The latest contract proposal from Chrysler-owner Stellantis to the United Auto Workers (UAW) union could lead to the closure of 18 plants in the US, according to reports citing sources familiar with discussions.
The proposal, made prior to the start of the UAW strike on Thursday night, could also repurpose an idled assembly plant in Illinois and bring in new investments to create a more modern parts and distribution network.
The plants that could be closed include 10 'Mopar' (read: motor parts) plants in North America with the goal of consolidating them into larger distribution centers. This could include a 'Mega Hub' at Belvidere Assembly, an Illinois plant that Stellantis indefinitely idled in February.
The Mopar facilities that could close include Atlanta Parts & Distribution Center (PDC); Boston PDC, Centerline Warehouse & Packaging, Chicago PDC, Marysville PDC; Milwaukee PDC, New York PDC, Orlando PDC, Sherwood PDC and Warren PDC.
The current proposal would also establish new Mopar facilities in Fishkill, New York, and Macon, Georgia.
Getting the Belvidere Assembly plant back online would be a victory for the UAW but leaders have concerns about how many union members the new facilities can employ, according to reports.
Pay is also a concern. Mopar jobs typically pay less than those at assembly facilities such as Belvidere, which was producing Jeep Cherokee SUVs before it went idle.
Stellantis North American chief operating officer Mark Stewart, who is leading the company’s negotiations with the UAW, said over the weekend that Mopar facilities need to be modernized.
“We need to make investments into Mopar,” Stewart said during a media roundtable Saturday. “In a lot of cases, it … doesn’t make sense to make those investments in the location that they’re in.”
In terms of wages, Stellantis’ proposal includes raises close to 21% over the course of the contract, notably with an immediate 10% bump. It would also end wage tiers for certain workers, which the union has been pushing for.
“We’re taking it seriously responsibly, and we’re trying to find creative solutions for each of those. We listened, we continue to listen. We continue to bargain in good faith,” Stewart said. “It really is about a win-win. You know, it’s not about warfare.”
Zooming out, the UAW is striking the big three automakers simultaneously with a targeted strike aimed at specific plants.
The plants affected are the Ford Motor Company (NYSE:F) Ranger midsize pickup and Bronco SUV plant in Wayne, Michigan; the General Motors Company (NYSE:GM) midsize truck and full-size van plant in Wentzville, Missouri; and Stellantis’ Jeep Wrangler and Gladiator plant in Toledo, Ohio.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel