CNH Industrial’s business is, by nature, labor intensive and this is reflected in the high number of hourly employees the Company employs. A large number of hourly employees are based in European countries and Italy in particular, where almost 26% of the total employees are based.
The following tables show the breakdown of the number of employees by Segment and by Region at December 31, 2013 and 2012:
|Agricultural and Construction Equipment||35,605||33,826|
|Trucks and Commercial Vehicles||27,246||26,307|
As of December 31, 2013, CNH Industrial had 71,192 employees, an increase of 2,935 over the 68,257 figure at year- end 2012. The change was partially attributable to the difference between new hires (approximately 8,800) and departures (approximately 7,000) during the year. An increase of around 1,100 employees was due to changes to the scope of the operations: an increase of approximately 300 employees was attributable to the acquisitions of certain Trucks and Commercial Vehicles dealership activities in Romania, Portugal and the UK, while about 800 employees were added due to the insourcing of certain manufacturing logistics activities in the plant of Sete Lagoas, Brazil. The remaining increase over year-end 2012 was mainly attributable to a growth in permanent and fixed term workers for manufacturing activities, mainly in Latin America, associated with higher production levels for Agricultural Equipment and Trucks and Commercial Vehicles. Other minor increases included net new hiring for R&D, brand/commercial organizations and various functions in emerging markets.
One of CNH industrial’s key challenges is the need to grow and adapt to a constantly changing environment. The company realizes that the nature of today’s socioeconomic context calls for leaders with the ability to evolve. A solid people management process is the key to success, as it includes employees in the company’s business goals, takes advantage of employee talent and fuels workforce motivation. CNH Industrial is committed to supporting its employees with training initiatives and recognizing and rewarding their achievements and contribution to business results. In this manner, the Company not only gauges itself against today’s expected levels of global competitiveness, but also gains insight into potential improvements and succession plans that are essential for the future. In 2013 CNH Industrial spent approximately €9 million in employees training.
As stated in CNH Industrial's Code of Conduct, occupational health and safety is an employee's fundamental right and a key part of the Company's sustainability model. Safety management engages all employees in creating a culture of accident prevention and risk awareness, sharing common occupational health and safety ethical principles to achieve improvement targets. One of the initiatives developed by CNH Industrial is an effective health and safety management system which conforms to OHSAS 18001 standards. As demonstration of its commitment in this area, 53 plants around the world are OHSAS 18001 certified and more than 49,000 people are involved. In 2013, over €128 million was spent on improving health and safety protection, about 32% more than in 2012. To achieve the challenging targets that the Company has set, all employees are involved in informational activities and in classrooms and hands-on training consistent with their roles and responsibilities. CNH Industrial provided over 386,000 hours of training on occupational health and safety in 2013, about 45.8% more than in 2012. More than 50,000 employees were engaged in training activities, 37,000 of whom were hourly. Owing to the Company’s many initiatives, the overall frequency rate in 2013 was 0.28 injuries per 100,000 hours worked, a 24% drop compared to the previous year.
During 2013 CNH Industrial main objective remained to realize our full potential by operating as a single group within the global industrial capital goods marketplace. Management established a strong foundation for the creation of CNH Industrial as one of the largest and most geographically diverse industrial capital goods companies in the world.
The Group Executive Council (“GEC”): the GEC is an operational decision-making body of the CNH Industrial Group, which is responsible for reviewing the operating performance of the businesses, and making decisions on certain operational matters. It consists of four main areas, operating units, brands, industrial and commercial and support and corporate functions.
After reviewing the operations and performance of each Region and Brand, in September CNH Industrial announced the new position of COO for Commercial Vehicles business, in order to provide a single point of full-time leadership to all the operational facets of the business. In addition, the Defence and Firefighting Specialty Businesses will be led by a new leader as part of the Group’s intentions of turning these businesses into global product lines.
These changes were reinforcing the Brand and Regional structure announced in November 2012.
Management of production levels
In 2013, CNH Industrial continued to work with trade unions and employee representatives to reach consensus-based solutions for managing market conditions, varied by business segment and market.
