Employees and Local Communities

Employees

Human capital is a crucial factor in the Group’s ability to compete, both in terms of maintaining its position among the global leaders in the automobile sector and also in creating value that is sustainable over the long-term.

During 2012, the Group operated through companies located in approximately 40 countries and sold its products and services to customers in more than 140 countries.

At 31 December 2012, the Group had a total of 214,836 employees, a 9% increase over year-end 2011 attributable in part to changes in the scope of operations.

Employees by region and category
Fiat Group worldwide
31 December 2012
Total Hourly Salaried Professional Manager
Europe 88,625 57,576 14,526 15,392 1,131
North America 73,713 54,356 8,406 9,959 992
South America
46,949 38,695 5,309 2,794 151
Asia 5,360 2,161 2,364 809 26
Rest of World
189 25 65 97 2
Total 214,836 152,813 30,670 29,051 2,302
Employees by region and category
Fiat Group worldwide (*)
31 December 2011
Total Hourly Salaried Professional Manager
Europe 87,723 56,765 14,733 15,012 1,213
North America 60,348 43,143 7,485 8,835 885
South America
44,668 36,967 5,155 2,408 138
Asia 4,156 1,833 1,905 401 17
Rest of World
126 24 31 70 1
Total 197,021 138,732 29,309 26,726 2,254
(*) For year-over-year comparability, data for 2011 has been reclassified using a geographic aggregation which differs from the figures presented in the 2011 Sustainability Report.

During the year, the Group hired 33,361 new employees, of which 52.6% were in North America, where there was a significant increase in production levels. Of those new hires, 71.6% were employed under unlimited term contracts, reflecting the Group’s continued commitment to the long-term stability of the workforce.

Employee turnover
Fiat Group worldwide
2012
Employees at 31/12/2011 197,021
New Hires
33,361
Departures
22,839
Δ scope of operations
7,293
Employees at 31/12/2012
214,836

Management and Development

Recognizing merit, encouraging professional development and creating equal opportunity for individuals to compete for key positions within the organization are all an essential part of the Group’s commitment toward its employees.

Through a structured global personnel management process, Fiat Group identifies and develops talent and fosters the motivation of employees.

The Performance and Leadership Management (Performance and Leadership Management, PLM, for managers and professionals and Performance and Behavior Feedback, PBF, for salaried employees) process implemented worldwide is used to evaluate the performance of employees and set specific objectives to orient their results, professional development and behavior.

Performance and leadership mapping, which in 2011 was also extended to Chrysler Group employees, involves around 57,200 Group employees, including all managers and professionals, as well as a subset of salaried personnel. In addition to the PLM process, the Group also uses other performance evaluation processes to determine individual variable compensation.

Talent management and succession planning also form part of the HR management model and are designed to ensure alignment of processes and objectives worldwide. In 2012, 25 Talent Reviews were conducted for various professional families/companies/functions. The objective of the reviews is to identify talented individuals that merit additional investment in their professional development due to their leadership potential.

During 2012, the Group continued to invest significantly in training and skill building initiatives with a total of €83.7 million invested for the year, representing a 4.2% increase over 2011.

The Group’s extensive training offer was further expanded with new initiatives aimed at strengthening individual skills and communicating the Group’s strategy and values. Approximately 4.2 million hours of training were provided during the year (+3.4% over 2011) to around 135,400 employees.

The Group took advantage of production stoppages necessary for installation of new product platforms at the Melfi, Pomigliano and Grugliasco plants in Italy to conduct intensive training programs, which gave workers the opportunity to acquire skills that would be immediately applicable once production recommenced.

During the year, the Group introduced a pilot project based on the World Class Manufacturing (WCM) Cost Deployment methodology to evaluate the benefits of training initiatives.

During 2012, the training initiatives monitored as part of this project (cost of €0.4 million) were targeted at providing workers additional skills and resulted in an overall improvement in processes and working. The potential cost savings are estimated at around €2.4 million.

Training
Fiat Group worldwide
2012 2011(1) 2010(2)
Spending on training (€ million)
3.7 80.3 65.4
% of total personnel costs (%) 1 1.1 0.9
Hours of training provided (thousands) 4,206 4,048 3,196
No. employees benefiting (thousands) 135 139 132
(1) Includes Chrysler Group figures for the full year. (2) Includes Chrysler Group and excludes activities transferred to Fiat Industrial S.p.A. on 1 January 2011.

