(Reuters) – Chrysler-parent Stellantis (STLAM.MI) has agreed to build a new $3.2 billion battery plant and invest $1.5 billion in a new mid-size truck factory in Illinois under its tentative labor agreement, the United Auto Workers union said on Thursday.
UAW President Shawn Fain disclosed new details of the labor deal that includes a 25% pay hike, better retirement benefits and other significant improvements and runs through April 2028 after union leaders agreed earlier on Thursday to send the deal to members for a ratification vote that will take about two weeks.
Stellantis will also offer hourly employees a company-subsidized lease program that will make it more affordable to drive a new vehicle, similar to programs U.S. automakers offer for white collar employees, the UAW said.
Stellantis declined to comment, saying it would wait for workers to vote first before discussing the deal.
Ford (F.N) production workers are getting a $1,500 voucher they can use toward the purchase of a new vehicle.
The UAW detailed many of Stellantis investment plans, the biggest of which of was convincing the company to reopen the Belvidere, Illinois assembly plant that shuttered operations in February.
Belvidere will begin producing 80,000 to 100,000 mid-size trucks annually in 2027 and the $3.2 billion battery plant with a yet to be named joint venture partner will open in 2028.
The new investments include $1.5 billion in its Toledo Jeep operations, including building an EV Jeep Wrangler in 2028.
Stellantis will invest $3.5 billion in three Michigan assembly plants, including $1.5 billion in a Detroit plant to updated versions of the Dodge Durango and Jeep Grand Cherokee, including electric versions of those in 2026 and 2027.
In North America, Stellantis is focusing its investments on trucks and SUVs, and covering its bets on both gas-powered and EV versions through 2028.
Stellantis will also offer $50,000 buyouts in 2024 and 2026 to UAW production workers, allowing it to cut costs by hiring fresh workers who start at lower wages.
The UAW said the Stellantis investment commitments total about $19 billion, but that includes some previously announced plans.
Stellantis has slightly longer than rival Ford to convert current temporary workers to permanent employees. Within the first year, 3,200 temporary workers will be converted to full time and after that they will automatically get full-time status after nine months of service.
A source confirmed the UAW tentative agreements with Stellantis, General Motors (GM.N) and Ford include an additional ratification bonus of around $110 per day for employees who were on strike or laid off during the work stoppage that began in mid-September.
That is on top of the $5,000 bonus hourly workers will get on ratification along with an 11% immediate pay hike.
Reporting by David Shepardson in Washington; additionnal reporting by Paul Lienert; Editing by Chris Reese, Diane Craft and Jamie Freed