Tensions are rising between Stellantis, the parent company of Chrysler, and the United Auto Workers (UAW) union. The UAW, led by President Shawn Fain, has accused Stellantis of breaking promises made to workers in a 2023 agreement. Fain, in a Facebook Live video, claimed that several local UAW chapters are preparing to strike due to Stellantis’ alleged failure to keep its commitments.
The UAW’s main concerns are centered around the production of the Dodge Durango SUV and the reopening of the idled Belvidere assembly plant in Illinois. The union alleges that Stellantis is planning to move Durango production outside of the U.S. and is not committed to reopening Belvidere, despite earlier assurances.
Stellantis, however, vehemently denies these allegations. In an email to Fain, Stellantis North America COO Carlos Zarlenga stated that the company is adhering to the 2023 agreement. Stellantis acknowledged that the timelines and investment promises made during the negotiations were not absolute guarantees and were dependent on factors such as market conditions.
The company emphasized the volatility of the auto industry, particularly as it transitions towards an electrified future. Stellantis pointed out that several investments and product launches across the industry have been canceled over the past year due to these market challenges. The company also clarified that no official announcement regarding the production allocation of the next generation Dodge Durango has been made and that the decision to delay the reopening of the Belvidere plant is due to the current challenging automotive landscape.
The dispute comes amidst a backdrop of declining profitability for Stellantis. The company reported a 48% drop in net profit for the first half of 2024, with CEO Carlos Tavares acknowledging the “disappointing and humbling” performance. Tavares attributed this decline to a challenging industry context and operational issues, particularly in North America.
The UAW’s allegations and the potential strike threat highlight the growing challenges facing the auto industry as it navigates a complex and evolving landscape. The dispute between Stellantis and the UAW is likely to continue, with potential implications for the future of labor relations and production decisions within the industry.
