Stellantis Confronts Unprecedented UAW Strikes One Year After National Walkout, Reports Reuters

By Nora Eckert

DETROIT – The United Auto Workers (UAW) union is preparing for possible strikes against the French-Italian automaker Stellantis, about a year after a national walkout that resulted in significant losses for the Detroit Three automakers and affected around 50,000 workers.

UAW President Shawn Fain accused Stellantis of violating contract commitments and announced that several local chapters of the union are working towards strikes that could potentially paralyze the company’s operations.

These threats come on the heels of the six-week strike last year, which inflicted approximately 750 million euros in profit losses on Stellantis. The UAW also targeted General Motors and Ford during the unprecedented walkout in 2023, a strike that drew U.S. President Joe Biden to support the workers on the picket line.

Stellantis’ operations in North America have faced challenges, and the looming threats of strikes coincide with the intense presidential race between Democrat Kamala Harris and Republican Donald Trump, with Harris receiving union endorsement.

It is uncommon for the UAW to initiate strikes outside of regular contract negotiations, and a significant walkout at Stellantis just a year after the last labor agreement, especially in an election year, would be unprecedented.

"The union is strategically focusing on Stellantis as the North American division is likely at its most vulnerable," stated Sam Fiorani, vice president at AutoForecast Solutions.

On Tuesday, Fain revealed that 28 local chapters representing tens of thousands of workers have filed grievances against Stellantis, with 18 locals nearing votes for strike authorization, including at least one expected to happen in the upcoming days. Fain, who has taken a more assertive approach as union leader since his election in 2023, has reinvigorated the union’s leadership.

While the specifics of the first strike vote are yet to be determined, grievances have come from locations in Toledo, Ohio; Kokomo, Indiana; and various sites in Michigan. The union claims that about 98% of Stellantis’ members are affected by these grievances, making the potential strikes highly impactful.

In response to the union’s actions, Stellantis stated that the union leadership had not provided any substantiating information or evidence for their claims. The company criticized Fain’s public comments as harmful and unproductive, advocating instead for respectful and constructive dialogue to resolve the issues at hand.

Fain countered in a letter that Stellantis, under CEO Carlos Tavares, is becoming a "global case study in corporate mismanagement," while offering dates for discussion.

The grievances focus on product and investment commitments from the previous autumn’s contract negotiations. Concerns include delays in a significant multibillion-dollar investment for a new battery plant and factory in Illinois, along with fears surrounding potential production relocations for the Dodge Durango SUV.

While Stellantis has yet to confirm any such moves for the Durango, the union asserts that the company has not denied the possibility of shifting production elsewhere.

The labor agreement between the UAW and Stellantis allows the company to postpone financial commitments if market conditions deteriorate.

Challenges in the U.S. Market

Stellantis has faced difficulties in the U.S. market over the past year, with dealers and shareholders openly expressing concerns about sluggish sales, excessive inventories, and decreasing stock prices. Tavares has indicated a commitment to enhance Stellantis’ performance in the U.S. and is open to discontinuing unprofitable brands globally. His recent visit to the U.S. was aimed at developing a strategy to improve operations.

Despite these issues, Stellantis reportedly has higher vehicle inventories than a year ago, which may cushion any immediate impacts of a strike. As of the end of August, the company held a supply of 77 days’ worth of vehicles, an increase from the previous year.

However, the UAW could target facilities that produce in-demand vehicles, such as Jeep SUVs, potentially allowing for more focused strike actions that would minimize financial strain on the union while still making a significant impact.

Such a strike would likely capture national attention, especially leading up to the impending U.S. elections, with Michigan being a critical battleground state.

While Fain mentioned that the union secured the right to strike over product and financial points in last year’s negotiations, the validity of such actions could face challenges in court.

A strike authorization does not guarantee that a strike will take place.