Stellantis Sues UAW Over Strike Threat

By David Shepardson and Ben Klayman
WASHINGTON/DETROIT (Reuters)

Chrysler parent Stellantis (NYSE:STLA) has filed a federal lawsuit against the United Auto Workers (UAW), claiming the union violated the contract by threatening to strike over delays in planned investments.

The lawsuit, filed in the U.S. District Court in the Central District of California, seeks a declaration that the decision by a local union in Los Angeles to vote on strike authorization breaches the terms agreed upon last fall.

Stellantis is holding the UAW and the local union chapter accountable for any potential loss of revenue and damages caused by production interruptions should a strike occur.

Recently, a supermajority of UAW members at Stellantis’ Los Angeles Parts distribution center voted to request strike authorization if a grievance regarding planned company investments is not resolved.

UAW President Shawn Fain has claimed that the company breached the contract by retracting its investment commitments. However, Stellantis argues that such investments were always conditional on market circumstances, stating that demand for electric vehicles has declined since the contract was signed.

The company’s lawsuit asserts, “The UAW acted in bad faith by disregarding this language, filing sham grievances, and calling a strike authorization vote to pressurize Stellantis into proceeding with planned investments.” The UAW had no immediate comment on the lawsuit.

In 2023, Stellantis committed to investing $1.5 billion in its Belvidere, Illinois assembly plant for new mid-size trucks by 2027, which is part of a broader $19 billion investment strategy.

In August, Stellantis acknowledged it was delaying some investments due to economic conditions but asserted it remains committed to its plans, emphasizing the need for a new timeline to ensure future competitiveness and sustainability.

Stellantis also noted that the contract stipulates that product investments are “contingent upon plant performance, changes in market conditions, and consumer demand.”

In August, the UAW indicated some of its local branches, representing tens of thousands of Stellantis workers, might file grievances and could initiate a nationwide strike, accusing the automaker of not honoring production commitments.