Summary
- About 80 members of Congress urging Stellantis to honor contract commitments with UAW
- Stellantis say not violating deal with union, cites changing market conditions
- UAW could strike as tensions build in lead-up to US election
DETROIT, (Reuters) – Nearly 80 members of Congress, including the Senate’s top two Democrats, on Wednesday urged automaker Stellantis to honor investment commitments that are part of its contract with the United Auto Workers union.
The union and the Jeep-maker have been in a bitter battle after Stellantis said it would delay a planned $1.5 billion investment to reopen an assembly plant in Belvidere, Illinois, though the automaker insists it is committed to the plan and denies it is violating the contract.
Democratic members of the House of Representatives and U.S. Senate sent two separate letters, first reported by Reuters, to the automaker on Wednesday outlining their concerns. The Democratic lawmakers including Senate Majority Leader Chuck Schumer and Senator Dick Durbin cited the Illinois plant delay and other reported decisions by Stellantis.
“These actions violate the obligations Stellantis made to the UAW,” the lawmakers wrote to Stellantis CEO Carlos Tavares, asking the automaker, which has come under heat from dealers and shareholders for its declining sales, to lay out a timeline for the investments.
Chrysler owner Stellantis, which recently shook up its top leadership as it tries to turn around slipping North American sales, is now facing another nationwide walkout from the union, just about a year after UAW president Shawn Fain led a six-week strike against Detroit’s Big Three automakers.
The company did not immediately respond to a request for comment.
The UAW’s grievances, echoed in those letters, center around product and investment commitments made during the contract negotiations last autumn. Stellantis agreed to reopen the shuttered Illinois assembly plant to build new mid-size trucks by 2027.
The UAW’s grievances, echoed in those letters, center around product and investment commitments made during the contract negotiations last autumn. Stellantis agreed to reopen the shuttered Illinois assembly plant to build new mid-size trucks by 2027.
The company’s bold outlook pushed Tesla shares up 12% in post-market trading on Wednesday, setting up Tesla to add about $80 billion in stock market.
That has reassured investors the company was improving its core business of selling electric.
The carmaker this month sued the UAW in federal court over the allegations and said it was not in violation of the contract. The agreement allowed Stellantis to delay financial commitments if market conditions worsen, but the union and signers on the two letters from Congress are not satisfied with the company using this as a reason to shift plans.
“Stellantis’s recent attempt to justify delays in its contractually mandated investment and production commitments did nothing to assuage our concerns. Stellantis appears resolved to claim market conditions prevent you from honoring these commitments,” said the letter sent from dozens of Democrats in the U.S. House of Representatives.
Tensions between the union and carmaker have risen in the lead-up to the Nov. 5 U.S. Presidential election, with Vice President Kamala Harris specifically calling out Stellantis in public statements for taking actions that “break their word to
The union has laid the groundwork for a nationwide walkout at Stellantis through filing grievances and holding strike votes at its local chapters. So far, some local chapters have already voted to authorize a strike if the two sides cannot come to an agreement.
Reporting by Nora Eckert and David Shepardson; Editing by Jamie Freed
