(Bloomberg) -- The president of the United Auto Workers spent part of a Democratic National Convention address accusing Stellantis NV of trying to renege on a contract that ended a six-week strike last fall, as the union threatened another national walkout.
Shawn Fain, who won record contracts from Stellantis and its Detroit peers after President Joe Biden joined union members on the picket line, called out the company during the opening night of the convention in Chicago. The UAW said ahead of the speech that Stellantis was trying to back out of reopening an idled assembly plant in Belvidere, Illinois.
“Stellantis must keep the promises they made to America in our union contract,” Fain said on stage, wearing a red T-shirt emblazoned with the message “Trump is a scab” beneath the union’s logo. “The UAW will take whatever action necessary at Stellantis or any other corporation to stand up and hold corporate America accountable.”
Stellantis confirmed in a statement Tuesday it had notified the union that plans for the Belvidere factory will be delayed, though the company said it’s standing by commitments made in a letter included in last year’s agreement.
“The UAW agreed to language that expressly allows the company to modify product investments and employment levels,” Stellantis said. “Therefore, the union cannot legally strike over a violation of this letter at this time.”
The company’s US-listed shares rose less than 1% at 9:30 a.m. Tuesday in New York. The stock plunged 30% this year through Monday.
The UAW announced ahead of Fain’s address that Stellantis had informed the union it won’t open an auto-parts hub in Belvidere this year. The union also said the company won’t begin stamping operations at the facility in 2025, or start producing a mid-size truck there in 2027, as was agreed last fall.
Biden championed the deal during a visit to Illinois in November. Stellantis also is among the companies that’s received support from the administration to convert at-risk or shuttered factories into plants making electric vehicles and their components, with the Belvidere facility getting awarded $334 million.
Stellantis, formed from the 2021 merger of Fiat Chrysler and France’s PSA Group, has seen its sales and market share plunge over the past year after aggressive price increases and an aging lineup left its vehicles competitively disadvantaged.
The company’s problems came into sharper focus last month, when it reported a 48% drop in net income for the first half of the year. Chief Executive Officer Carlos Tavares, who’s also contending with bloated inventory and a string of executive departures in the US, has been laying off auto workers in Michigan and Ohio and offering buyouts to salaried employees at the company’s US headquarters in Auburn Hills, Michigan, while outsourcing engineering jobs to lower-cost countries like Brazil, Mexico and India.
The UAW represented roughly 43,000 UAW Stellantis employees at the end of 2023.
--With assistance from Peter Vercoe.
(Updates with share trading in the sixth paragraph.)
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