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Fiat Chrysler Proposes Bonus Plan to Improve Labor Relations in Italy

The program outlines two forms of supplementary pay beyond employees' base salary. One is tied to meeting or surpassing annual targets, while the other is pegged to specific goals set for the Europe-Middle East-Africa region.

MILAN - Carmaker Fiat Chrysler Automobiles (FCA) announced an incentive system for employees in Italy tied to the group's productivity and profits in a move it hopes will improve prickly labor-management relations. 

FCA said in an announcement released late Thursday the scheme will pay bonuses to autoworkers tied to "productivity, quality and profitability targets established in the 2015-2018 business plan." 

The proposal -- which FCA says will cost a maximum of around 600 million euros ($646 million) over the four year period -- was designed by the company executives to turn the page on traditionally adversarial relationships in Italy between labor and management by more closely associating workers with financial and business objectives.

"In recent years, FCA has had to deal with the historical remnants of a stale labor relations model which pitched capital against labor. Those days are finally gone," said FCA chief Sergio Marchionne.

In recent years, FCA has had to deal with the historical remnants of a stale labor relations model which pitched capital against labor. Those days are finally gone."

— FCA Chief Sergio Marchionne

"What we are proposing today is a scheme which recognizes the central role that our workers play in the achievement of our 2015 - 18 strategic plan. Without them and their commitment, the plan is simply unachievable."

The scheme outlines two forms of supplementary pay beyond employees' base salary. One is tied to meeting or surpassing annual targets, while the other is pegged to specific goals set for the Europe-Middle East-Africa region.

Autoworkers will receive bonuses worth 12% of base pay if objectives are met, and up to 20% extra if targets are surpassed.

FCA said potential additional remuneration for a "middle category" skilled hourly employee over the entire four year period would total 7,000 euros if targets are fulfilled and 10,700 if they are exceeded.

"By incentivizing employees toward achievement of our strategic targets, the new compensation system represents a significant step forward,” said Marchionne.

The plan will initially cover all employees assembling cars, and a similar arrangement is being planned for workers producing components. 

Copyright Agence France-Presse, 2015

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