Chrysler 2015 Annual Report Download - page 227

2015 | ANNUAL REPORT 227
Arrangements with key suppliers
From time to time, in the ordinary course of our business, the Group enters into various arrangements with key third
party suppliers in order to establish strategic and technological advantages. A limited number of these arrangements
contain unconditional purchase obligations to purchase a fixed or minimum quantity of goods and/or services
with fixed and determinable price provisions. Future minimum purchase obligations under these arrangements at
December31, 2015 were as follows:
(€ million)
2016 420
2017 426
2018 365
2019 214
2020 176
2021 and thereafter 108
Operating lease contracts
The Group has operating lease contracts for the right to use industrial buildings and equipment with an average term
of 10-20 years and 3-5 years, respectively. The following table summarizes the total future minimum lease payments
under non-cancellable lease contracts at December31, 2015:
At December 31, 2015
Due within
oneyear
Due
between
one and
three years
Due
between
three and
five years
Due
beyond
fiveyears Total
(€ million)
Future minimum lease payments under operating lease agreements 190 289 201 257 937
During 2015, the Group recognized lease payments expense of €246 million (€195 million in 2014 and €199 million
in 2013).
Other commitments, arrangements and contractual rights
GAC Group
During the year ended December31, 2015, the Group committed to contributing a total 1.3 billion Renminbi (“RMB”)
(approximately €186 million) to our GAC Fiat Chrysler Automobiles Co. Ltd joint venture, which has begun localizing
the production of Jeep vehicles for the Chinese market, of which RMB 700 million (approximately €100 million) was
contributed in October 2015 and the remaining amount of RMB 600 million (approximately €85 million) is expected
to be contributed in 2016. A total of €171 million was contributed during the year ended December 31, 2015 and the
Group’s ownership percentage remained unchanged at 50 percent.
UAW labor agreement
In October 2015, FCA US and the UAW agreed to a new four-year national collective bargaining agreement, which
will expire in September 2019. The provisions of the new agreement continue certain opportunities for success-based
compensation upon meeting certain quality and financial performance metrics. The agreement closes the pay gap
between “Traditional” and “In-progression” employees over an eight year period and will continue to provide UAW-
represented employees with a simplified adjusted profit sharing plan. The adjusted profit sharing plan will be effective
for the 2016 plan year and is directly aligned with NAFTA profitability. The agreement includes lump-sum payments in
lieu of further wage increases of primarily U.S.$4,000 for “Traditional” employees and U.S.$3,000 for “In-progression”
employees totaling approximately U.S.$141 million (€127 million) that was paid to UAW members on November 6,
2015. These payments are being amortized ratably over the four-year labor agreement period.