On September 15, 2023, members of the United Auto Workers (UAW) participated in a solidarity rally when the UAW attacked the three major automakers in Detroit, Michigan.

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DETROIT – Latest contract proposals from automakers star People familiar with the matter told CNBC that the proposal to the United Auto Workers union could lead to the closure of 18 factories in the United States, but it could also bring new investment and repurpose an idle auto assembly plant in Illinois.

Sources said the plans could affect thousands of UAW members, shrink the automaker’s footprint in North America and create a new “modern” parts and distribution network, but company and union leaders are divided.

A focus of the plan is the possible closing of 10 Mopar parts and distribution centers scattered across the country to consolidate them into larger “Mopar”AmazonThe sources said they spoke on condition of anonymity because the talks are private and ongoing. The proposal includes a potential “mega-centre” at Belvidere Assembly, which the carmaker idled indefinitely in February.

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Other manufacturing plants included in the proposal include the Tipton Transmission Plant in Indiana; the partially decommissioned Trenton Engine Complex and engines that have been idled, three sources said Mount Elliott Tool & Die, Michigan; and the vacant Belvedere Council. Also included are Detroit warehouses, office space, and the automaker’s North American headquarters and technical center, a massive 500-acre campus in metro Detroit that formerly served as Chrysler’s world headquarters.

The final proposal involving its North American headquarters comes as companies adapt to remote or hybrid work and try to realign their physical footprints in the wake of the coronavirus pandemic.

This sign is located outside the FCA US LLC headquarters and technical center in Auburn Hills, Michigan, which was renamed Stellantis on January 19, 2021.

Jeff Kowalski | AFP | Getty Images

Stellantis said it hopes to have most of its salaried employees working remotely most of the time by 2021, including 17,000 employees in North America at the time. In line with these plans, the company confirmed it is “evaluating the way we work to enable our team to be the most innovative, creative and efficient we can be. This analysis includes potential adjustments to our real estate portfolio.” Strandi Si said the facility will “continue to serve as our North American headquarters and North American technology center.”

There is no guarantee that the facilities will be closed under the labor agreement; however, a company source said Stellantis needs to include the possibility of closing or selling any locations where UAW members work.detroit free press 2022 report The company could lease part of the headquarters building.

The 18 potential plant closures are part of Stellantis’ proposal to the union Thursday night to launch a targeted strike against the Detroit automaker when its contract expires at 11:59 p.m. Thursday. Negotiations between Stellantis and the UAW resumed Monday morning.

Stellantis also included a testing site in Arizona in the proposal, but said any sale would continue operations, two sources said.

Belvedere Council

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Two sources said the two sides also had discussions about using part of the Belvedere plant, a nearly 5 million-square-foot plant, to make battery components for electric vehicles.

Stellantis North America chief operating officer Mark Stewart, who is overseeing UAW negotiations, said the company needs to “modernize” its Mopar facilities. He gave no specific details but said the plans would not affect employment.

“We need to invest in Mopar,” Stewart said during a media roundtable on Saturday. “In many cases, it doesn’t make sense to make these investments where they are.”

Stewart gave no details of the plan but described the company’s proposal for Belvidere as a “very compelling offer”. However, he said that was dependent on the union agreeing to a tentative deal before the strike.

“So we’re going to have to revisit all of these projects, but the solution to that was very compelling and was rejected,” he said on Saturday.

Stellantis’ most recent proposal to the UAW includes a nearly 21 percent pay increase over the life of the contract, including an immediate 10 percent raise, and the termination of pay grades for certain workers, in addition to other bonuses and benefits. The benefits in the proposal are consistent with other offers from General Motors and Ford.

UAW Vice President Rich Boyer speaks to union members during a Unity Sunday rally on August 20, 2023 in Warren, Michigan.

Michael Weiland/CNBC

UAW Vice President Rich Boyer made it clear that the Belvedere plant is an existential issue. He even encouraged the crowd at a rally with Vermont Sen. Bernie Sanders on Friday to chant “bulls***” over the Detroit automaker’s offer.

“I want the world to hear this: This is about the working class. This is about the rich and the poor, and we are tired of having nothing,” Boyer, who is leading the Stlantis negotiations, told the rally.

Mopar

The company’s current proposal is to build new Mopar plants in Fishkill, N.Y., and Macon, Ga., according to two sources, and move work from several plants in Michigan to a special plant southwest of Detroit. Renton North Factory.

Mopar facilities that may close include Atlanta PDC; Boston PDC; Centerline Warehouse and Packaging; Chicago PDC; Marysville PDC; Milwaukee PDC; New York PDC; Orlando PDC; Sherwood PDC; and Warren PDC.

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Mopar is a combination of motors and parts that was formed nearly a century ago. Stellantis said it has 20 Mopar parts and distribution centers in the United States and that the division employs more than 2,000 people.

Mopar is a major area of ​​growth expected by Stellantis’ predecessor Fiat Chrysler, which has plans for employee and facility growth. But those sites were built before Amazon’s big push for large fulfillment centers changed the scale of operations at many of them.

Stellantis’ proposal also includes eliminating pay grades within the Mopar division. Salaries for these employees currently range from $17 to more than $30 an hour. The offer also includes a moratorium on selling or spinning off Mopar businesses during the four-year term of the agreement.

“We are taking this seriously and responsibly, and we are working hard to find creative solutions to every problem. We listen, and we continue to listen. We continue to bargain in good faith,” Stewart said. “It’s really a win-win. You know, it’s not about the war.”

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