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UAW, Stellantis reach tentative deal to end strike, Illinois plant may reopen, sources say

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The United Auto Workers on Saturday expanded its strike against General Motors (GM.N) to include its Spring Hill, Tennessee, engine plant, a move that could stall GM’s large pickup production and increase its financial pain.

“We are disappointed by GM’s unnecessary and irresponsible refusal to come to a fair agreement,” UAW President Shawn Fain said in a statement to Reuters.

The expansion of the seven-week strike at GM came on the same day the union reached a tentative labor deal with Chrysler-owner Stellantis (STLAM.MI). “We look forward to welcoming our 43,000 employees back to work and resuming operations,” the company said.

Ford (F.N) has also reached a tentative contract accord with the union that provides record wage increases.

At GM, people familiar with the bargaining said sticking points in the UAW negotiations include retirement benefits and issues related to temporary workers. GM has more retirees than either Ford or Stellantis.

The UAW is already striking at GM’s Arlington, Texas, assembly plant, which makes the Chevy Tahoe and Suburban and Cadillac Escalade. GM said earlier this week that this walkout was costing it $200 million a week.

With GM’s workers at Spring Hill joining the strike, about a third of the 150,000-member UAW will have walked off the job at some point during the union’s campaign.

The deal with Stellantis secures record wages and benefits for workers and follows a template set just days ago by UAW and Ford, including a 25% wage hike over the 4-1/2-year contract.

U.S. President Joe Biden praised the tentative Stellantis agreement, saying in a statement the “contract is a testament to the power of unions and collective bargaining to build strong middle-class jobs.”

The deal includes an agreement to reopen the car maker’s assembly plant in Belvidere, Illinois, which will now build midsize trucks, Fain said in a video post on social media. The trucks could compete against Ford’s Ranger and GM’s Chevrolet Colorado and GMC Canyon models.

Stellantis’ Belvidere factory was shuttered earlier this year leaving 1,300 workers without jobs. The factory, which became a rallying point for the union’s bargaining campaign, will reopen contingent on expected state and local tax incentives, sources familiar with the situation said.

In addition, Stellantis agreed to build a battery plant next to the existing Belvidere plant, UAW Vice President Rich Boyer said in the video address.

Stellantis will also keep open an engine manufacturing complex in Trenton, Michigan, and a machining operation in Toledo, Ohio, Boyer said.

In all, the automaker has committed to $19 billion in new investments in U.S. operations and the creation of 5,000 additional jobs where previously it planned to cut 5,000 jobs, Fain and Boyer said.

“We turned it all the way around,” Fain said.

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United Auto Workers President Shawn Fain greets UAW autoworkers, at the Stellantis Sterling Heights Assembly Plant, to mark the beginning of contract negotiations in Sterling Heights, Michigan, U.S. July 12, 2023. REUTERS/Rebecca Cook/File Photo

File photo: A general view of Stellantis’ Belvidere Assembly Plant, in Belvidere, Illinois, U.S., June 27, 2023. REUTERS/Bianca Flowers/File photo