In an ongoing exchange of words and legal actions, Stellantis has filed numerous lawsuits against the UAW and issued a pointed response to a UAW rally against the company.
Stellantis lawsuits
On October 3, Stellantis filed a lawsuit against the UAW and UAW Local 230, representing the Los Angeles Parts Distribution Center according to a press release.
On October 4, the company filed eight additional lawsuits against the UAW and 23 local unions. These developments led to a meeting with the UAW on Saturday, where the union proposed the reinstatement of the Jobs Bank, a concept previously associated with the automaker’s 2009 bankruptcy.
The Jobs Bank, initially introduced by General Motors in the mid-1980s and later adopted by Ford and Chrysler, restricted the automakers from laying off employees. By the early 2000s, Chrysler had more than 2,000 employees in the Jobs Bank, which resulted in significant costs, as these employees remained on active payroll without performing production work.
The current UAW proposal suggests a similar approach, which would not only apply to employees in Belvidere but also to approximately 900 employees who transferred from Belvidere to other locations.
Stellantis declined the proposal, citing concerns that it would revert to pre-bankruptcy terms and conditions that could affect the company’s long-term stability. The company emphasized that while the situation is challenging for Belvidere employees, it had agreed during the 2023 negotiations to place these workers on temporary layoffs, ensuring they receive 74% of their pay and full healthcare benefits.
Stellantis reiterated that its plans for the Belvidere facility have been delayed, not canceled. However, the company expressed its reluctance to reinstate provisions it believes contributed to past financial challenges faced by two of the “Big Three” automakers.
Additionally, Stellantis stated that any strike initiated by the UAW would be considered unlawful, referencing the language in Investment Letter 311. The company argued that decisions regarding market protection and slowing EV adoption are not subject to dispute.
If necessary, Stellantis intends to pursue litigation and hold the UAW and its local unions accountable for potential financial losses, which could reach tens of millions of dollars per day, along with other damages related to production delays due to a strike.
The company remains open to continued discussions with the UAW to address these issues in the best interests of its employees.
Counters UAW claims
In a pointed response to a rally at the Sterling Stamping Plant, Stellantis counters the UAW claims:
Fact: Letter 311, the Investment Letter, in the 2023 collective bargaining agreement, which was negotiated and ratified by UAW members, clearly states that all planned investments are subject to business factor contingencies including market conditions and consumer demand, and company approval. The investments and timelines are not absolute guarantees.
Fact: There is indisputable volatility in the market, especially as the industry transitions to an electrified future. Over the past year, numerous companies across the industry have announced investment and product delays as well as outright product cancelations. This is information that the company has repeatedly shared with the UAW and that they have acknowledged. The evidence of a dramatic transformation in the industry and its effects on the market is clear.
Fact: The company confirmed a delay – not a cancellation, as Fain recently suggested – of the plans for the Belvidere plant allocations. This decision is consistent with the current challenging automotive landscape and the plain language of Letter 311. The company remains committed to investing in the U.S. to create jobs and support our communities.
Fact: Because of the delay in the Belvidere plant allocations, the company has presented the UAW with a nearer term alternative for the Mega Hub that would mean more favorable employment options for many UAW-represented employees even though it would require more investment by the company.
Fact: The UAW does not have the legal right to strike via pending grievances over investment decisions the Company is making based on the business factor contingencies in Letter 311. Because the UAW’s grievances ignore those contingencies, which are clearly established in the 2023 agreement that was negotiated and ratified by UAW members, they are invalid in the Company’s view.
Fact: A strike right now has the potential to further weaken the company at a critical time.
“Let me be crystal clear, we have abided by and will continue to abide by the 2023 collective bargaining agreement,” said Carlos Zarlenga, COO, Stellantis North America. “It is in everyone’s best interest to have a healthy company that can compete in a global marketplace. This is a time for us to work together, not against each other.”
The bottom line
The ongoing drama between the UAW and Stellantis could mean future product delays and months of arbitration making it difficult for customers, dealerships and communities that rely on the sales of vehicles. Hopefully this gets resolved quickly.
