UAW reaches tentative deal with Stellantis, following Ford
By Neal E. Boudette
The United Auto Workers union announced over the weekend that it had reached a tentative agreement on a new labor contract with Stellantis, the parent company of Chrysler, Jeep and Ram.
The agreement came three days after the union and Ford Motor announced a tentative agreement on a new contract. The two deals contain many of the same or similar terms, including a 25% general wage increase for UAW members as well as the possibility for cost-of-living wage adjustments if inflation flares.
“We have won a record-breaking contract,” UAW President Shawn Fain said in a video posted on Facebook. “We truly believe we got every penny possible out of the company.”
Shortly after announcing the tentative agreement with Stellantis, the union expanded its strike against General Motors, calling on workers to walk off the job at the company’s plant in Spring Hill, Tennessee. The plant makes SUVs for GM’s Cadillac and GMC divisions.
Under the tentative contract with Stellantis, Fain said, the company has agreed to reopen a plant in Belvidere, Illinois, to produce a midsize pickup truck and to rehire enough workers to staff two shifts of production.
The union also won commitments to keep an engine plant in Trenton, Michigan, open and to keep and expand a machining plant in Toledo, Ohio. According to the union, these moves will create up to 5,000 new UAW jobs.
The union also won the right to strike if the company closes any plant and if it fails to follow through on its promised investment plans, Fain said.
“If the company goes back on their words on any plant, we can strike the hell out of them,” he said.
Fain said Stellantis workers would now return to their jobs.
In a statement, Stellantis said, “We look forward to welcoming our 43,000 employees back to work and resuming operations to serve our customers.”
The tentative agreement with Stellantis will require approval by a union council that oversees negotiations with the company, and then ratification by UAW members. The council will meet Thursday, Fain said.
The deal with Stellantis means that only General Motors had not yet reached an agreement with the union.
Erik Gordon, a business professor at the University of Michigan who follows the auto industry, said the new contracts impose higher labor costs on the Detroit manufacturers as they are ramping up production of electric vehicles and are competing with rivals who operate nonunion plants.
“The Detroit Three enter a new, dangerous era,” he said. “They have to figure out how to transition to EVs and do it with a cost structure that puts them at a disadvantage with global competitors.”
The union’s contracts with the three automakers expired Sept. 15. Since then, the union has called on more than 45,000 autoworkers at the three companies to walk off the job at factories and at 38 spare-parts warehouses across the country.
The most recent escalation of the strike at Stellantis came last Monday when the UAW told workers to go on strike at a Ram plant in Sterling Heights, Michigan, that makes the popular 1500 pickup truck. The strike has halted the production of Jeep Wranglers and Jeep Gladiators at a plant in Toledo, Ohio, and 20 Stellantis parts warehouses.
For decades, the union has negotiated similar contracts with all three automakers, a method known as pattern bargaining. Like the contract it hammered out with Ford, the tentative Stellantis deal would lift the top UAW wage from $32 an hour to more than $40 over 4 1/2 years. That would allow employees working 40 hours a week to earn about $84,000 a year.
Stellantis, GM and Ford began negotiating with the UAW in July. The companies have sought to limit increases in labor costs because they have higher labor costs than automakers such as Tesla, Toyota and Honda that operate nonunion plants in the United States.
The three large U.S. automakers are also trying to control costs while investing tens of billions of dollars to develop new electric vehicles, build battery plants and retool factories.
Stellantis, which is based in Amsterdam, was created in 2021 by the merger of Fiat Chrysler and Peugeot, the French automaker. The company’s North American business, based near Detroit, is its most profitable.
Stellantis surprised analysts recently by posting much stronger profits than GM, which is the largest U.S. automaker by sales. Stellantis earned 11 billion euros ($11.6 billion) in the first half of the year while GM made nearly $5 billion.