The UAW-Stellantis deal includes $18.9 billion in new investments

The UAW-Stellantis deal includes $18.9 billion in new investments

  • Stellantis, Chrysler’s parent company, plans to invest $18.9 billion in the United States by April 2028, the United Auto Workers union said.
  • The 4 1/2-year interim agreement must still be ratified by the roughly 43,000 UAW members covered by the deal at Stellantis.
  • The deal was reached after nearly six weeks of targeted labor strikes organized by the union against Stellantis, General Motors and Ford Motor Co.

Randy Harvard (right), a 29-year-old auto worker, stands with other members of the United Auto Workers after the union called a strike for Oct. 23, 2023 at Stellantis’ Ram 1500 plant in Sterling Heights, Michigan.

Michael Wayland/CNBC

DETROIT – Stellantis, Chrysler’s parent company, plans to invest $18.9 billion in the United States by April 2028, including $1.5 billion to produce new midsize pickup trucks at a mothballed plant in Belvidere, Illinois, the United Auto Workers union said.

The investments are expected to be completed within the 4 1/2-year term of the initial agreement, which still must be ratified by the approximately 43,000 UAW members covered by Stellantis’ proposed contract.

Details of the tentative agreement were released Thursday night after local UAW leaders approved the agreement, which UAW President Sean Fine called “the most lucrative contract our union has won in decades.”

The tentative labor agreement was reached Saturday after nearly six weeks of targeted strikes organized by the union against Stellantis, General Motors and Ford Motor Co. The work stoppages began on September 15 after the two sides failed to reach deals covering the UAW’s 146,000 members with automakers by the strike deadline.

“For the first time in a long time, we did the unthinkable: we reopened a factory,” Fine said during a webcast on Thursday, referring to the Belvedere plant, which was idled in February 2022. “By begging the company or agreeing to work terrible hours, take a pay cut, or continue the race to the bottom. We didn’t do that by giving back. We did that by giving back.”

Before the talks began, UAW Vice President Rich Boyer, who led the Stellantis talks, made product commitments a priority and stressed that the Belvidere plant was a watershed issue.

The details announced Thursday include $8.1 billion in product commitments union negotiators obtained from Stellantis, the UAW said.

UAW Vice President Rich Boyer addresses union members during the “Solidarity Sunday” rally on August 20, 2023 in Warren, Michigan.

Michael Wayland/CNBC

In addition to Belvedere, other planned investments include $1.5 billion each for the Dodge-Jeep plant in Detroit and the Jeep complex in Ohio; $1.4 billion Ram plant in Sterling Heights, Michigan; and $600 million for Stellantis’ Warren Truck plant in suburban Detroit.

The company also plans to invest $3.2 billion in a new joint-venture battery factory in Belvidere scheduled to open in 2028, the association said. The deal also lists previously announced battery investments of $6.2 billion for two battery facilities in a joint venture in Kokomo, Indiana. .

UAW members at the battery plant in Belvidere will be represented by the union through the company that is leasing employees to the joint venture, Fine said. It is unclear whether the already announced factories will be subject to the same conditions. A UAW spokesman did not immediately comment after details of the agreement were announced.

A Stellantis spokeswoman declined to comment on the union’s announcements.

The UAW said negotiators also secured a car rental program for employees that mirrored the company’s management program. They said it includes discounted rates, unlimited miles, insurance, maintenance and repairs.

Like the UAW’s initial agreement with Ford, the deal includes significant wage increases, bonuses and other enhanced benefits for auto workers such as profit-sharing payments and a $5,000 endorsement bonus.

The 25% increases include an 11% increase upon ratification, followed by a 3% increase in the next three years and then a 5% increase in September 2027.

UAW members at Ford have already begun voting on that tentative agreement: 82% of workers at Ford’s Michigan assembly plant voted in favor of the agreement this week. The suburban Detroit plant was among the first to be struck along with other General Motors and Stellantis assembly plants.

UAW members, along with Stellantis and GM, are expected to vote on the deals within the next two weeks. A simple majority is needed to ratify deals.

(tags for translation) Breaking News: Business

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