Stellantis idles Illinois plant and steps toward closure

DETROIT (AP) — Stellantis nears the closure of its plant in Belvidere, Ill., as it prepares for the costly transition from internal combustion vehicles to electric vehicles.

The plant, which now employs around 1,350 workers, was officially put on “inactivity” by the company on Tuesday. This term means that he intends to close the plant.

Belvidere’s future is likely to be a lightning rod in nationwide contract negotiations coming this summer with the United Auto Workers union, which could lead to a painful strike.

In a statement Tuesday, the UAW said the decision to idle the plant will not go unchallenged.

“This economic dislocation is a choice made by Stellantis to reap even higher profits,” union vice president Rich Boyer said in a statement. “We will highlight their corporate greed to workers, the community, taxpayers and consumers.”

In a meeting with reporters on Tuesday, Carlos Tavares, CEO of the company formed from the merger of Fiat Chrysler and France’s PSA Peugeot, said Stellantis was “looking for solutions” for Belvidere, which no longer has a new vehicle. to build. The latest Jeep Cherokee small SUV rolled off the factory assembly line on Tuesday.

The company, Tavares said, is executing a transformation toward electric vehicles, which are 40% more expensive to manufacture than those powered by internal combustion engines. Stellantis, he said, cannot pass the increased costs on to consumers because many would not be able to afford new cars. It also cannot sell electric vehicles at a loss, so it is left to absorb the additional costs.

“We have to adapt to this new world,” Tavares said. “The reality of market transformation is the reality we have to face.”

He said the company was not asking for specific concessions from the Belvidere plant. “It’s a global problem. It’s not a Belvidere problem,” he said.

Stellantis, Tavares said, needs to optimize its manufacturing and distribution footprints. “If we don’t fix it, everyone will be in trouble,” he said.

But UAW President Ray Curry said the company’s “misguided decision” would disrupt lives, uproot families and ripple through the regional parts supply chain network. Shawn Fain, his opponent in a UAW leadership election that is ending soon, said the union should have enforced clauses in its contract that prevent factories from closing.

The union said it negotiated, and Tavares said the company agreed to, retirement packages as well as voluntary layoffs and pre-retirement leave for workers. It is also working on relocating interested workers, according to the UAW statement. The union says about 2,300 employees are affected.

The Belvidere plant could end up making Stellantis the leader of the contract negotiations which will open this summer with the three Detroit automakers. As a potential warning to automakers, the union last week increased strike pay from $400 to $500 a week.

Over the past two years, the UAW has become more aggressive against employers as workers have become scarcer. He went on strike against CNH Industrial, Deere & Co., the University of California system and Volvo Trucks for bigger pay raises and other benefits.

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