This is getting ugly.
Stellantis, the parent company of Dodge, Chrysler, Jeep, and Ram is going on the offensive. First, they call out the UAW President for spreading “false information” to its members, and then drops a total of nine lawsuits on the union in court.
Late last week, Stellantis filed a lawsuit in the US District Court for the Central District of California and in it, the automaker accused the UAW of planning to violate a 2023 collective bargaining agreement to stop what it calls “impermissible” mid-contract strikes. The union is threatening to strike over delayed investments in the last agreement between the company and the union. The union says Stellantis promised to reopen the Belvidere assembly plant, which was slated to build electric cars and components. As we know, interest in EVs has been on the decline.
Just a few days later, Stellantis filed eight more lawsuits against the UAW and some of its local chapters. The automaker is saying the UAW has proposed reviving the jobs bank, a previous benefit that would continue paying employees who were laid off, prompting the lawsuits against the union over its threats to strike.
Stellantis went on to say it is suing the union and 24 local chapters around the U.S., arguing that a strike would amount to a breach of contract. Stellantis said no to an Oct. 5th request by UAW leaders to restore the jobs bank benefits for employees affected by the February 2023 closure of the Belvidere plant, that affected about 900 people whose jobs were transferred to other assembly plants in the U.S.
Stellantis disputes the UAW’s claim that workers are allowed to strike under the agreement if the company fails to deliver on promises in the deal, which runs through April 2028.
“Because the UAW has chosen to disregard this clause, they have left us with no choice but to take the necessary steps to protect the Company and our employees,” Stellantis senior vice president of human resources, Tobin Williams, wrote in an email to employees.
“The planned future investments in the letter are conditional, require Company approval, and are subject to change based on these business factor contingencies,” Stellantis wrote in the lawsuit.
Following a UAW Rally last week, Stellantis reiterated its position and the facts regarding allegations UAW President Shawn Fain continues to make, in their words, “further spreading misinformation to the members he represents.” The automaker stated:
Fact: Letter 311, the Investment Letter, in the 2023 collective bargaining agreement, which was negotiated and ratified by UAW members, clearly states that all planned investments are subject to business factor contingencies including market conditions and consumer demand, and company approval. The investments and timelines are not absolute guarantees.
Fact: There is indisputable volatility in the market, especially as the industry transitions to an electrified future. Over the past year, numerous companies across the industry have announced investment and product delays as well as outright product cancelations. This is information that the company has repeatedly shared with the UAW and that they have acknowledged. The evidence of a dramatic transformation in the industry and its effects on the market is clear.
Fact: The company confirmed a delay – not a cancellation, as Fain recently suggested – of the plans for the Belvidere plant allocations. This decision is consistent with the current challenging automotive landscape and the plain language of Letter 311. The company remains committed to investing in the U.S. to create jobs and support our communities.
Fact: Because of the delay in the Belvidere plant allocations, the company has presented the UAW with a nearer term alternative for the Mega Hub that would mean more favorable employment options for many UAW-represented employees even though it would require more investment by the company.
Fact: The UAW does not have the legal right to strike via pending grievances over investment decisions the Company is making based on the business factor contingencies in Letter 311. Because the UAW’s grievances ignore those contingencies, which are clearly established in the 2023 agreement that was negotiated and ratified by UAW members, they are invalid in the Company’s view.
Fact: A strike right now has the potential to further weaken the company at a critical time.
“Let me be crystal clear, we have abided by and will continue to abide by the 2023 collective bargaining agreement,” said Carlos Zarlenga, COO, Stellantis North America. “It is in everyone’s best interest to have a healthy company that can compete in a global marketplace. This is a time for us to work together, not against each other.”
Since the election of Shawn Fain as UAW President, tensions have run high between the union and all automakers. I have likened Fain to be a “bully” on the Car Pro Show several times and it is my opinion that while the UAW members may like the short-term results Fain accomplishes, long-term it could easily make it impossible for automakers to survive. If correct, that will result in the loss of union jobs. I would prefer to see good faith bargaining in a calm and rational manner, to the route Fain takes which is playing things out in the media. He seems to love the attention and the accolades from his constituents.
The UAW must allow for market changes in the fast paced world of building vehicles. The first priority of any automaker is to build quality vehicles people want to buy, and to return an investment to the shareholders. That means having the right to make sudden changes without the permission of the UAW. The UAW President has a “my way or the highway” mentality, which is dangerous to the health of the very union he represents.
Shawn Fain may have met his match with Stellantis, and the bad news for him is that this may spur Ford, General Motors, and the others to stand up to him as well. So far, he has run over anybody in his way, but those days could be coming to an end. Fain has lost a lot of his leverage this time around, and he needs to realize it. The dealerships are already overloaded with vehicles they are paying a lot of interest on. Nothing would make them happier I’m sure than a strike that would pare down a 140-day supply of vehicles, way more than what is considered normal.
Nobody in top management at Stellantis would acknowledge it, but a strike could actually help them out of the short-term inventory crisis they are grappling with as we speak. Stellantis is facing bigger problems than the UAW as the company tries to regroup and shuffle its management team and cut expenses after giving a bleak profit outlook for the future.
Mr. Fain, look up the word COMPROMISE. It is in the dictionary and try to comprehend it before you and your hard working members find yourselves without a job. We have a saying in Texas: Pigs get fat, but hogs get slaughtered. Give that some thought.
Photo Credit: Stellantis.