Stellantis Denies UAW Allegations Of Failing To Keep Promises Made To Workers

Chrysler parent Stellantis NV STLA on Monday denied allegations made by United Auto Workers (UAW) President Shawn Fain that the company failed to keep its commitments made to union workers under an agreement reached last year.

What Happened: In a Facebook live dated Sept. 17, Fain said that Stellantis has broken promises made to the workers and that several of its local chapters are preparing to strike. The union alleges that Stellantis is attempting to move the production of the Dodge Durano SUV out of the U.S. and is also looking to not reopen the idled Belvidere assembly plant in Illinois despite it being promised.

"To be clear, Stellantis has abided, and will continue to abide, by the agreement the parties reached in 2023," Stellantis North America COO Carlos Zarlenga wrote in an email to Fain on Monday.

Stellantis said that the timelines and investment promises provided during the negotiations last year are not “absolute guarantees” but dependent upon multiple factors including market conditions.

“There is indisputable volatility in the market, especially as the industry transitions to an electrified future,” the company said, while adding that that several investments and products have been canceled across the automaking industry over the past year.

The company has not made an announcement regarding the production allocation of the next generation of Dodge Durango, Stellantis said, while adding that the decision to delay the reopening of the Belvidere plant is due to the current “challenging automotive landscape.”

Why It Matters: Last week, UAW said that it filed federal unfair labor practice charges at the National Labor Relations Board (NLRB) against Stellantis for alleged violation of the labor contract entered into last year.

Earlier this month, President of U.S. Stellantis National Dealer Council (NDC) Kevin Farrish also wrote to company CEO Carlos Tavares, accusing him of "short-term decision-making" and urged that the CEO spend more to clear older inventory. Tavares' decisions, the NDC President said, ended up shrinking the company's market share and hurting its many brands.

Stellantis, however, said that it takes "absolute exception" to the letter, and termed it a "public personal attack."

For the first half of 2024, Stellantis reported a 48% fall in net profit to €5.6 billion ($6.22 billion) and a 14% fall in net revenue to €85 billion, owing to a dip in market share in North America.

“It is an understatement to say that H1 2024 results were disappointing and humbling,” Tavares said at the company’s earnings call last month.

"The Company's performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues… We have significant work to do, especially in North America, to maximize our long-term potential,” he said while also reiterating his personal involvement with the teams in North America to fix the issue.

In the second quarter alone, Stellantis saw its sales in the U.S. fall 21% to 344,993 vehicles.

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