amounts according to company results.
Labour disputes were down sharply from 2005 and involved
specific situations, such as the dispute in Berlin, or episodes
of small-scale labour unrest at certain production plants on
specific, limited problems.