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, nevertheless it could additionally deliver new investments and repurpose an idled car meeting plant in Illinois, sources accustomed to the discussions informed CNBC.

The plans would seemingly have an effect on 1000’s 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 had 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 personal 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 had been a Detroit warehouse, workplace area 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 corporations modify to remote or hybrid work, and try and realign their bodily footprints following the coronavirus pandemic.

In 2021, Stellantis stated it wished to have a majority of its salaried staff work remotely most of the time, together with the then-17,000 staff in North America. Following these plans, the firm confirmed it was “evaluating how we work to allow our groups to be their most progressive, artistic 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 had been half of a Thursday evening proposal by Stellantis to the union, which launched focused strikes in opposition to 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 rivalry between the automaker and union, which is now on the fourth day of focused strikes at three major assembly plants. The union is placing 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 keeping with two of the sources.

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

Two sources stated the components proposal for Belvidere has been one of a number of discussions concerning the plant, and the offer could change, based mostly on the talks.

Discussions have additionally taken place about utilizing half of Belvidere – a virtually 5 million-square-foot facility – for electrical car battery parts, 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 must make investments into Mopar,” Stewart stated throughout a media roundtable Saturday. “In rather a lot of circumstances, it … does 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 should revisit all of these objects, 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 improve, and would finish wage tiers for some staff along with different bonuses and advantages. Benefits in the proposal are in-line with different gives 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 gives 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.