UAW-Stellantis deal includes $18.9 billion in new investments

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Randy Harvard (right), an autoworker of 29 years, stands with other United Auto Workers members after the union called a strike Oct. 23, 2023 at Stellantis’ Ram 1500 plant in Sterling Heights, Mich.

Michael Wayland / CNBC

DETROIT — The United Auto Workers union said Chrysler-parent Stellantis plans to invest $18.9 billion in the U.S. by April 2028, including $1.5 billion for new midsize pickup truck production at an idled factory in Belvidere, Illinois.

The investments are expected to be completed during the term of the 4½-year tentative agreement, which must still be ratified by the roughly 43,000 UAW members covered by the proposed contract at Stellantis.

Details of the tentative agreement were released Thursday night after local UAW leaders approved the pact, which UAW President Shawn Fain called the “most lucrative contract our union has won in decades.”

The tentative labor agreement was reached Saturday after roughly six weeks of targeted strikes by the union against Stellantis, General Motors and Ford Motor. The work stoppages began Sept. 15 after the sides failed to reach deals covering 146,000 UAW members with the automakers by a strike deadline.

“For the first time in a long time, we’ve done the unthinkable: Reopened a plant,” Fain said during an online broadcast Thursday, referring to the Belvidere factory, which was idled in February 2022. “We didn’t do it by begging the company or agreeing to work terrible hours, or take a pay cut, or pursue a race to the bottom. We didn’t do it by giving back. We did it by fighting back.”

Heading into the talks, UAW Vice President Rich Boyer, who led the Stellantis talks, made product commitments a priority and stressed that the Belvidere plant was a make-or-break issue.

The details announced Thursday include $8.1 billion in product commitments secured by union negotiators from Stellantis, the UAW said.

UAW Vice President Rich Boyer addresses union members during a “Solidarity Sunday” rally on Aug. 20, 2023 in Warren, Mich.

Michael Wayland / CNBC

In addition to Belvidere, other planned investments include $1.5 billion each to a Dodge-Jeep plant in Detroit and Jeep complex in Ohio; $1.4 billion at a Ram plant in Sterling Heights, Michigan; and $600 million for Stellantis’ Warren Truck plant in suburban Detroit.

The union said the company also plans to invest $3.2 billion in a new joint-venture battery plant in Belvidere that’s slated to open in 2028. The deal further lists previously announced battery investments of $6.2 billion for two joint-venture battery facilities in Kokomo, Indiana.

Fain said UAW members at the battery plant in Belvidere will be represented by the union through the company leasing the employees to the joint venture. It’s unclear if the already announced plants will be under the same terms. A UAW spokesman did not immediately comment following the announcement of the agreement details.

A Stellantis spokeswoman declined to comment on the union’s announcements.

The UAW said negotiators also secured a car-lease program for employees that mirrors that of company management. They said it includes discounted prices, unlimited miles, insurance and maintenance and repairs.

Like the UAW’s tentative agreement with Ford, the deal includes significant pay increases, bonuses and other enhanced benefits for autoworkers such as profit-sharing payments and a $5,000 ratification bonus.

The 25% raises include an 11% increase upon ratification, followed by a 3% bump-up the next three years and then a 5% increase in September 2027.

UAW members at Ford have already started voting on that tentative agreement: 82% of workers at Ford’s Michigan Assembly Plant voted in support of the pact this week. The suburban Detroit plant was among the first to strike alongside other assembly plants with GM and Stellantis.

UAW members with Stellantis and GM are expected to vote on the deals over the next couple weeks. A simple majority is needed to ratify the deals.

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