By David Shepardson and Abhijith Ganapavaram
(Reuters) - Stellantis (NYSE:STLA) said on Tuesday its planned investments at Belvidere, Illinois, will be delayed but insisted it is committed to moving forward and is not in violation of its union contract.
On Monday, the United Auto Workers union said some of its local units representing tens of thousands of workers at Stellantis were preparing to file grievances and could launch a nationwide strike, accusing the automaker of failing to honor production commitments.
Chrysler parent Stellantis said on Tuesday it had told the UAW of the delay "but firmly stands by its commitment," saying the new timetable is needed "to ensure the company’s future competitiveness and sustainability."
The contract includes language that Stellantis product investments are "contingent upon plant performance, changes in market conditions and consumer demand."
Stellantis agreed to build a new $3.2 billion battery plant, invest $1.5 billion in Belvidere to build new mid-size trucks by 2027 and a $100 million parts distribution center in 2024, the UAW and automaker said.
The overall deal includes $18.9 billion in new investments by Stellantis and a pledge to add 5,000 total U.S. jobs by 2028, the UAW said in November 2023. Stellantis declined to disclose any new timetable on Tuesday.
UAW President Shawn Fain said in a statement on Tuesday the investment plans are "binding commitments in a union contract, and we as the UAW intend to enforce that contract to the fullest extent."
"They say they want to 'delay' reopening Belvidere Assembly but they really want to kick the can past our contract expiration so they can suddenly cite 'market conditions' again and never open this plant," Fain said.
He raised the issue in a speech at the Democratic National Convention in Chicago on Monday night.
"Let me be clear: Stellantis must keep the promises they made to America and our union contract. And the UAW will take whatever action necessary at Stellantis or any other corporation to stand up and hold corporate America accountable," he said.
Last month, the U.S. Department of Energy said it planned to award Stellantis $334.8 million to convert the shuttered Belvidere plant to build electric vehicles and $250 million to convert its Indiana Transmission Plant in Kokomo, Indiana, to produce EV components.
The Energy Department told Reuters it held negotiations with all winners and noted the awards were not final. "Through the process DOE reserves the right to cancel negotiations and rescind the selection for any reason during the negotiations," the DOE said.
Earlier this month, Stellantis said it was laying off as many as 2,450 factory workers from its Warren Truck assembly plant outside of Detroit as it ends production of the Ram 1500 Classic truck.