Internal Discord, Dispute With Stellantis Slow UAW's Momentum

The UAW and the union’s president, Shawn Fain, are having a hard time gaining traction in their fight against Stellantis.

Fain also faces challenges such as an investigation by the union’s court-appointed monitor into his push to curb the power of fellow members of the UAW board, and the risk of strike fatigue among Stellantis employees, who spent more than 40 days on the picket line last fall.

The UAW’s “stand-up strike” against Detroit’s three automakers was considered a success. But one key provision in the companies’ commitments to invest in products and factories includes a carefully worded escape clause that allows them to slow or stop definitive action, according to Stellantis, which is reeling from a steep decline in profits and market share.

Stellantis CEO Carlos Tavares says he is determined to stop the slide by cutting costs, boosting productivity and holding down inventories. He recently replaced the head of the Jeep brand and brought in a new vice president of manufacturing from electric-vehicle startup Rivian to help with the company’s troubled and expensive transition to EVs.

In response, the UAW is threatening to authorize strikes at assembly plants in Toledo, OH; Kokomo, IN; and Detroit, Warren and Sterling Heights, MI, to protest the loss of jobs such as the planned layoffs next month of 2,450 employees at the Warren truck plant.

UAW president Fain meets with Sterling Heights (MI) Assembly Plant workers as contract talks with Stellantis begin on July 12, 2023.

A related fight over reopening the Belvidere, IL, plant and Tavares’ cost-cutting underscores the weakness of Stellantis’ product plans, which have germinated for years but yielded few results.

One of the speakers at a recent “Keep the Promise” rally outside the Sterling Heights truck assembly plant notes he has worked for the automaker for 30 years and seen five different top management teams come and go, and the decisions frustrate and bewilder the company’s employees.

“All we want to do is come to work and make a solid product,” says one UAW member, who asked not to be identified. “We take pride in that.”

The delay of a planned midsize truck, Stellantis management informs Fain by letter, now extends beyond the original 2027 date for the start of production. That will require suspension of the investments in Belvidere even though it is in line for substantial state and federal assistance.

Stellantis predecessor Fiat Chrysler Automobiles ended production of the Ram Dakota in 2010. Since then, management has been talking about inserting a new midsize pickup in the company’s lineup.

The Jeep Gladiator fits into the segment but seems to lack the broad appeal of similar offerings from rivals General Motors, Ford and Toyota, which dominate the thriving midsize market.

Moreover, the Jeep brand, Stellantis’ biggest money-maker worldwide, has been losing ground. Its sales were down 19% in the second quarter in the lucrative U.S. market, and were down 9% for the first half of 2024, which has contributed to loss of market share.

Stellantis has confirmed it is cutting production at Jeep plants in Detroit and Toledo.

The automaker killed off one of the more affordable Jeep products, the Cherokee compact CUV, when it idled Belvidere (pictured, below) in early 2023, months ahead of contract negotiations which saw Fain make reviving Belvidere a critical element of the UAW’s contract demands. Compact utility vehicles are now the most popular vehicles sold at retail in the U.S.

Stopping Detroit’s automakers from closing plants is or was one of the UAW’s top goals in contract talks going back to the 1980s. The union has tried various strategies, starting with “jobs banks,” since UAW leaders believed the companies would rather keep workers gainfully employed or retrain them rather than pay them to do nothing.

The jobs banks never worked as planned. While hundreds of workers did learn new skills and many earned college degrees or worked on small projects benefiting various communities, it also gave the UAW a black eye as it was accused of fostering a system that reduced productivity and amounted to a form of industrial welfare.

Next the union tried to negotiate a series of plant closing moratoriums, extended from contract to contract. But the manufacturers simply idled plants instead. Factories such as Ford assembly plants in St. Paul, MN, and Norfolk, VA, were closed permanently when contracts expired since they were no longer needed.

In 2015, the UAW negotiated a new agreement stipulating no plants would be closed or idled.

But the day after Thanksgiving, GM announced it was planning to close its assembly plant in Lordstown, OH. The UAW sued to stop the closing and filed grievances under the contract then in effect. The lawsuit was withdrawn as part of the GM-UAW settlement in 2019, and GM sold the plant. The grievances, which were independent of the lawsuit, continued and an outside arbitrator sided with the union in 2023, but by then GM Lordstown had been closed for almost four years.

“The victories we won last year in our Stand-Up Strike at the Big Three weren’t suggestions,” Fain says. “They were binding commitments in a union contract, and we as the UAW intend to enforce that contract to the fullest extent.

“I find a pathetic irony in the fact that Stellantis is now, for the first time, citing ‘market conditions’ as their reason for attempting to break their promises to Belvidere and auto workers in America. It is always ‘market conditions’ when they have to stiff an autoworker or close a plant. It’s never ‘market conditions’ when they want to raise CEO pay by 56 percent. Carlos Tavares is telling the American autoworker, ‘Market conditions for thee, but not for me,'” the UAW president says.

Tavares and Stellantis say they are abiding by the current contract, but circumstances change.

"To ensure the Company’s future competitiveness and sustainability, which are necessary to preserve U.S. manufacturing jobs, it is critical that the business case for all investments is aligned with market conditions and our ability to accommodate a wide range of consumer demands,” the company says in a statement.

"The Company has not violated the commitments made in the Investment Letter included in the 2023 UAW Collective Bargaining Agreement and strongly objects to the Union’s accusations. In fact, the UAW agreed to language that expressly allows the Company to modify product investments and employment levels. Therefore, the Union cannot legally strike over a violation of this letter at this time," the statement adds.

The language cited by Stellantis has opened a rift in the union’s ranks with Fain, who claims UAW Vice President Rich Boyer had not gone far enough to enforce the 2023 contract. Boyer, who was demoted last spring and denies Fain’s accusations, won a seat on the UAW executive board in 2023 in the first-ever vote by rank-and-file members for top officers.

Boyer’s complaints are being investigated by the union’s court-appointed monitor, who is reviewing emails Boyer and Fain exchanged. The review is still pending, but the monitor has chastised the union for failing to turn over documents and, in a separate study, notes the Fain administration has done little to rid the UAW of its “authoritarian culture,” which has split the union’s executive board.

The UAW does have one target of opportunity in Sterling Heights, where the company is planning for the launch of the new Ramcharger battery-hybrid pickup truck in the first quarter of 2025.

Art Wheaton, a Cornell University labor expert, says in an email: “Unfortunately it will likely take a strike, arbitration or court decision to make a solid determination (on Belvidere). The UAW thinks they have solid language (on their side) but there is a long history and thousands of arbitration cases specifically about contract interpretation.“We shall soon find out if there is a strike,” he says, but adds, “Arbitration and court cases can take years.”