Stellantis is again squaring off with the United Auto Workers in a critical battle over the company’s efforts to trim costs and cut production, charging in a lawsuit the UAW is violating its contract with the company by filing what its lawyers describe as sham grievances.
The Belvidere Assembly Plant was closed earlier last year. The UAW’s current contract calls on Stellantis to reopen the factory.
Tensions between Stellantis and the United Auto Workers continue to intensify. The union threatens to strike over what it says is the company’s failure to honor a commitment made in a new national contract signed last year.
The UAW is moving ahead with plans to hold strike votes at key locals in Detroit and other parts of the U.S. The votes are intended to pressure the company to change course and honor the commitment Stellantis made following last year’s strike to re-open an assembly plant in Belvidere, Illinois.
For its part, the Euro-American automaker is countering with a lawsuit in a bid to challenge the UAW’s right to strike.
The labor unrest serves to underscore the myriad woes, hobbling the automaker, which has seen its sales in the U.S. tumble and profit margins squeezed by hefty inventories of unsold vehicles.
Stellantis files suit
Stellantis wants to block a threatened strike by the UAW.
The automaker has filed a lawsuit in federal court in California, claiming the UAW is breaching its contractual agreement by threatening to strike over what Stellantis terms “sham grievances.” The UAW has accused the company of reneging on commitments made in a contract that ended a 40-day strike last autumn.
Stellantis maintains a contract clause called Letter 311 allows the company to adjust investment plans based on market conditions, like consumer demand and plant performance. Stellantis operations in North America have recently cut production shifts at a truck plant in Warren, Michigan and slowed production at plants in Detroit and Toledo, Ohio, while laying off temporary employees.
Stellantis also has delayed any new investment, but not ruled out money for retooling the Belvidere plant.
UAW fights back
UAW President Shawn Fain is ready to implement hard-line tactics in the union’s dispute with Stellantis.
The UAW has described the lawsuit has “frivolous.”
It was filed the day after a UAW Local in Ontario, California became the first to approve a new strike against Stellantis, which saw its U.S. sales drop by 20% during the third quarter.
UAW locals began filing grievances against the company in August. The locals have charged Stellantis with violating product and investment commitments in the current contract. As the grievances proceed, more UAW locals at Stellantis could be holding strike authorization votes soon, according to the union.
The UAW has described the lawsuit as “frivolous.”
In the UAW’s 2023 contract, the union won $19 billion in investment commitments, securing a future for tens-of-thousands of good union jobs in the United States. The UAW also made history by winning the right to strike if the company fails to fulfill those commitments.
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Contract favors union, UAW says
Stellantis CEO Carlos Tavares is coming under increasing pressure as sales and earnings tumble and the automaker faces a new strike threat.
“Stellantis made a contractual promise to invest in America and we are not going to let them weasel out of it,” said UAW President Shawn Fain. “Our members won those investments during the Stand-Up strike, and we will strike again to make Stellantis keep the promise if we have to.”
Stellantis, which has said it needs to reduce costs, has put forward investment plans equal to only about 2% of the $19 billion in commitments contained in the contract and is now publicly backtracking on plans to reopen the idled assembly plant in Belvidere, Illinois. It has also backed away from plans to build the Dodge Durango in Detroit, according to the union.
“If Stellantis can give CEO Carlos Tavares a 56% raise and spend billions lavishing rich shareholders with stock buybacks and dividends, then they sure as hell have the money for productive investments in our plants,” said Fain.
Robocalls used in campaign to defeat strike votes
Meanwhile, Stellantis is attempting to go over the heads of the UAW’s leadership by persuading workers not to approve the strike authorizations sought by Fain.
According to the union, the company is using robocalls to reach out to workers directly. It claims that amounts to an effort to intervene in the union’s constitutional strike authorization process. The overwhelming “yes” vote at the California parts center shows members are ready to fight and that Stellantis’ campaign is backfiring.
“Carlos Tavares is being sued by suppliers and shareholders, the national dealer network is up in arms against him, and he is now facing down a strike from the mighty UAW. If an autoworker in the plant did as piss-poor of a job as Tavares, they would be fired. It’s time for Stellantis to shitcan Carlos!” Fain noted.
Changing of the guard at Stellantis
The dispute with the UAW is unfolding as the automaker faces a crisis in leadership and future direction.
Tavares, who admitted earlier this year his “arrogance” had contributed to the company’s problems, has confirmed he is now preparing a succession plan, and suggests he could step aside by early 2026. He also said he could shutter some of the company’s thirteen brands, placing the future of historic marques such as Dodge and Chrysler in potential danger.
Meanwhile, like other European, North American, and Asian carmakers, Stellantis is facing competitive challenges from rising Chinese companies, which are on the verge of becoming global powerhouses.
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