Stellantis Proposes New Contract Potentially Resulting In Closure Of 18 US Facilities

Automaker Stellantis N.V. STLA’s latest contract proposal to the United Auto Workers union threatens to shutter 18 U.S. facilities.

The clash between the company and union leaders hinges on Stellantis’ vision of creating a “modernized” parts and distribution network, according to a Monday CNBC report citing sources familiar with the talks.

What Happened: The plan aims to close down 10 “Mopar” parts and distribution centers across the country, merging them into larger, more efficient “Amazon-like” distribution hubs. Additionally, it envisions the establishment of a potential “Mega Hub” at the indefinitely idled Belvidere Assembly.

The list of affected facilities encompasses the Tipton Transmission Plant in Indiana, the partially decommissioned Trenton Engine Complex, the already idled Mount Elliott Tool & Die in Michigan and the idled Belvidere Assembly. Stellantis’ North American headquarters and technology center in Auburn Hills, Michigan is also under scrutiny.

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The proposal offers a nearly 21% wage increase over the contract period, along with an immediate 10% pay hike. It suggests eliminating wage tiers for specific workers and includes various bonuses and benefits. UAW Vice President Rich Boyer underscores that the fate of the Belvidere plant remains a central point of contention.

Mark Stewart, Stellantis’ North American chief operating officer, argues that the Mopar facilities need a modernization overhaul. He assured that these changes won’t affect employment levels but provides no further details about the plan, the report said.

Why It Matters: Stellantis’ contract proposal carries significant implications for both the automaker and its workforce.

The potential closure of 18 facilities could reshape Stellantis’ operational footprint in North America, impacting thousands of employees. The outcome of these intense negotiations between Stellantis and UAW will be closely monitored as it unfolds.

STLA Stock Reactions: Shares of Stellantis N.V. were 1.6% lower in a volatile trading session on Monday.

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