Despite its accelerated efforts to pressure Dodge and Jeep parent company Stellantis and its CEO, Carlos Tavares, the United Auto Workers (UAW) union is holding off on making any major moves against the automaker.
For the past few months, Stellantis and the union have been in contention over specific investment promises written into its landmark contract in 2023; specifically the reopening of the Belvidere Assembly Plant in Illinois.
💰💸 Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter 💰💸
Beginning with a speech delivered by UAW president Shawn Fain at the opening night of the Democratic National Convention in August, in which he called out Stellantis for lagging in its commitment to Belvedere even as it was awarded a $334 million U.S. Energy Department grant to retool the facility, the union has raised the pressure on Stellantis.
"But a year later, one company [Stellantis] wants to back on their commitments on our contract," Fain said to a packed United Center and to millions watching on TV.
"Let me be clear: Stellantis must keep the promises they made to America in our union contract. And the UAW will take whatever action necessary at Stellantis or any other corporation to stand up and hold corporate America accountable."
The UAW takes a step back
According to a new report in The Detroit News, the UAW is stepping back from its strike push as the deadline for informing the automaker of its plans looms.
After a Wednesday rally, Kevin Gotinsky, the UAW's director of its Stellantis wing, told the Detroit-area paper that the move includes withdrawing the grievances made by three UAW locals representing Stellantis workers who have already made authorization votes to strike, including those representing Stellantis facilities in Rockford, Illinois, Denver, Colorado and Los Angeles, California.
"It was time-sensitive, so when we exhaust the grievance process, and it goes through the third step, it opens a 60-day window," Gotinsky said.
"That 60-day window is coming to a close in the near future for most [UAW] locals, depending on when they all [filed grievances], but some are already expired now. So that gives us the opportunity to either do one of two things: Either we let the company know we have the intent to strike, or we can withdraw without prejudice."
More Automotive:
- Hurricanes flooded 350,000 cars this year. Now they’re heading to the used car market.
- These parents shun Uber for Waymo for a built-in safety feature
- Distressed luxury sportscar maker files Chapter 11 bankruptcy
The UAW's Stellantis (STLA) director noted that within the next three months, the union can start the grievance process again to proceed toward a strike. Despite this, he also acknowledged that the union membership is fearful of a strike — especially as Stellantis is laying down the layoff hammer.
In moves meant to "improve efficiency and optimize its footprint to ensure future competitiveness in today's rapidly changing global market," the automaker laid off approximately 1,100 employees at its Warren Truck Assembly plant following the end of production of the Ram 1500 pickup earlier this month and paused production at a Dodge and Jeep plant.
In lieu of a wide-scale strike, the union's current agenda is much less outwardly intense. Gotinsky told the paper that the UAW will further encourage its membership to keep pressuring the automaker about its concerns over Belvedere and other commitments while negotiating these issues at the bargaining table.
Related: Stellantis is taking the UAW to Federal court over latest threat
Stellantis's legal battle with the UAW
The UAW's retreat comes as Stellantis fights back against the UAW and its local factions in federal court.
On Oct. 7, Stellantis announced that it filed eight additional lawsuits against the UAW and 23 local chapters on Oct. 4, just a day after it filed a suit against the UAW and UAW Local 230, which represents the Los Angeles Parts Distribution Center, on Oct. 3 in response to the Local taking a strike authorization vote.
The suit, which was filed in the U.S. District Court Central District of California, claims that the union "filed sham grievances designed to justify mid-contract strikes against Stellantis" that violates the no-strike clause in its bargaining agreement.
"Ignoring this negotiated-for and mutually agreed-upon language in Letter 311 [Stellantis's name for the agreement], the UAW and its agents, including President Shawn Fain, have embarked on a sustained, multi-month campaign against the Company to force the planned investments without Company approval and regardless of business factors," the suit read.
Related: Top US lawmakers blast Stellantis CEO over UAW commitments
Just last week, 56 members of the House of Representatives and 23 members of the Senate, including Senate Majority Leader Chuck Schumer (D-NY) blasted Stellantis and its CEO, Carlos Tavares, for failing to honor the commitments it made to the United Auto Workers.
In their letter, the politicians argued that the delay of the Belvedere plant and a reported move of Dodge Durango production overseas violated their agreement. The Senators also pointed out that Stellantis should have no excuse for such a delay at Belvedere, as they are about to receive $335 million in public money to reopen the plant.
“Stellantis’ reliance on taxpayer support, while planning layoffs and moving production outside of the United States, betrays the trust of American workers and taxpayers,” the letter said.
Stellantis NV trades on the New York Stock Exchange as STLA and is up 3.33% from the opening bell, trading at $13.67 per share at the time of writing.
Related: Veteran fund manager sees world of pain coming for stocks
