According to confidential sources, automaker Stellantis has presented a contract proposal to the United Auto Workers (UAW) union that could result in the closure of 18 facilities in the United States. However, the proposal also includes potential investments and the reutilization of an idled vehicle assembly plant in Illinois. The sources disclosed that the plan would impact thousands of UAW members, decrease Stellantis’ North American presence, and establish a new, modernized parts and distribution network, which has caused disagreement between company and union leaders.
One significant aspect of the plan involves the consolidation of 10 “Mopar” parts and distribution centers into larger, Amazon-like distribution centers. These Mopar centers are currently located throughout the country. The proposal also includes the possible closure of several manufacturing facilities, including the Tipton Transmission Plant in Indiana, the partially decommissioned Trenton Engine Complex, the already idled Mount Elliott Tool & Die in Michigan, the idled Belvidere Assembly, a Detroit warehouse, office space, and Stellantis’ North American headquarters and technology center in metro Detroit.
The inclusion of the North American headquarters in the proposal reflects Stellantis’ response to the shift towards remote or hybrid work arrangements due to the impact of the pandemic. In 2021, the company announced plans for a majority of salaried employees to work remotely, and it confirmed that it was assessing its real estate portfolio. Stellantis stated that the headquarters and technology center would continue to serve as its North American headquarters, emphasizing the need to align their physical footprint with new work arrangements.
The closure of the facilities mentioned in the proposal is not guaranteed, but Stellantis is legally obligated to include potential closures or sales in any location where a UAW member is employed. One potential option is for the company to lease a portion of the headquarters complex. The proposal was presented to the UAW on Thursday night, and negotiations between the two parties resume this week.
One of the primary points of contention is the Belvidere Assembly plant in Illinois, which has been the target of strikes by the UAW. Reopening the plant is a crucial demand for the union, but concerns about employment, worker displacement, wages, and automation have been raised. The union fears that the proposed new facilities may not employ as many union members as the assembly plant and the current parts and distribution centers.
If the agreement is reached, Stellantis’ proposal includes significant raises for workers, the elimination of wage tiers within the Mopar division, and a moratorium on selling or spinning off Mopar operations during the contract term. Both Stellantis and UAW leaders have expressed the desire to find common ground and reach a mutually beneficial agreement as soon as possible.
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