UAW files complaint against Stellantis for violating terms of 2023 contract
2 min read
Following repeated accusations of rescinding on commitments that were part of the 2023 collective bargaining agreement and for refusing to provide information about plans to move manufacturing out of the U.S., the United Auto Workers Union filed federal labor charges against Stellantis (NYSE:STLA) with the National Labor Relations Board.
To end an unprecedented strike against Detroit’s Big 3 Ford (F), General Motors (GM) and Stellantis (STLA) agreed to UAW terms for significant pay hikes, improved retirement contributions, and for Stellantis (STLA) in particular, a commitment to build the Dodge Durango in Detroit and reopen an idled assembly plant in Belvidere, Illinois.
But plagued by high inventory, declining sales, and a lucrative UAW contract that hiked pay for autoworkers by at least 25%, the company is struggling to trim costs, first through company-wide layoffs, and now with plans to move production of the Durango to Windsor, Canada and keep Belvidere shuttered.
“The Company has informed the Union that it will not launch the Belvidere Consolidated Mopar Mega Hub in 2024, it will not begin stamping operations for the Belvidere Mega Hub in 2025 and it will not begin production of a midsize truck in Belvidere.
The Company’s failure to plan for, fund and launch these programs constitute a violation of the U.S. Investment letter in the P&M and OC&E Collective Bargaining Agreements. During 2023 National Negotiations the parties agreed to the investment plan for Belvidere to address job security concerns impacting bargaining unit members throughout the entire system. The Company’s failure to honor its commitments in the U.S. Investment letter is a serious concern to all bargaining unit members,” the UAW statement said, demanding that Stellantis (STLA) rescind its decision and immediately plan for and fund the reopening of the Belvidere facility. Failure to do so could initiate another strike against the company.
In July, the Biden Administration pledged $334M in federal funding towards reopening the facility, but as of August, the company continues to stall, citing a need to “align market conditions and investments,” and “ensure the company’s future competitiveness and sustainability.”
“Therefore, the company confirms it has notified the UAW that plans for Belvidere will be delayed, but firmly stands by its commitment," Stellantis said in a statement.
Additionally, Stellantis (STLA) rejects claims that it has violated its commitment to the union and the union has no grounds to strike.
“The UAW agreed to language that expressly allows the company to modify product investments and employment levels,” Stellantis said.
The UAW, however, feels otherwise. “We intend to enforce our contract, and make Stellantis keep the promise.”
Shares are fractionally lower in after-hours trading after closing 0.8% higher on Monday.
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