Diversity and Equal Opportunity

Fiat Group considers diversity fundamental to success and seeks to foster a work environment where employees feel respected, valued and included. In addition, in the hiring process it seeks to attract personnel that are highly motivated and can contribute innovation and diversity to the organization.

Diversity, including gender diversity, enriches the potential and experience that exists within the organization and, as a result, contributes to increasing the Group’s competitiveness. With respect to gender diversity, the percentage of female employees at Fiat Group continued to grow, reaching 19.2% at year-end 2012. For management personnel, women accounted for approximately 13.1% (+0.8% over 2010).

Female employees by category
Fiat Group worldwide (%)  2012 2011
Hourly
17.4 15.9
Salaried
29.1 28.5
Professional  18.2 17.6
Manager
13.1 12.7

The ability to innovate is closely correlated to the diversity of views and experiences brought to the development of new solutions. At Fiat Group, generation of innovative ideas is stimulated by the co-existence of different perspectives in an environment that values diversity and encourages collaboration. This is particularly evident with the Fiat-Chrysler alliance, which has brought significant results in terms of technological innovation and positioning in the global marketplace.

The Group is committed to offering all employees equal opportunities in every area, creating career and advancement opportunities in a culture that is free from discrimination and values diversity. That responsibility has been formally set out in Fiat S.p.A.’s Code of Conduct, Human Capital Management Guidelines and Human Rights Guidelines.

Through its Discrimination and Harassment Prevention Policy, Chrysler Group ensures application of those same standards in compliance with federal, state and local law. The Code of Conduct and a set of specific guidelines have been put in place to ensure uniform application of those standards worldwide. As stated in the Code of Conduct, company standards take precedence in countries and jurisdictions where legislation is less stringent.

To further promote a culture that respects and values diversity, the Group creates employment opportunities for disabled workers and monitors employment of national and ethnic minorities. Fiat Group also recognizes a responsibility to individuals who may have difficulty re-entering the workforce, and has initiatives in place around the world to promote their inclusion.

Work-life balance and employee-focused initiatives

Fiat Group recognizes that helping employees achieve a better work-life balance is not only essential for the well-being of the organization, but also enables employees to deliver a high standard of professional performance, resulting in fulfillment in their professional activities and personal lives. The Group supports the professional and personal goals of employees by offering flexible solutions, such as: flexible working hours, job sharing, part-time or reduced hours, telecommuting, reduced working week/summer hours, and parental leave.

Equal treatment of maternity, paternity and adoption leave again highlights the Group’s commitment to encouraging solutions – for both men and women – that enable them to achieve a balance between their parental responsibilities and their careers.

The Group has a series of programs and initiatives to promote achievement of a healthy work-life balance with support ranging from direct health and well-being services — which at Italian plants, for example, is available through a team of specialist consultants — to Employee Assistance Programs and the Work-Life Resource & Referral Program at Chrysler Group, which provides information and advice on a variety of issues.

Fiat Group also has a number of initiatives to recognize the ability and merit of young people, which, over the years, have become increasingly global in scope. Children of Fiat Group employees who achieve excellent scholastic results may be eligible for grants and scholarships to support their studies. In 2012, the Fiat Awards Program, a highly successful international initiative, was extended to Chrysler Group. The first Chrysler Group award recipients will be announced in early 2013.

A total of 2,982 grants and scholarships were awarded during the year, totaling approximately €2.5 million (+48% over 2011). Recipients were located in Argentina, Belgium, Brazil, Canada, China, France, Italy, Mexico, Poland, Portugal, Spain, the UK and the U.S.

Health and Safety in the Workplace

Fiat Group is committed to ensuring a safe and healthy working environment for all employees, in every area of activity and in every country. That commitment also extends to suppliers, service providers and customers.

The Group’s strategy for safeguarding and promoting health and safety in the workplace addresses several areas: application of uniform procedures for the identification and evaluation of risks; the highest standards of safety and ergonomics in plant and machinery design; promotion of safe behavior through training initiatives and awareness campaigns; assurance of a healthy work environment; and promotion of a healthy lifestyle.

