Members of the United Auto Workers attend a solidarity rally on September 15, 2023 in Detroit, Michigan, as the UAW strikes the three major automakers.

Bill Pugliano | Getty Images

DETROIT – Automaker Stellantis’ latest contract proposal to the United Auto Workers union could result in the closure of 18 U.S. plants, but could also involve new investments and the repurposing of an idled vehicle assembly plant in Illinois, sources familiar with the discussions said , told CNBC.

The plans would likely affect thousands of UAW members, shrink the automaker’s North American footprint and create a new “modernized” parts and distribution network, over which company and union leaders have disagreed, the sources said.

A focus of the plan is the possible closure of 10 Mopar parts and distribution centers scattered across the country to consolidate them into larger Amazon-like distribution centers, said the sources, who spoke on condition of anonymity Conversations are private and ongoing. The proposal included a potential “mega hub” at Belvidere Assembly, which the automaker shut down indefinitely in February.

Three sources said other manufacturing facilities included in the proposal include the Tipton Transmission Plant in Indiana; the partially decommissioned Trenton Engine Complex; which is already idle Mount Elliott Tool & Die in Michigan; and the idle Belvidere Assembly. Also included was a Detroit warehouse, office space, and the automaker’s North American headquarters and technology center, a massive 500-acre campus in the Detroit area that was formerly used as Chrysler’s world headquarters.

The final part of the offering, affecting North American headquarters, comes as companies adjust to remote or hybrid work and seek to recalibrate their physical footprints in the wake of the coronavirus pandemic.

The sign is seen outside the FCA US LLC headquarters and technology center as it was changed to Stellantis on January 19, 2021 in Auburn Hills, Michigan.

Jeff Kowalsky | Afp | Getty Images

In 2021, Stellantis announced that the majority of its employees would work remotely most of the time, including its then 17,000 employees in North America. Following these plans, the company confirmed that it is “evaluating how we work to enable our teams to achieve the greatest innovation, creativity and efficiency. This analysis includes potential adjustments to our real estate portfolio.” Stellantis said the facility will “continue to be our North American headquarters and our North American technical center.”

There is no guarantee that the facilities would be closed under a labor agreement. However, according to a company source, Stellantis is required to consider potential closures or sales of any location where a UAW member works. The Detroit Free Press reported in 2022 that the company could lease part of the headquarters complex.

The 18 possible closures were part of a Thursday evening proposal from Stellantis to the union, which began targeted strikes against Detroit automakers after contracts later expired at 11:59 p.m. Negotiations between Stellantis and the UAW resumed Monday morning.

Stellantis also included its Arizona test site in the proposal, but said operations would continue with any sale, two of the sources said.

Stellantis described Monday’s discussions with UAW leaders as “constructive and focused on where we can find common ground.”

“We continue to listen to the UAW to determine where we can work together and will continue to negotiate in good faith until an agreement is reached. We look forward to getting everyone back to work as quickly as possible,” the company said.

Belvidere Assembly

The Belvidere, Illinois, plant is one of the biggest points of contention between the automaker and the union, which is now in its fourth day of targeted strikes at three major assembly plants. The union is striking at one plant each at Stellantis, General Motors and Ford Motor, but has threatened further work stoppages depending on how negotiations go.

Reopening the Illinois plant would be a big win for UAW leaders, but they have concerns about employment, uprooting workers and families, and pay and automation, according to two of the sources.

They are particularly concerned that new facilities may not employ as many union members as the assembly plant and current parts and distribution centers, they said. Mopar jobs also pay less than jobs at traditional assembly plants like Belvidere, which produced Jeep Cherokee SUVs until it was shut down in February.

Two sources said the parts proposal for Belvidere was one of several discussions regarding the facility and that the offer could change based on the discussions. There were also discussions about using part of Belvidere – a nearly 5 million square foot facility – for battery components for electric vehicles, it said.

Mark Stewart, chief operating officer of Stellantis North American, which is overseeing the UAW talks, said the company needs to “modernize” Mopar facilities. Without revealing specific details, he said these plans would have no impact on employment.

“We need to invest in Mopar,” Stewart said during a media roundtable on Saturday. “In many cases it doesn’t make sense to make these investments in the location where they are made.”

Without revealing details of the plan, Stewart called the company’s proposal for Belvidere a “very compelling proposition.” However, he said it was contingent on the union agreeing to a tentative agreement before a strike.

“So we have to re-examine all of these points, but there is a very convincing solution to that, which has been rejected,” he said on Saturday.

Stellantis’ most recent proposal to the UAW included raises of nearly 21% over the life of the contract, including an immediate 10% wage increase, and called for the elimination of pay scales for some workers, in addition to other bonuses and benefits. The proposal’s benefits are consistent with other offers from GM and Ford.

UAW Vice President Rich Boyer speaks to union members during a “Solidarity Sunday” rally on August 20, 2023 in Warren, Michigan.

Michael Wayland/CNBC

UAW Vice President Rich Boyer has emphasized that the Belvidere plant is a critical issue. He even encouraged a crowd to chant “Bull—-” during a rally Friday with U.S. Sen. Bernie Sanders, I-Vt., over Detroit automakers’ offers.

“I want the world to hear this: This is about the working class. It’s about the haves and have-nots, and we’re tired of having nothing,” Boyer, who is leading the Stellantis negotiations, said during the rally.


The company’s current proposal calls for building new Mopar plants in Fishkill, New York, and Macon, Georgia, and moving work from several plants in Michigan to the Trenton North plant, southwest of Detroit, according to two sources.

Mopar facilities that could close include Atlanta PDC; Boston PDC; centerline warehouse and packaging; Chicago PDC; Marysville PDC; Milwaukee PDC; New York PDC; Orlando PDC; Sherwood PDC; and Warren PDC.

Mopar is a combination of engine and parts that was founded almost a century ago. Stellantis says it has 20 Mopar parts and distribution centers across the U.S. and more than 2,000 active employees in the unit.

Mopar was an expected major growth area for the company’s predecessor, Fiat Chrysler, which created a growth plan for its employees and facilities. But the locations were established before Amazon’s big push to create mega-distribution centers, which has changed the way many of them do business.

Stellantis’ proposal also includes eliminating pay scales within the Mopar division. Wages for these employees currently range from about $17 to over $30 per hour. The offer also includes a moratorium on the sale or spin-off of Mopar’s operations during the term of the four-year agreement.

“We take the matter seriously and responsibly and try to find creative solutions for each of them. We have listened, we continue to listen. We continue to negotiate in good faith,” Stewart said. “It really is a win-win situation. You know, it’s not about warfare.”

Source :

Leave a Reply

Your email address will not be published. Required fields are marked *