During the year, several countries in EMEA were affected by plant stoppages, necessary to address fluctuations in production volumes. In Italy, compared to 2012, Powertrain and New Holland Construction Machinery carried out more temporary layoffs during the year, the other Agricultural and Construction Equipment plants made no use of this mechanism, while the Iveco brand (excluding the stoppages due to the re-organization in Suzzara Plant, aimed at preparing the plant for the launch of the New Daily in 2014) made a slightly lower use of temporary layoffs. In France, production stoppages through temporary layoff benefit schemes decreased compared to 2012, while such stoppages increased in Germany at the Magirus plant in Ulm due to the suspension of operations during reorganization to accommodate the transfer of firefighting production from other plants. In Spain, at Valladolid plant, the utilization of temporary layoffs remained almost unchanged compared to the previous year, while temporary layoffs ceased altogether at Madrid Plant due to the transfer of production from Ulm. Meanwhile, flexible work-time agreements were applied to meet fluctuations in production requirements Agricultural Equipment plants in Belgium and Poland. In North America, the continued strength of the agricultural segment mitigated a slightly weaker performance in the Construction Equipment business. The result was a moderately favorable impact on employment levels, and overtime continued at similar levels to the previous year. In Brazil, the business environment improved, particularly for the agricultural segment, due to increased demand. In the Group’s Curitiba and Sorocaba plants, there was extensive use of temporary contract workers, while, in other CNH Industrial plants, companies made use of overtime in response to the increases in production volumes in addition to increasing the headcount.
Restructuring and reorganization
At the Imola plant (Italy), April 30, 2013 marked the end of two years of extraordinary temporary layoff benefits, granted after the business closure on May 1, 2011. The 45 workers still employed at the end of April were dismissed after receiving a severance payment and being entitled to “mobilità” (a government benefit scheme payable to employees affected by collective redundancies) for up to three years.
The Calhoun, Georgia (United States) plant restructured its workforce, impacting a total of approximately 60 employees in two different restructuring events over the course of the year. An additional 25 employees will be impacted as part of a recently announced third restructuring in early 2014. The plant complied with all federal and state notification laws, and provided severance payments, benefit continuation, and other assistance consistent with company policies applicable to non-union represented employees.
Suzzara plant (Italy), for 12 months beginning August 2013, will use special temporary layoff schemes to aid the renewal of the plant’s technical installations, production equipment and assembly, and the definition of new logistics flows in preparation for the launch of the new “Daily,” the light range vehicle manufactured by Trucks and Commercial Vehicles.
The main wage and regulatory agreements signed in 2013 at the company/plant level include: the renewal of the section dealing with pay-related aspects of the Collective Labor Agreement (“CLA”) applied in Italy to all CNH Industrial companies, setting the minimum level of pay still higher than the corresponding minimum set by the National Collective Labor Agreement for the Metal Industry; collective bargaining on wage and labor regulation, with a four-year duration, concluded in Spain for the plants of Madrid and Valladolid, recognizing a lump-sum payment in 2013, structural pay increases together with a variable payment for successive years, and also new flexible working time provisions; the agreements reached through the annual negotiations in France, which resulted in salary increases varying from 0.8% up to a maximum of 2% depending on business results; the agreement signed in Czech Republic, which provides wage increases, higher than inflation, due to country specificities and positive business results; agreements in Brazil envisaging pay increases that are linked to growth in that domestic economy in line with salary increases within the country’s Industrial sector, and further agreement on one-off bonuses.
It has to be noted that in United States, unions represent a small portion of CNH Industrial production and maintenance employees. The collective bargaining agreement with the UAW, which represents approximately 1,460 of the hourly production and maintenance employees, continues through April 2016. The CLA with the International Association of Machinists, which represents approximately 740 of CNH Industrial employees in Fargo, North Dakota, expires in April 2018.
In Europe most employees are covered by CLAs stipulated either at the company level or by the employer association for the specific industry, to which CNH Industrial companies belong. In some cases, the CLAs in the same country, stipulated at the extra Company level, differ by territory.
The overall level of labor unrest in the year was negligible.