For several years, the Group has been tracking and analyzing monthly performance data in each of these areas to ensure that objectives are being met. Health and safety performance indicators are, in fact, an integral component of the Group’s industrial performance measures.

A commitment to achieving ‘zero accidents’ is formalized in the Health and Safety Guidelines – which form the basis for policies in each area of activity – and global adoption of an Occupational Health and Safety Management System (OHSMS) certified to the OHSAS 18001 standard.

At year-end 2012, a total of 107 plants (including two operated through JVs), accounting for 123,000 employees had an OHSMS in place and were OHSAS 18001 certified.

The actions taken by Fiat Group over the years have resulted in a significant improvement in all accident indicators. For 2012, the Frequency Rate was down 21.4% over the prior year (with 0.22 accidents per 100,000 hours worked) and the Severity Rate was down 12.5% (with 0.07 days of absence due to accidents per 1,000 hours worked).

Effective safety management is also implemented through World Class Manufacturing tools and methodologies, active involvement of employees, development of specific know-how and appropriate investment, which in 2012 totaled €168 million worldwide.

Investment in health and safety during 2012 delivered further improvements in results and a progressive reduction in the level of risk attributed to Group plants in Italy by INAIL (the national accident and disability agency). This has resulted in a reduction in insurance premiums payable to INAIL. The total saving was more than €17.5 million in 2011 and approximately €16 million in 2012. Continued commitment in this area has also led to the expansion of a culture of safety throughout the organization. This has shaped the attitudes and awareness of employees who play a vital role in health and safety, not only for themselves but also for those working with and around them (e.g. co-workers, suppliers, consultants, etc.).

In addition to activities dedicated to safety in the workplace, significant emphasis is also given to initiatives to promote the physical and psychological health and well-being of employees. For example, investments and initiatives for the prevention of ergonomic injury are focused not only on how processes are organized, but also work station design, choice of machinery and instrumentation, and definition of production methods that are adaptable to workers of various ages, genders and physical characteristics.

Industrial Relations and Social Dialogue

As stated in the Fiat S.p.A. Code of Conduct, the Group recognizes and respects the right of its employees to be represented by trade unions or other representatives elected in accordance with local legislation and practice.

Fiat Group maintains relationships with trade unions and employee representatives that are based on mutual respect, dialog and constructive engagement with trade union organizations and employee representatives. During 2012, the dialogue continued with trade unions to achieve shared solutions to attain high standards of competitiveness and reduce the impact on workers of measures adopted in response to market conditions in Europe, which were particularly critical in Italy.

In Italy, Fiat Group companies applied the new contractual system (CCSL) signed at the end of 2011 with FIM-CISL, UILM-UIL, FISMIC, UGL Metalmeccanici and the Associazione Quadri e Capi Fiat. Negotiations for renewal of the contract began in October 2012.

The Fiat CCSL represents a change in the collective bargaining system in Italy with Fiat S.p.A.’s withdrawal from Confindustria opening the way for direct negotiations between the company and trade unions, effectively replacing the national collective bargaining agreement. The structure of the contract more adequately reflects the characteristics of a major multinational industrial group such as Fiat.

The Group CEO met with the signatory trade unions during the year to present the interim results. Despite the extremely challenging economic conditions in Europe which have had grave consequences for the auto market, particularly in Italy, the Group gave unions confirmation of its commitment to maintain existing production capacity in Italy and its intention not to reduce headcount, as long as there is continued availability of the temporary layoff benefits provided under law. Fiat also confirmed that it would resume investments at all Italian plants where production based on the Group’s global platforms is to be allocated. At the SATA Melfi plant on December 20th, Fiat Chairman John Elkann and CEO Sergio Marchionne presented plans for the production of a Jeep brand Utility vehicle and the new Fiat 500X beginning in 2014. Following an investment program of more than €1 billion, Melfi will be one of the most advanced car assembly plants in the world equipped with the very latest technologies and managed according to World Class Manufacturing standards. Activities to ready the plant for production of the two new models have already begun.

