In recent weeks the U.S. auto industry has been characterized by one of the biggest conflicts in history. We are talking, of course, about Stellantis and the UAW United Auto Workers union, which are in constant confrontation. All events, starting with Stellantis’ alleged contract violations, resulting in denials, strike threats, and heavy-handed business decisions, are keeping the entire U.S. state with bated breath as to what will happen in the future.
Now, the UAW is urging Stellantis workers to support the strike. The union claims that Stellantis is not keeping its promises on products and investments. And there we can now publicly read the letter written by Fain to request strike approval to Stellantis members.
A head-on clash between Stellantis and UAW
The tension between the United Auto Workers (UAW) and Stellantis, is gradually reaching a climax. UAW President Shawn Fain recently issued a call to all its members to prepare for a possible strike. This act, would be in response to actions performed by Stellantis, which the union considers a breach of contract. Specifically, Fain and Kevin Gotinsky, who would be the director of the union’s Stellantis department, drafted a letter last Friday, dated Sept. 27, in which all grievances were expressed.
All are particularly relevant to the dispute, such as concerns over job security. In addition, other factors that are causing a stir within the union include the temporary closure of the famous Belvidere, Illinois plant and the week-long reduction of a shift at the Warren, Michigan plant. Finally, the company has also failed to provide concrete guarantees regarding the future of Dodge Durango production. All of this is fueling fears out of all proportion.
Unfulfilled contract commitments and the risk of strike action
In addition to all the problems we have already listed, the UAW also accuses Stellantis of not keeping agreements from previous contract negotiations at all. Going into detail, it refers to the lack of investment in the U.S. plants, and the guarantee of jobs for employees. The union believes that such a situation only jeopardizes the survival of thousands of families, with jobs threatened by declining production in America.
Now, we know full well that a potential strike could generate high-level repercussions in many ways. Stellantis, for example, could suffer very significant economic damage caused by slowing down and stopping production of its vehicles in America. On the other hand, we see that for the UAW, too, the situation is rather complicated, since in the event of a strike, it would be the union itself that would be responsible for financially supporting all members who join the strike.
The current situation may not initially be relevant for Stellantis
However, the current situation may not generate an immediate negative impact to Stellantis’ sales numbers. And for what reason? Because the factories currently have high inventory levels of the cars produced. Consequently, the impact of a strike would not be immediate for the automotive group. Instead, the focus would be shifted more to suppliers and the possibility that Stellantis decided to relocate even more production. This could also happen, as the automotive group might decide to shift production to places where the economic impact is less, such as Canada and Mexico. Factor that would make the situation even worse for the United States.
The UAW appears determined to continue with the strike
During the past few days, some 200 UAW locals have been meeting to discuss what the union believes would be serious violations of the contract and the various behaviors that have been implemented by Stellantis so far. This letter that Fain and Gotinsky drafted for Stellantis members was written in a way to urge promptness and solidarity for the union to resolve the situation. Chairman UAW is quite adamant on this front, having stated that CEO Carlos Tavares, continuing in this way, will steer Stellantis on a collision course that could cause enormous and permanent damage.
Presently, although the union is lobbying hard to authorize the strike, the exact timing of when it should follow has not yet been confirmed. Also to be pointed out is that even if the strike were to be authorized through a vote of the members, it is still not certain that it can be done. This situation would simply work in favor of the union, which would gain more leverage for negotiations with Stellantis.
UAW representatives submit complaints and Stellantis responds
The UAW union president also confirmed that several representatives of his union had already filed various complaints and charges against Stellantis. This would take place at the National Labor Relations Board. In response to these charges, Stellantis argued that the union cannot exert pressure by threatening a strike over disputes that relate only to investments.
With reference precisely to the investments that have been made, Stellantis commented that those in Kokomo, Indiana, were not considered in the right way by the union.
Stellantis-Fain clash risks triggering a global crisis
Moreover, Stellantis’ final response was quite firm. The car manufacturer stated that investments and its timing cannot be absolutely guaranteed, contrary to what Fain claims. They in fact, may depend on numerous factors, such as the conditions in which the market presents itself and its constant changes.
It remains in the balance for the time being, with the potential to generate implications for the entire global auto industry. It may happen that several car manufacturers, may be confronted with similar demands from their core unions, causing further general discontent. Then again, handling a strike would be very complicated, with potential consequences that would certainly be negative for both sides of the dispute.