UAW-Stellantis deal has $18.9B in investments, including new EVs, battery plants
The United Auto Workers moved one step closer Thursday to putting a six-week-long auto strike behind it by unveiling highlights of its tentative agreement with Stellantis NV — even as union leaders again signaled that their focus is on even bigger wins four-and-a-half years from now when contracts with the Detroit automakers would expire.
UAW President Shawn Fain and Vice President Rich Boyer, head of the union's Stellantis department, shared highlights of the deal with the Jeep, Ram and Dodge maker during a livestreamed event Thursday night. They touted nearly $19 billion in product investments, including investments in battery plants and at an idled Jeep Cherokee plant in Belvidere, Illinois; economic improvements in line with what Ford Motor Co. workers secured; and contract language to help workers transition to an electrified future, among other things.
The deals include 27% in compounded base wage increases, cost-of-living adjustments, a shorter timeline to the top wage, rollover commitments for temporary/supplemental workers and a pathway for employees at future battery plants to become unionized under the union's master agreement with the companies.
“This is the most lucrative contract our union has won in decades," Fain said. "These contracts are so good, even nonunion autoworkers are getting a raise. Terrified auto executives across the country are rushing to give their own employees raises in hopes of fending off the UAW.”
Stellantis declined to comment.
'UAW bump'
“They went far beyond what virtually any observer predicted,” said Harley Shaiken, a University of California-Berkeley professor who specializes in labor and formerly worked as a GM apprentice and briefly as a UAW consultant. “They define major gains for UAW workers. Historically, auto contracts have been a benchmark for other unions and set a standard. For nonunion workers and in the private sector, they are going to raise wages in many industries to avoid unions.”
That has already begun: Toyota Motor Corp. this week said it was increasing wages at its plants and decreasing the grow-in to the top wage to four years, down from eight.
“We’re at a moment where labor is in the spotlight,” Shaiken said. “I don’t think it is a temporary moment. The gains are real. Many nonunion workers are realizing the benefits that unions bring.”
Read the UAW-Stellantis agreement highlighter here
Fain pointed to Toyota's moves as evidence of the UAW's newfound impact, calling the raises the "UAW bump."
“This week, Toyota said they are giving across-the-board pay increases to production workers and skilled trades, and lowering the number of years it takes for new hires to reach the maximum rate of pay. Sound familiar? Toyota isn’t giving out raises out of the goodness of their heart," Fain said. "Toyota is the largest and most profitable auto company in the world. They could have just as easily raised wages a month ago or a year ago. They did it now because the company knows we’re coming for them. The company knows that Toyota workers are watching."
Fain invited Toyota workers and other non-union autoworkers to join the UAW's movement and vowed to "organize like we've never organized before."
Product commitments
The union already has said Stellantis committed $18.9 billion in U.S. investments that would add 5,000 jobs. A UAW summary says there would be "job security for all seniority workers."
At the idled Belvidere plant, Stellantis would build a midsize truck as well as a new battery plant. A Mopar distribution hub is expected to open there, too.
The new "Belvidere Consolidated Mopar Mega Hub" would represent a $100 million investment and launch in 2024 through the consolidation of work from distribution centers in Marysville, Chicago and Milwaukee, according to the union. In 2025, stamping operations would launch there to support replacement parts for the hub.
The union said that truck production would bring a $1.5 billion investment and "could more than make up for the 1,200 jobs lost when Belvidere idled." Truck production would start in 2027, according to the highlighter, and represent between 80,000 to 100,000 units of annual output.
More:UAW-Stellantis deal includes $19 billion in plant investments. Here's where they are
The battery plant, meanwhile, would bring a $3.2 billion investment and an estimated 1,300 jobs. That plant, with an as-yet-unidentified partner, would launch in 2028.
“Per the agreement we reached with Stellantis, all employees who work for the future joint venture will be employed by Stellantis and leased to the joint venture, which means they’ll fall under our national agreement," Fain said Thursday. “Having this work under our national agreement means that the next time we go to the table, we can fight together to push those wages up to our top rate."
“It’s a huge win for the union,” Art Wheaton, an automotive industry specialist at Cornell University's Industrial and Labor Relations School who has performed training for the UAW, GM and Ford, said of the union saving Belvidere. “As long as you still have ownership of that property, it can get back up and running. That product represents a lot of profit margin. They should be doing all right.”
Workers who wish to return to Belvidere would have the right to do so, and those who lost their jobs at the plant without transferring elsewhere will be on temporary layoff and eligible for supplemental unemployment and health-care benefits until the Illinois factory gets back up and running.
Saving Belvidere "is a real symbol of the power a union can bring," Shaiken said, "and the immediate benefit to families and communities."
In Kokomo, Stellantis plans a $6.2 billion investment to launch two new joint-venture battery operations with Samsung SDI, with the first scheduled to begin production in 2025 and the second in 2026.
Other product investment highlights include a next-gen Jeep Wrangler, including a battery-electric version, going to Toledo Assembly in 2028; introduction of an electric Wagoneer/Grand Wagoneer at Warren Truck in 2027; an electric version of the Ram 1500 starting production at Sterling Heights in 2024; and next-gen versions of the Durango and Grand Cherokee, including battery electrics, at Detroit Assembly Complex in 2026 and 2027, respectively.
When it comes to the potential for the company to look to close plants in the future, workers would have the right strike over that as well as product and investment commitments, a first for the union. There also is an outsourcing moratorium. And there is a right to respect picket lines, meaning the company cannot discipline or discharge workers for refusing to cross a lawful primary picket line.
