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Stellantis’ American autumn will be very hot, all the details

2 months ago babelfish

Stellantis' American autumn will be very hot, all the details

The Uaw, the powerful American union that last year paralyzed the Stellantis plants for several weeks, is back in charge and accuses the management of not keeping the agreements signed to return the workers to the factories. Facts and insights

“As the costs of the ongoing UAW strikes against Stellantis continue to rise, the Company has decided to cancel scheduled exhibits and presentations at CES 2024, the world's largest technology trade show, scheduled for January 2024 in Las Vegas, Nevada.” . It was last October 17th and Stellantis, besieged by the main American trade union in the automotive world, even had to withdraw from the following year's Ces, that is, give up the main hi-tech showcase which in recent years has become a stage for two- and four wheels.

The "prank" of Shawn Fain , leader of the US union United Automobile Workers, the only one to have managed to simultaneously paralyze three car manufacturers (in addition to the Group created from the merger between FCA and PSA, the lockouts of dozens and dozens of factories also involved Ford and General Motors) had had a significant impact on Stellantis' accounts.

THE (NEGATIVE) NUMBERS OF STELLANTIS

Stellantis had in fact made 50,000 fewer deliveries in September and October 2023 due to strikes at various factories in the USA. Official numbers, communicated in the same period by Natalie Knight , financial manager of Stellantis, during the conference call with analysts, understandably alarmed by what was happening on the assembly line.

The interruptions to activities had had decidedly negative repercussions on net revenues of around three billion euros through the end of October, compared to what had been forecast by the company in its production plans. The cost of the strike for Stellantis in terms of operating profit was approximately 750 million euros, as the CFO had always explained to investors.

INCREASES AND SAVED FACTORIES: THE AGREEMENT BETWEEN STELLANTIS AND THE US UNIONS

To these losses were then added the costs of the contractual defeat suffered by the management. The agreement signed to bring the plants back into operation restored key entitlements lost during the 2007 recession, including cost-of-living allowance and three-year salary progression, as well as eliminating pay splits between young and old . “We have achieved what we were told was impossible to achieve only a few weeks ago,” the Uaw leader – and fuse of the protest – Fain announced victorious upon the return of the workers to the factory.

The agreement provided for base salary increases of 25% until April 2028 and will increase, thanks to the revaluation mechanism, cumulatively by 33%, to more than $42 an hour. In detail, wages for the lowest-paid entry-level workers had increased by 67%, exceeding $30 an hour. Stellantis' lowest paid workers, i.e. temporary workers, will overall enjoy a raise of more than 165% over the life of the agreement. Some workers received an immediate 76% raise upon ratification.

The multinational had also agreed to reactivate, by localizing the production of a medium-sized truck, the assembly plant in Belvidere, Illinois, closed at the beginning of 2023 after having built Chrysler products for over half a century.

“We saved Belvidere – the number 1 of the Uaw announced -. We got a new vehicle for the factory and will have two shifts. In addition to the vehicle commitment, Stellantis will also add more than 1,000 jobs at a new battery plant, also in Belvidere.” For Stellantis this represented the need to find 1.5 billion to invest in the site which would have been added to the over 3 billion for various gigafactories for electric mobility promised to its employees.

NEW STRIKES IN VIEW?

Now, about a year after those protests, Fain, who recently defined the CEO of Stellantis, Carlos Tavares , as "a shame and an embarrassment for a once great American company", is threatening more strikes.

The reason for the dispute? Precisely the agreements signed last year to put an end to the lockout (which is why we have reproduced them in full). In short, the Uaw accuses Stellantis of having made fun of it and of being behind schedule.

STELLANTIS' REPLY TO THE UAW

Stellantis made it known that it had notified the union that its investment plans in Belvidere will in fact be delayed, underlining however that it does not want to disregard the agreements: “[Stellantis ed.] has not violated the commitments undertaken in the investment letter included in the collective agreement Uaw 2023 and firmly opposes the union's accusations", the company immediately announced in a statement in the hope of defusing any possible discontent in the bud.

AMERICAN STUFF ACHES FOR STELLANTIS

Also because a strike now, in the midst of the election campaign, could be detrimental to the Italian-French-American manufacturer. Already last year, US President Joe Biden also intervened in the negotiations, expressing his solidarity with the working class and supporting the need to find a solution as soon as possible for the drafting of the new collective labor agreement.

Now that every issue is magnified by political propaganda, the brand risks finding itself exposed to the barrage of the Democratic candidate, Kamala Harris , and the Republican rival, Donald Trump , in constant search of consensus.

And that's not even the only issue Stellantis will face in the United States. For some American shareholders , Carlos Tavares would have artificially inflated the share price for much of 2024 by making “extraordinarily positive” assessments on inventories, pricing power, new products and operating margin. All numbers denied by the disappointing quarterly report. Hence an unprecedented class action on which US justice will be called upon to express its opinion.

Also in the USA, CEO Tavares has recently created quite a bit of friction with the working class with the announcement of the dismissal of 2,450 employees from the Warren Truck assembly site , outside Detroit, where the group is about to conclude production of the Ram 1500 Classic . There are so many fronts for Stellantis and the car giant now knows that it is better not to anger the unions. At least the ones across the ocean.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/uaw-stellantis/ on Wed, 21 Aug 2024 07:53:18 +0000.