Chrysler 2010 Annual Report Download - page 59

REPORT ON
OPERATIONS
58
HUMAN
RESOURCES
particular the provisions relating to the Fiat Industrial EWC, stating that the Italian trade unions did not have the
mandate to sign the agreement. Expressing surprise at this position, management stated that it considered
the agreement fully valid, having negotiated in good faith with those whom it believed to be legitimate counter-
parties, and asked EMF to formalize its position taking into consideration the consequences of decisions made
and reserved its right to undertake the appropriate review of the situation, with legal counsel if appropriate,
once such formal communication is received. As of the date of the report, no such communication had yet
been received. In contrast with the request of the Company, during the first half of February 2011, employee
representatives from two Group companies outside Italy sent requests to Fiat Industrial to start negotiations
for the establishment of an EWC.
In Italy, dialog continued with the trade unions at both national and local level and focused primarily on
management of low production volumes and the consequent under-utilization of production capacity. An
important element laying the foundation for the social dialog going forward was the meeting between the
Group’s CEO and numerous representatives of the Italian trade unions following the Investor Day presentation
on April 21st. With reference to the 2010-2014 Business Plan, the CEO reiterated that a pre-requisite for
implementation of the Plan – and, therefore, for launch of the associated program of investments – would be
full willingness and agreement to implement conditions for its success, including those that would ensure the
governability of plants. Several meetings to discuss implementation of the Plan in Italy, included a meeting
organized by the Minister for Labor and Social Policy in collaboration with the President of the Region of
Piedmont – attended by all national and sector trade union organizations – which was held in Turin on 28 July
2010 to discuss FGA’s industrial development strategy and the impact on jobs. During that meeting, the Group
CEO confirmed the Plan’s scope and objectives and reiterated that, before proceeding, Fiat needed certainty,
through specific agreements with the unions, as to normal operating conditions at plants and the ability to
respond to the demands of the market with the speed and in the manner needed to be able to compete
internationally.
The first plant where negotiations relative to the Plan were conducted was the G.B. Vico plant in Pomigliano.
Discussions focused on methods for proceeding with production of the future Panda (as announced by the
Group CEO at Palazzo Chigi in Rome on 22 December 2009) and for creating the operating conditions necessary
to initiate the €700 million investment program, by overcoming certain local issues whose continued existence
could jeopardize the end result. On 15 June 2010, after 3 months of complex negotiations, an agreement
was reached with FIM, UILM, FISMIC and UGL Metalmeccanici and approved by 63.3% of workers in a
referendum held on June 22nd. That agreement, which received significant media coverage, was the subject
of vigorous debate at local and national level and was interpreted variously by a wide range of commentators
who, in many cases, for propaganda purposes have assigned value and meaning to clauses in the agreement
that do not reflect their real content. On 29 December 2010, a specific national agreement was established
with FIM, UILM, FISMIC and UGL Metalmeccanici (both national representatives and those for the Province of
Naples), and the Association of Fiat Middle Managers, based on the preliminary agreement of June 15th. That
collective labor agreement will apply to Società Fabbrica Italia Pomigliano from 1 January 2011, which does
not adhere to the Confindustria system and, therefore, does not apply the Confindustria agreements.
With reference to the Mirafiori plant, discussions were held with government and trade unions on July 28th
and again with trade unions on July 29th and October 5th. Negotiations to define conditions and operating
methods necessary for implementation of the plan were initiated on November 26th in a meeting held at
the Unione Industriale di Torino. During the meeting, the Group CEO presented a plan for the relaunch of
the plant involving more than €1 billion of investment in the production of large SUVs for the Jeep® and
Alfa Romeo brands (on a platform developed in the United States), with estimated production volumes of
250,000-280,000 vehicles per year, that would enable full utilization of the existing workforce and potentially
create new job opportunities. Negotiations were suspended on December 3rd, after it became clear to Fiat
that the overall conditions necessary to reach agreement on relaunch of the Mirafiori plant did not exist.