Stellantis Faces Delays Amid Union Tensions Over Belvidere Investments

Stellantis delayed its planned investments in Belvidere, Illinois, but maintains it's committed, despite United Auto Workers' threats of a nationwide strike over unmet production promises. The automaker insists these delays are essential for future competitiveness. The U.S. Department of Energy's financial awards for Stellantis are also under negotiation.

Stellantis announced on Tuesday that its planned investments in Belvidere, Illinois, will face delays but reaffirmed its dedication to the project, asserting no breach of its union contract. The announcement comes amid threats from the United Auto Workers (UAW) union to file grievances and potentially launch a nationwide strike, claiming the company is failing to honor production commitments.

The automaker, parent company of Chrysler, stated it had informed UAW of the delays and emphasized the necessity of the new timetable for maintaining the company's competitiveness and sustainability, key to preserving U.S. manufacturing jobs. The UAW has yet to comment on Stellantis' statements.

In November, Stellantis committed to building a $3.2 billion battery plant, investing $1.5 billion in Belvidere for mid-size truck production by 2027, and establishing a $100 million parts distribution center by 2024. The overall deal involves $18 billion in new investments and promises to create 5,000 U.S. jobs by 2028, according to UAW.

UAW President Shawn Fain underscored the issue during remarks at the Democratic National Convention, asserting that Stellantis must honor its promises and that the UAW would take necessary action to hold corporate America accountable. Stellantis, however, denies any violation of commitments and rejects the union's accusations.

Additionally, the U.S. Department of Energy's contemplation of awarding Stellantis $334.8 million to convert the Belvidere plant for electric vehicle production, along with $250 million for transforming the Indiana Transmission Plant, remains under negotiation and subject to cancellation. This month, Stellantis announced plans to lay off 2,450 workers from its Warren Truck assembly plant near Detroit as it ends Ram 1500 Classic truck production.

(With inputs from agencies.)