The world’s seventh largest automaker, FCA NV and tractor manufacturer CNH Industrial agreed to a four-year labor deal for their respective workers on Tuesday in Italy, signaling union relations are improving.
The agreement, which covers the years between 2015 and 2018, is applied to all 85,000 employees of the two companies in Italy, and also has a performance-based compensation plan that comes with achievement of various efficiency and profitability goals. If said targets are met and exceeded, the workers will get a bonus of 7,000 to 10,700 euros ($7,670-11,730) over the coming four years, according to a joint statement from the two companies. The idea has been exhibited at FCA’s automotive operations starting this year and is now being extended to other parts of the group in the home country, such as the component-making subsidiaries, and to CNH Industrial. FCA chief executive officer Sergio Marchionne, also chairman of CNH Industrial, has been at odds on numerous occasions previously with the unions – bidding for tougher rules on working hours, sick pay and strikes. He deemed them necessary to ensure a proper competitive stance for Italian plants in relation to the competition abroad.
FCA and CNH Industrial use the same collective labor agreement as they both exited Italian employers’ confederation Confindustria and have operations in related industries. CNH Industrial has been established through the merger of spun-off Fiat Industrial with CNH Global. Unions were positive about the labor agreement, voting the productivity-based bonus system as the European continent was still in recovery mode from the six-year slump in deliveries that ended in 2014.