Tensions between Stellantis and the UAW escalate

Stellantis has filed a federal lawsuit against the United Auto Workers (UAW), claiming the union has violated its historic contract agreement by threatening to strike the automaker.

The lawsuit – prompted by a local UAW chapter’s authorization of a strike at Stellantis’ Los Angeles Parts Distribution Center – is the latest sign of fracturing between the two parties, stemming from an ongoing dispute over their contract agreement ratified last November.        

The issue: At the heart of the Stellantis and UAW contention is the automaker's commitment to invest $1.5 billion in its Belvidere, Illinois plant to build new trucks by 2027 as part of a $19 billion investment plan. 

• UAW President Shawn Fain says that Stellantis is backtracking on the agreed-upon investments and called the lawsuit a “misinformation campaign” intended to mislead workers about their right to strike.  

• Stellantis argues that the investments were contingent on market conditions, which have changed due to the falling demand for electric vehicles. However, the company says it remains committed to its investments.   

• Stellantis’ investment plans in the plant, to date, equate to about 2% of the $19 billion in commitments, according to the UAW.   

Follow the money: The Department of Energy plans to award Stellantis $334 million to convert the Belvidere facility into a plant capable of building EVs and another $250 million to modify its Indiana Transmissions plant to produce EV components. But the awards have yet to be finalized.  

Why it matters: Amid Stellantis’ current struggles in the U.S. market, a UAW strike at its Los Angeles Parts Distribution Center could deepen the automaker’s financial standing, given that it could potentially set off strikes at other Stellantis facilities. 

• In early September, Fain said that 28 local union chapters, covering tens of thousands of workers, had filed grievances against Stellantis.

• Last year’s national United Auto Workers strike cost Stellantis about $3.2 billion in lost revenue through October.

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