Stellantis, the parent company of Chrysler, is set to construct a new USD 3.2 billion battery plant and allocate USD 1.5 billion towards establishing a mid-size truck factory in Illinois. This significant move follows the tentative labor agreement reached by the United Auto Workers (UAW) union, which aims to enhance workers’ pay, retirement benefits, and more. The agreement will be effective until April 2028 and will undergo a ratification vote lasting two weeks, as approved by the union’s leaders.
Affordable vehicle options for hourly employees
As part of the agreement, Stellantis will introduce a company-subsidized lease program for its hourly workers, making it more economical for them to drive new vehicles, akin to programs offered by other U.S. automakers for their white-collar staff. Stellantis, however, has chosen to withhold its comments until the deal is ratified by the workers.
Incentives from competing automakers
In a bid to stay competitive, Ford is providing its production workers with a $1,500 voucher, which they can apply towards purchasing a new vehicle.
Investment plans and plant reopening
Stellantis’s investment strategy includes persuading the reopening of the Belvidere assembly plant in Illinois, which ceased operations in February. In 2027, the facility is expected to commence production of 80,000 to 100,000 mid-size trucks, and a battery plant valued at USD 3.2 billion, through a joint venture partner, is set to open in 2028.
Additionally, Stellantis has allocated USD 1.5 billion for its Toledo Jeep operations, including the production of an electric Jeep Wrangler in 2028. The automaker is also investing USD 3.5 billion across three assembly plants in Michigan, with a portion designated for updating the Dodge Durango and Jeep Grand Cherokee, including electric versions by 2026 and 2027.
Stellantis’s investment focus in North America remains centered on trucks and SUVs, with plans encompassing both gas-powered and electric versions up to 2028.
Worker buyouts and conversion to permanent employees
Stellantis will provide $50,000 buyouts in 2024 and 2026 to UAW production workers, affording the company the opportunity to hire new employees at lower wages. Conversions from temporary to permanent employment status will also take place, with around 3,200 temporary workers set to transition within the first year. Subsequently, full-time status will be granted automatically after nine months of service.
Additional bonus for workers
For employees who were on strike or faced layoffs during the work stoppage that began in mid-September, the tentative agreements with Stellantis, General Motors, and Ford include an extra ratification bonus of approximately USD 110 per day, in addition to the USD 5,000 bonus hourly workers will receive on ratification and an immediate 11% pay increase.