Chrysler 2008 Annual Report Download - page 36

Report on Operations Human Resources 35
In accordance with the Fiat Group supplemental agreement
signed on 28 June 2006 and valid until 31 December 2008
(applicable to most Group employees in the metalworking
sector in Italy), a performance bonus was paid. This bonus is
determined annually based on profitability and quality targets
for the previous year having been achieved. The average bonus
paid in 2008 was €2,438 gross for workers in categories 1-4, an
approximate €400 increase over the average bonus paid in
2007. This increase was attributable to the Group’s positive
performance (which was in line with the targets upon which
the performance bonus is calculated) and, more specifically, to
payment of an additional component for Sectors which
achieved their sector-specific profit targets and an increase in
the quality-related component, which this year was applied
equally to all Sectors and employee grades.
Outside Italy, the main company-level collective agreements
established during 2008 include the annual negotiation in
France which resulted in salary increases, in line with inflation,
of between 2.5% and 3% depending on the company.
In Germany, collective bargaining for renewal of the
metalworking sector agreement was conducted at the level of
the individual
Länder . These agreements apply to most Group
companies operating in Germany. The new agreement has a
duration of 18 months and stipulates 2.1% salary increases in
February and May 2009, in addition to a one-off payment of
about €500 to cover the period between November 2008 and
January 2009.
Pay increases agreed in Poland were relatively more
substantial as a result of a higher rate of inflation than the
average for euro zone countries, and the resulting strong
pressure from unions to maintain the purchasing power of
salaries, as well as the strained production levels at the
Group’s plants.
In Brazil, most Group companies applied collective bargaining
agreements in place with the local industry associations for
each sector (e.g., FIEMG for the companies in the Belo
Horizonte, Betim, and Contagem areas). Others have stipulated
analogous company-wide agreements. Overall, increases under
these collective agreements were higher than inflation,
reflecting the country’s current economic growth. Variable
annual bonuses were also paid on the basis of individual
company results.
The level of labour unrest in Italy was lower than for 2007, and
the overall level of labour unrest for the other countries was
also negligible this year.
Industrial action related to renewal of the Group’s
supplemental agreement in Italy could potentially occur from
the second half of February 2009, when contractual conditions
requiring a three-month moratorium after trade unions present
their bargaining proposals to the company expire.