Stellantis could close 18 facilities under UAW deal — here are the full details of its latest offer

DETROIT – The most up-to-date contract proposal by automaker Stellantis to the United Auto Workers union could result in the closure of 18 U.S. facilities, but it surely could additionally carry new investments and repurpose an idled car meeting plant in Illinois, sources accustomed to the discussions informed CNBC.

The plans would doubtless have an effect on hundreds of UAW members, shrink the automaker’s North American footprint and create a brand new “modernized” components and distribution community, which firm and union leaders have been at odds over, the sources stated.

A focus of the plan is feasible closures of 10 “Mopar” components and distribution facilities, which are scattered throughout the nation, to consolidate them into bigger “Amazon-like” distribution facilities, stated the sources, who spoke on the situation of anonymity as a result of the talks are non-public and ongoing. The proposal included a possible “Mega Hub” at Belvidere Assembly, which the automaker indefinitely idled in February.

Three sources stated different manufacturing facilities included in the proposal are Tipton Transmission Plant in Indiana; the partially decommissioned Trenton Engine Complex and the already idled Mount Elliott Tool & Die in Michigan; and the idled Belvidere Assembly. Also included have been a Detroit warehouse, workplace house and the automaker’s North American headquarters and expertise middle, a large 500-acre campus in metro Detroit previously used as Chrysler’s world headquarters.

The final piece of the offer involving its North American headquarters comes as firms alter to remote or hybrid work, and try to realign their bodily footprints following the coronavirus pandemic.

In 2021, Stellantis stated it needed to have a majority of its salaried workers work remotely most of the time, together with the then-17,000 workers in North America. Following these plans, the firm confirmed it was “evaluating how we work to allow our groups to be their most modern, inventive and environment friendly. That evaluation consists of potential changes to our actual property portfolio.” Stellantis stated the facility would “proceed to be our North American headquarters and North America technical middle.”

It’s not assured the facilities would close under a labor deal; nonetheless, Stellantis is required to incorporate potential closures or gross sales of any location the place a UAW member works, an organization supply stated. The Detroit Free Press reported in 2022 that the firm could lease a portion of the headquarters complicated.

The 18 potential closures have been half of a Thursday night time proposal by Stellantis to the union, which launched focused strikes towards the Detroit automakers after contracts expired at 11:59 p.m. on Thursday. Negotiations between Stellantis and the UAW reconvened Monday morning.

Stellantis additionally included its proving grounds in Arizona in the proposal, however stated operations would proceed with any sale, two of the sources stated.

The Belvidere, Illinois plant is one of the largest factors of competition between the automaker and union, which is now on the fourth day of focused strikes at three major assembly plants. The union is hanging one plant every at Stellantis, General Motors and Ford Motor, however has threatened additional work stoppages will happen, relying how negotiations go.

Reopening the Illinois plant can be a serious win for UAW leaders, however they’ve issues about employment, uprooting staff and households, together with pay and automation, in response to two of the sources.

Specifically, they fear new facilities might not make use of as many union members as the meeting vegetation and present components and distribution facilities, they stated. Mopar jobs additionally pay lower than positions at conventional meeting facilities akin to Belvidere, which was producing Jeep Cherokee SUVs up till its idling in February.

The potential closures have been half of Stellantis’ most up-to-date offer offered to the union Thursday night time. Two sources stated the components proposal for Belvidere has been one of a number of discussions concerning the plant, and the offer could change, primarily based on the talks.

Discussions have additionally taken place about utilizing half of Belvidere – an almost 5 million-square-foot facility – for electrical car battery elements, two sources stated.

Stellantis’ North American Chief Operating Officer Mark Stewart, who’s overseeing the UAW talks, stated the firm must “modernize” the Mopar facilities. Without disclosing precise details, he stated these plans would not impact employment.

“We have to make investments into Mopar,” Stewart stated throughout a media roundtable Saturday. “In rather a lot of circumstances, it … would not make sense to make these investments in the location that they are in.”

Stewart, with out disclosing details of the plan, described the firm’s proposal for Belvidere as a “very compelling offer.” However, he stated it was contingent upon the union agreeing to a tentative deal earlier than a strike.

“So we must revisit all of these gadgets, however very compelling resolution for that, which was rejected,” he stated Saturday.

Stellantis’ most up-to-date proposal to the UAW included raises of almost 21% over the course of the contract, together with an instantaneous 10% pay enhance, and would finish wage tiers for some staff along with different bonuses and advantages. Benefits in the proposal are in-line with different provides from GM and Ford.

UAW Vice President Rich Boyer has made it clear that the Belvidere plant is a make-or-break problem. He even inspired a crowd Friday during a rally with U.S. Sen. Bernie Sanders, I-Vt., to chant “bulls***” at the provides of the Detroit automakers.

“I would like the world to listen to this: This is about the working class. This is about the haves and have nots, and we’re drained of not having something,” Boyer, who leads Stellantis negotiations, stated throughout the rally.