The plan selected by Invitalia (advisor to the Ministry for Economic Development) to ensure continuation of industrial activities at the Termini Imerese plant (Italy) – where, as announced in 2009, production ceased at year-end 2011 – did not go ahead. The Ministry for Economic Development is still seeking an alternative solution. At the European level, European Works Councils (EWCs) function as a supranational representative body whose purpose is to inform and consult workers at Community-scale undertakings. The Fiat Group EWC was established in 1997, on the basis of the implementing agreement signed in 1996 and subsequently revised and amended. The latest agreement renewing Fiat S.p.A.’s EWC was signed on 28 June 2011, although the membership of the EWC has not yet been fully appointed.

Collective Bargaining

Collective bargaining at various levels resulted in major agreements being reached with trade unions on both wage and employment conditions in several countries. The principal agreements include:

  • Italy: Fiat S.p.A. and the signatory trade unions of the CCSL, together with Fiat Industrial S.p.A., reached an agreement to merge the FASIFIAT and FASIQ supplementary healthcare plans for non-management employees into the new FASIF plan effective 1 January 2013. Under the agreement, the new fund guarantees free basic healthcare for all Fiat Group and Fiat Industrial Group employees, including cardiovascular check-ups and Long Term Care (LTC) coverage where assisted care is required
  • France: company-level collective bargaining in 2012 resulted in pay increases in line with inflation
  • Serbia: for the Fiat Automobile Serbia d.o.o. plant in Kragujevac, an agreement was signed with trade unions in November which established pay increases, as well as the Christmas bonus linked to the achievement of company targets and individual absenteeism for employees covered by the agreement. The company and trade unions also agreed a mechanism to compensate for production stoppages attributable to organizational factors
  • Canada: in September 2012 Chrysler Group reached an agreement with the National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW) on a new four-year contract. Also, CpK Interior Products Inc. (a company owned by Chrysler Canada Inc.) and the CAW union negotiated a new 4-year Collective Agreement for the CpK Guelph manufacturing facility
  • Mexico: Chrysler Group and the Sindicato Nacional de Trabajadores de la Industria Automotriz Integrada Similares y Conexos de la Republica Mexicana successfully completed the annual bargaining process, reaching an agreement in advance of the May 9th deadline

In 2012, the level of labor unrest at Fiat Group companies in Italy was significantly lower than previous years, both in terms of the number of instances and the number of employees taking part, despite appearances based on the level of public attention given to certain issues.

Outside Italy, the overall level of labor unrest was negligible with isolated incidents limited to individual plants.

Management of Production Levels

During 2012, auto markets in both North and South America showed significant signs of improvement. In Europe, by contrast, demand contracted for the fifth consecutive year with particularly negative consequences for Fiat Group manufacturing activities in Italy.

In Brazil, the Group made use of overtime and also reached an agreement with trade unions to establish shift rotas that were adequate to meet the needs of certain production areas.

For Chrysler Group, vehicle production continued to expand in 2012 in response to strong customer demand and in line with the 2010–2014 Business Plan announced in 2009. The increase was facilitated by the implementation of additional shifts at the Belvidere and Jefferson North assembly plants in the U.S., as well as increases in production rates and overtime hours at most manufacturing facilities. Correspondingly, the Chrysler Group hourly workforce across North America also increased by more than 6,000 employees compared with the previous year.

With the exception of Italy, there was a year-over-year decrease in production stoppages – implemented through the use of temporary benefit schemes, where possible, or mechanisms established through collective bargaining or company policies – as well as in the level of restructuring and reorganizations.

In Italy, extensive use of temporary layoff benefit schemes enabled the Group to manage production declines and to undertake restructuring and reorganization activities related to investment in new production without resorting to permanent redundancies.

The persisting crisis in the European auto market resulted in a realignment of production levels in Poland. During the year, Fiat Group companies in Poland continued to use flexibility schemes initiated in 2011. The significant drop in production volumes associated with the negative trading conditions and outlook had a direct impact on the Fiat Auto Poland plant in Tychy, where in 2013 it will be necessary to scale back from three to two shifts and realign the distribution network to current demand levels. This resulted in the announcement of 1,450 redundancies and the Group reached an agreement with trade unions on December 20th that established the conditions for selecting which employees would be affected, in addition to determining incentives for voluntary redundancy that vary based on years of service.