Auston Gore, 33, transferred in April from the Belvidere plant to the Wrangler and Gladiator plant in Toledo. He was especially excited about that win.
"It's very taxing both emotionally and financially," Gore said of his transfer. "It's happened to so many people throughout the years. I don’t want anybody to go through that. It doesn’t just hurt you or your family; it's your community. It's sad seeing that fall apart. It gets people very emotional. That's home. There's a huge domino effect. It's like the company doesn't care. It doesn’t bother them."
He's eager to read more deeply into the details of the program to transfer back to Belvidere but says he wouldn't be able to wait years for the plant to get back up and running, and doesn't want to have to keep moving his family back and forth. The moving allowance, according to a summary of the agreement, increased to $37,500.
"I have four kids to consider," the 12-year UAW member said. "It's not an easy situation, even though I love Belvidere."
Additionally, Stellantis had agreed to product commitments at Trenton Engine Complex, protecting jobs there, and at the Toledo Machining Plant, which would double its workforce of more than 400.
Hearing about product protection at Trenton is a relief for workers like Wayne Barracks, 53, of Trenton, a team leader who thought he might have to transfer to an assembly plant if his home plant closed.
"I like this deal," the 10-year UAW member said, noting the reinstatement of COLA, increased 401(k) contributions and additional vacation time as positives. "It’s not 100% what we asked for. There are two big things we didn't get: the 32-hour work week, but a 40-hour work week is not bad, and the pensions. Those I can live without."
A letter in the deal also protects production of the Ram 1500 pickup truck at Sterling Heights Assembly Plant after Boyer said the automaker threatened to move production to Mexico.
"That is the best job security you can have: knowing exactly the product you are going to make," Wheaton said. "These deals represent billions and billions of dollars of investment. They haven't started any of their electric stuff. They need to dump a whole bunch of money to catch up."
At the same time, the automaker had expressed plans to consolidate parts distribution centers to create more Amazon.com Inc.-like hubs, though it said it wouldn't result in job reductions. Job locations, however, could be moved. The union's summary says affected employees will receive EV training.
Strike over
The agreement with Stellantis came after a 44-day targeted strike that the company earlier this week said cost it less than $800 million in net income, $3.2 billion in revenue and 50,000 vehicles produced. As of Sunday night’s third shift, about 15,800 Stellantis employees had been recalled to work.
The union last month announced GM had agreed to include its battery-plant workers in the master agreement. GM, though, has an Ultium Cells LLC battery plant with LG Energy Solution that is operating and has been unionized.
Stellantis, in the negotiations, had emphasized the need to address high rates of absenteeism at U.S. plants to improve costs, efficiency and quality. A new point-based attendance procedure was put in place, according to the union.
Members must still vote on whether or not to ratify the tentative agreement.
“Rich and I are bringing this contract to you because we wholeheartedly believe we squeezed every dime possible out of the company," Fain said. "But what happens next is up to all of you.”
Wirtschaft
Compounded, wage increases would total 27% over the four-and-a-half years, up from the $31.77 per hour top wage today. That includes an immediate 11% increase followed by 3% hikes in 2024, '25 and '26. Workers would get a 5% increase in 2027. There also is a $5,000 ratification bonus.
With reinstated cost-of-living adjustments that were suspended in 2009, the union estimated the top wage will rise 33% to more than $42 per hour. The starting wage would increase by 67% compounded with estimated COLA to more than $30 an hour.
For production workers, the top rate, not including estimated COLA, would increase from $31.77 to $35.26 upon ratification; to $36.32 in 2024; to $37.41 in 2025; to $38.53 in 2026; and to $40.46 in 2027. The union estimates that COLA will add $1.78 to base wages by the end of the agreement, and a total value of approximately $8,800.
In addition, the time for workers to reach the top pay scale is reduced to three years from eight. All full-time workers after three months will be eligible for supplemental unemployment benefits. Lower-paid workers at Mopar parts distribution centers would move up to the production wage scale.
And supplemental workers would start at $21 per hour and convert to full-time after nine months. More than 3,200 current supplementals are expected to become full-time. Supplementals also will be eligible for profit sharing, tuition assistance and dependent scholarships now, too.
Skilled trades workers have an increased tool allowance to $1.50 per hour. They also no longer could be forced into production jobs.
Stellantis also would extend the automaker's new car lease program, currently available to management, to workers with at least two years of experience.
The company agreed to increase contributions to retirement plans for current retirees, workers with pensions and employees with 401(k)s. The company also is offering a $50,000 retirement incentive package in 2024 as well as '26.
The agreement includes annual payments of $500 to current retirees and surviving spouses, what the union touted as the first bonus for current retirees in 17 years. Another contract provision will give an increase of $1,800 a year to future pensioners. And current in-progression employees will receive a 10% employer contribution, with no required employee contribution, to their 401(k)s.
The union also bargained for the Juneteenth holiday and paid parental leave. The company would only be able to force workers to use one week of vacation during plant shutdowns.
Stellantis Chief Financial Officer Natalie Knight this week declined to provide specifics on how the deal would affect the company's labor costs but said it was in line with what Ford shared the week prior.
The Blue Oval said its agreement represents $850 to $900 in additional cost per vehicle and would impact its margin by up to 0.7%. John Lawler, Ford's CFO, said the company would remain profitable, but it must find a way to boost productivity.
The United Auto Workers reached a tentative agreement with General Motors Co. on Monday, ending a 46-day targeted strike there. The union's GM council will meet on Friday to discuss the deal and vote to send it to 46,000 members there.