At 31 December 2011, Fiat Industrial Group had 66,998 employees, an increase of 4,875 over year-end 2010 (62,123). The change was partially attributable to the difference between new hires (approx. 9,800) and departures (approx. 6,500) during the year, driven primarily by hiring in Latin America and North America related to increases in production volumes. In addition, a net increase of around 1,600 employees was attributable to changes in the scope of operations associated with: the acquisition of full control of L&T Case Equipment Private Limited in India by CNH and the line-by-line consolidation of Iveco Finance Holdings Limited by Iveco (following agreement for orderly termination of the joint venture with Barclays), insourcing of some Iveco dealers in Europe and Australia, and transfer by Fiat Group companies of R&D activities and personnel to Fiat Industrial sectors in Italy, as well as activities and staff from Fiat Powertrain (Fiat Group) to FPT Industrial.
ORGANIZATIONAL AND MANAGERIAL DEVELOPMENT
Fiat Industrial, created on 1 January 2011 through the demerger of activities from Fiat S.p.A., is active in the capital goods business and operates through 3 sectors. CNH, global leader in the agricultural and construction equipment business, increased the number of employees by about 3,900 through both organic growth and acquisitions, in support of growth of its business activities. Iveco, producer of trucks and commercial vehicles, implemented several organizational changes in 2011 to better meet new challenges and oppor tunities. During the year, the Group concentrated the industrial power train activities in FPT Industrial, a global leader in the design, manufacture and sale of power train solutions.
During 2011, SAP HR was extended to give full coverage to everyone in Fiat Industrial Group. First introduced by Fiat Group in 2009, the system is dedicated to management of the principal HR processes, and enables integration of all personnel and organizational information into a single database, as well as standardization of key processes. As a result, Fiat Industrial was able to focus on using the system to support global processes for human resources management:
- two new Compensation & Benefits modules have been launched to support Variable Pay and Salary Review processes for the whole Group
- for the first time, the 2011 Performance and Leadership Management process was managed for all Fiat Industrial companies through a single system that also facilitates management of evaluations for intercompany transfers
- the system is becoming the official source for headcount reporting for CNH (representing nearly 50% of the Fiat Industrial population) and, from 2012, the aim will be to incorporate Fiat Industrial’s other sectors, which underwent significant reorganizations in 2011
The business process and system architectures were also improved to enhance management of human resources data for smaller countries.
In terms of the coordination of principal corporate processes, Fiat Industrial has adopted an entirely different approach to that used before the demerger. It is focusing on the needs and priorities of individual companies, through the support of a very lean team of cross-company subject matter experts, to ensure the sharing of best practices and expertise groupwide. Most of the processes are managed in a decentralized manner. However, some administrative services are still provided by Fiat S.p.A. through service agreements.
The Performance and Leadership Management process, which has been in place for managers and professionals for a number of years, continues to serve as the basis for personnel management decisions, together with the Talent Review process, which enables early identification of high-potential individuals, as well as charting of their professional development.
Investment in training in support of Fiat Industrial’s business activities and the professional development of employees totaled around €24.7 million for the year. About 1.3 million hours of training were provided, including 80,175 hours of web-based distance learning.
Grants and Scholarships
In 2011, Fiat Industrial Group took part in the Fiat Grant and Scholarship Program for children of employees in Italy and abroad.
A total of 487 grants and scholarships were awarded (330 in Italy) totaling approximately €440,000. Recipients were located in Italy, as well as France, Spain, Poland, Belgium, England, Brazil, China and the United States: all countries where the Group has a significant presence.
In 2011, Fiat Industrial continued to work with trade unions and employee representatives to find common solutions for managing market conditions, which saw improvements over the prior year. Production stoppages, implemented using temporary layoff benefit schemes, were significantly reduced over 2010. A number of plants introduced measures aimed at increasing work flexibility, mainly through the utilization of overtime, and fixed-term and agency workers, to meet growing market demand. Intensive collective bargaining also took place at various levels, resulting in agreements with trade unions on pay and employment conditions in countries where Fiat Industrial is present.
In February 2011, Fiat Industrial was asked to begin negotiations for the formation of a European Work Council (EWC). Accordingly, steps were taken to establish a Special Negotiating Body (SNB ) consisting of employee representatives called to negotiate with company management on the scope of the EWC’s activities, its composition and the duration of the mandate. At a meeting held in Turin on 16 December 2011, it was agreed that the SNB would consist of 12 members representing group employees in the EU .
In Italy, dialog continued with trade unions at the national and local level and addressed solutions for needs related both to low production and high production levels. Withdrawal from Confindustria was confirmed on 30 September 2011 and, as a consequence, Fiat Industrial companies gave notice of termination of existing agreements. Negotiations were subsequently initiated with trade unions to establish a new collective labor agreement to ensure flexibility and competitiveness, while guaranteeing employees better working conditions and adequate pay. On 13 December 2011, an agreement was reached with FIM , UILM , FISMIC , UGL Metalmeccanici and the Associazione Quadri e Capi Fiat for implementation of a new one-year agreement, commencing 1 January 2012.
Management of production levels
During the year, outlook improved in comparison to 2010 for those business areas particularly hard hit in recent years by a collapse in demand. In Italy, Fiat Industrial companies continued to make use of temporary layoff benefit schemes, albeit with a significant reduction over the prior year.
Production stoppages were reduced both in France and in Germany, while in Spain they continued to be quite extensive due to the lingering effects of the crisis. In North America and Latin America, Fiat Industrial companies utilized overtime and agency workers, in addition to increasing headcount, as a result of increases in production volumes.
Restructuring and reorganization in Italy involved implementation of various agreements with trade unions. The severe crisis in the commercial vehicle market resulted in a dramatic drop in production volumes at the Iveco plant in Brescia, generating a surplus of approximately 1,000 workers.
In order to minimize the social impact, an agreement was reached with employee and local union representatives for the dismissal of about 100 workers, who would become eligible for retirement within a maximum of 3 years, through the use of a government benefits scheme. That agreement also allows for a reduction in hours worked per week for the remaining plant workers in accordance with the “Contratto di Solidarietà” legislation. In addition, the crisis in the bus market resulted in the closure of the Irisbus plant in Valle Ufita. The Company reached an agreement with employee, and national and provincial union representatives for implementation of an extraordinary temporary layoff benefit scheme for a period of two years for all plant employees.
In Spain, Iveco España announced the closure of its Barcelona plant due to a continuous decline in production volumes in recent years, and reached an agreement with trade unions to establish a mechanism for managing the redundancy of about 150 workers.
In the United States, CNH closed its compact tractor assembly facility in Dublin (Georgia) to further optimize its manufacturing footprint and reduce fixed costs. In addition, CNH continued a voluntary redundancy scheme, in line with the provisions of the agreement reached with the UA W in 2008.
Significant negotiations for company-level agreements in 2011 included: the annual negotiation in France, which resulted in general salary increases of between 1.4% and 1.8%, and a renewal of the profit/performance bonus agreement for Iveco France and CNH France; an agreement in Spain made by Iveco to provide cost-of-living increases for 2011 and subsequent years (up to 2013), with payment of a one-off amount to compensate cost-of-living increases for 2009 and 2010; and agreements in Brazil for pay increases based on the growth of the domestic economy and in line with salary increases recorded for the country’s industrial sector.
The level of labor unrest in Italy was higher than in 2010. A significant factor was the strikes held by employees at the Valle Ufita plant, which lasted from July to October and accounted for more than 50% of total strike hours at Fiat Industrial plants for the year. The overall level of labor unrest during the year in countries outside of Italy was negligible.