DEARBORN — According to sources involved with the negotiations, the most recent contract proposal from carmaker Stellantis to the United Auto Workers union may result in the closure of 18 plants in the United States, but it may also bring in fresh investments and repurpose an Illinois vehicle assembly factory that has been idled.
The proposals, which business and union leaders were at conflict over, would probably have an impact on thousands of UAW members, reduce the automaker’s presence in North America, and develop a new “modernized” components and distribution network.
Employees at the FCA US Conner Avenue assembly factory in Detroit, Michigan, work on a Dodge Viper on the assembly line. (Image courtesy of Jeff Kowalsky/Bloomberg via Getty Images)
According to the sources, who spoke on the condition of anonymity because the negotiations are ongoing and private, a key component of the plan is the potential closure of ten “Mopar” parts and distribution centers that are dispersed across the nation. Instead, they would be combined into larger “Amazon-like” distribution centers. The plan called for a possible “Mega Hub” to be built at Belvidere Assembly, which the carmaker shut down indefinitely in February.
According to three sources, the proposal also mentions the idled Belvidere Assembly, the partially decommissioned Trenton Engine Complex, the Indiana Tipton Transmission Plant, and the Michigan Mount Elliott Tool & Die. The automaker’s North American headquarters and technology center, located on a sizable 500-acre complex in metro Detroit that was originally Chrysler’s global headquarters, were also included.
The last part of the offer, which concerns its North American headquarters, comes as businesses try to realign their physical footprints in the wake of the coronavirus outbreak and adapt to remote or hybrid work.
Stellantis stated its intention to have the bulk of its paid staff—including the then-17,000 workers in North America—work remotely the majority of the time in 2021. Following the implementation of those strategies, the business acknowledged that it was “examining how we operate to allow our staff to be their most inventive, creative, and effective. Our real estate portfolio may need to be adjusted as a result of that examination. Stellantis stated that the building will “continue to be our North American headquarters and North America technical center.”
Continuing the story
Although it’s not certain that the plants will close as part of a labor agreement, a corporate source said Stellantis is expected to take into account any prospective closures or sales of any locations where UAW members are employed. The corporation could be able to lease a piece of the headquarters facility, according to a 2022 article in The Detroit Free Press.
The union, which began targeted strikes against the Detroit automakers when contracts expired at 11:59 p.m. on Thursday, was presented with a plan by Stellantis on Thursday night that included the 18 potential closures. Stellantis and the UAW resumed their negotiations early on Monday.
According to two of the people, Stellantis also included its Arizona proving grounds in the bid but stated that operations would continue with any transaction.
One of the main issues between the carmaker and the union, which is now on the fourth day of planned strikes at three significant assembly sites, is the Belvidere, Illinois facility.The union has threatened future work stoppages, depending on how discussions proceed, but is only striking one factory at each of Stellantis, General Motors, and Ford Motor.
Although the reopening of the Illinois facility would be a huge victory for UAW officials, they are worried about jobs, relocating families and employees, compensation, and automation, according to two of the individuals.
They expressed concern that the number of union members employed by future facilities may be lower than that of the assembly plants and present components and distribution operations. Jobs at Mopar are also less lucrative than those at conventional assembly plants like Belvidere, which until its shutdown in February produced Jeep Cherokee SUVs.
The most recent offer Stellantis made to the union on Thursday night included the prospective closures. According to two sources, there have been various discussions about the facility, including the components proposal for Belvidere, and the offer may change as a result of these discussions.
According to two individuals, there have also been discussions of repurposing a portion of Belvidere, a nearly 5 million-square-foot plant, for electric car battery components.
The firm has to “modernize” the Mopar plants, according to Mark Stewart, Chief Operating Officer of Stellantis North America, who is in charge of the UAW negotiations. He stated the measures will not have an impact on employment but did not go into specifics.
During a Saturday media roundtable, Stewart stated, “We need to make investments into Mopar.” Making those investments in the area they are in “in many cases doesn’t make sense.”
Without going into specifics, Stewart called the company’s bid for Belvidere a “very compelling offer.” But he said that it was dependent on the union approving a provisional agreement prior to a strike.
He explained on Saturday that “we will have to revisit all of those items, but there was a very compelling solution for that, which was rejected.”
In addition to additional incentives and perks, Stellantis’ most recent proposal to the UAW contained raises of roughly 21% over the duration of the contract, including an immediate 10% pay rise, and would remove wage tiers for some workers. The proposal’s benefits are comparable to those in recent proposals from GM and Ford.
Rich Boyer, vice president of the UAW, has said categorically that the Belvidere factory is a make-or-break situation. At a rally with U.S. Sen. Bernie Sanders, I-VT, on Friday, he even urged the crowd to yell “bulls***” in response to the concessions made by the Detroit automakers.
“This is about the working class, and I want the entire world to know it. Boyer, who oversees Stellantis talks, addressed the crowd during the demonstration and said, “This is about the haves and have nots, and we’re weary of not having anything.
According to two sources, the company’s current proposal would create new Mopar operations in Fishkill, New York, and Macon, Georgia, as well as transfer work from a number of sites in Michigan to its Trenton North factory, which is situated southwest of Detroit.
Mopar’s plants in Atlanta, Boston, Centerline Warehouse & Packaging, Chicago, Marysville, Milwaukee, New York, Orlando, Sherwood, and Warren will all be closing.
Almost a century ago, the motor and component company Mopar was created. More than 2,000 people are currently employed by Stellantis in the firm, which it claims includes 20 U.S. Mopar parts and distribution sites.
For Stellantis’ predecessor, Fiat Chrysler, which created a growth strategy for the personnel and facilities, Mopar was anticipated to be a significant growth sector. However, the locations were set up before Amazon made a significant push for massive distribution centers, which has altered how many of them conduct business.
The abolition of pay scales within the Mopar division is another aspect of Stellantis’ plan.The hourly compensation for such workers presently ranges from roughly $17 to more than $30.The four-year agreement is also accompanied by a ban on selling or spinning off the Mopar business.
We’re attempting to come up with original answers for each of those and are taking it seriously and responsibly. We have heard and will keep listening. We are still engaging in sincere negotiations, Stewart added. “It really is a win-win situation. It’s not about fighting, you know.”
The original version of this item appeared on NBCNews.com.