In other European countries, there were no significant restructurings or reorganizations and no significant production stoppages were required.

Suppliers

Suppliers make an important contribution to the strategic development and competitiveness of the business. Fiat Group maintains a continuous and active dialogue with suppliers to ensure a strong, mutually beneficial partnership. The Group actively promotes responsible behavior and sustainable development throughout the supply chain and seeks to establish long-term relationships with suppliers who meet the highest standards in quality, price and reliability, as well as sharing the Group’s values and approach to sustainability.

Group Purchasing, which oversees purchasing activities for the Group worldwide, managed approximately €44 billion in purchases in 2012 through a supplier base of approximately 2,700 companies.

The process for screening, selecting and managing suppliers is based on objective assessment criteria that ensure impartial treatment and equal opportunity.

To ensure the selection of suppliers is aligned with the Group’s sustainability policies, the procedures also require verification that prospective suppliers conform to specific standards for environmental and social sustainability. New contracts with suppliers contain clauses requiring adherence to the Fiat Group Code of Conduct and specific Sustainability Guidelines relating to human rights and working conditions, respect for the environment and ethical business practices.

Fully aware of the impact that its activities have on local communities and suppliers, the Group endeavors, where possible, to purchase direct materials from local suppliers. This supports the development of the local economy and enhances the competitiveness of companies throughout the supply chain.

As part of the process of continuous improvement, the Group’s World Class Manufacturing Purchasing function, in collaboration with the World Class Manufacturing (WCM) organization, continued to work in an advisory capacity with suppliers intending to apply WCM methods. During the year, the number of supplier plants implementing WCM, one of the highest production standards in the world, increased to 216. In NAFTA, employees from some 450 supplier plants participated in training programs with the objective of extending the WCM methodology to the entire supply chain.

Dealer and Service Network

Development of the expertise and know-how of salespeople, technicians and after-sales personnel in the dealer network is an essential element in the Group’s commitment to constructing an open, interactive dialogue with customers. Dealers and their staff represent one of the most important channels for establishing and building customer trust and satisfaction. The aim of the Group’s extensive and diversified training program is both to support the professional development of personnel in the sales network and enable them to play an even greater role in building the image and reputation of the Group.

As part of the process of continuous improvement in the quality of services provided by the dealer network, during 2012 Fiat Group provided over 6.2 million hours of training to more than 165,000 technicians and sales staff.

Local Communities

The Group operates with the conviction that it has a moral responsibility to contribute positively to the development and wellbeing of local communities. During 2012, the Group committed an estimated €21 million13 in resources to local communities.

In addition to direct financial contributions and donations in kind – where permitted by company policy – Fiat Group also supports local communities by encouraging employees to participate directly in volunteer activities during working hours.

The Group’s Guidelines on Investment in Local Communities provide indications on how to manage activities to benefit local communities and establish commitments that are consistent with the characteristics and positioning of each brand. Each initiative is managed at plant, company or brand level, except where the level of financial commitment requires approval and management at Group level.

During 2012, the Group’s local community initiatives covered a variety of areas, including: 53.1% to promote education, culture and art; 21.7% to develop social welfare projects (support for the disabled, assistance for the elderly, etc.); 5.7% for emergency relief efforts; and 19.5% for other areas, including healthcare.

By region, Group investment in local community initiatives was primarily concentrated in Latin America, which accounted for 54.2% of total resources committed, followed by North America (24%), Europe (17.3%) and Rest of World (4.5%).

Specific indicators are used to measure the benefits of all major local community initiatives and regularly assess whether the Group’s activities are in line with the needs of those communities. On the basis of those assessments, programs may be further developed, extended to other areas, and even converted into a long-term commitment.

13 Based on non-accounting data and calculation methods. Also includes estimates. Amounts in currencies other than euros were converted at the average exchange rate for the year to 30 November 2012. Excludes initiatives whose sole purpose is promoting brand image. Includes all Fiat Group companies worldwide.

Fiat SpA | Site Map | Legal Notes | Privacy | Contacts | Accessibility | FAQs | Glossary | General Archive   ©2011 FIAT S.p.A. - P.IVA 00469580013