GRI-G4  DMA
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Management of production levels

Also in 2013, the economic results achieved throughout the world benefited from the strength of the Group, further consolidated by the geographical diversification of the various business activities.

During the year, the Group positively responded to the performance of some markets through instruments aimed at enhancing flexibility. These market situations also made it possible to transform the majority of fixed-term employment contracts to unlimited contracts.

In Europe, 2013 was characterized by further shrink in demand, which particularly impacted Fiat Group's production capacity in Italy, where work stoppages were necessary. However, the Company has continued its policy for the protection of jobs through the use of temporary social welfare mechanisms, where possible, or other measures based on collective agreements or company policy.

 

Italy

In Italy, recourse to temporary layoff benefits schemes by Group companies to cope with reduced production and restructuring or reorganization initiatives linked to Group investments declined slightly over 2012 (-1.9%). These benefit payment schemes (financed with company contributions) continue to play a significant role in this context; this year, too, they avoided redundancies.

In 2013, the Company continued in the reorganization of production in Italy by leveraging the premium brands, realigning the product portfolio and repositioning the business for the future.

In January, the Avv. Giovanni Agnelli plant was inaugurated in Grugliasco (Turin), which is the production site for the Maserati Quattroporte and the Maserati Ghibli sold all over the world. Fiat has invested more than €1 billion to develop the two new models and refurbish the plant.   

On July, the CEO of Fiat, Sergio Marchionne, presented plans for future activities at the plant of Sevel (a 50/50 JV between

Fiat Group and PSA Group for the production of Light Commercial Vehicles) located in Atessa, Italy, where the Ducato is currently produced. Approximately €700 million is to be invested in the facility over 5 years.

In September, the CEO announced an investment plan for the Mirafiori Plant in Turin, where a production establishment dedicated to the premium segment will be set up.

At the end of October, following receipt of regulatory approvals, Fiat Group Automobiles’ acquisition of the 50% stake in VM Motori S.p.A. held by General Motors was completed. VM is specialized in the production of advanced diesel engines. Its plant located in Cento, in central Italy, employs over 1,000 people.

As announced in late 2012, investment of over €1 billion in the SATA Plant in Melfi (Italy) started in 2013 for the production of the Fiat 500X and a Jeep brand vehicle.

Two major corporate streamlining measures were undertaken during the year in Italy. One was the transfer of the Officine Maserati Grugliasco plant to Fiat Group Automobiles situating it in the Turin-based complex specialized in manufacturing premium brand vehicles. The other involved the transfer of staff and operations from Fabbrica Italia Pomigliano (FIP) to Fiat Group Automobiles. It was prompted by the fact that certain circumstances, organizational and industrial requirements and constraints that led to the formation of a company specifically dedicated to the investment in the new Panda were overcome.   

 

Brazil

In 2013, the positive trend of the automotive market in Latin America continued.

In Brazil, work on the new Pernambuco plant started, as announced on 28 December 2010.  The Group’s new plant is expected to start activities during the first half of 2015 with initial production capacity of 200,000 vehicles per year based on the Small Wide platform which will strengthen the product offering in the mid-size segments of the market. The establishment will also have an on-site supply park, product engineering center and testing facilities.

In 2013, the Group confirmed its leadership on the Brazilian market, despite a slight decrease over the previous year, which had benefited from tax incentives on sales. In 2013, the need to adjust production levels to market trends was primarily addressed through flexible working schemes by managing shifts accordingly, under trade union agreements.

 

North America

As for Chrysler Group, in 2013 the company increased vehicle production at its NAFTA facilities in response to higher product demand. To handle the greater output, the company increased staff, i.e., the number of manufacturing employees to support our current and anticipated production volumes, as well as additional engineering, research and development and other highly skilled employees to support our product development, sales, marketing and other corporate activities.