Stellantis accuses UAW of proposing new jobs bank, linking effort to Chrysler bankruptcy

Posted by Admin October 7, 2024 Jobs

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Stellantis says it’s rejecting a proposal by the UAW to set up a “jobs bank” for employees affiliated with the idled Belvidere Assembly Plant, linking the effort to the kinds of actions that had led to the 2009 Chrysler bankruptcy.

The automaker, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, said it had met with the union on Saturday after filing eight new lawsuits against the UAW and 23 local unions the day before as the two sides intensify their battle over a potential national strike by the UAW.

The company said in a statement Monday that it would see the litigation through to its conclusion if necessary and “hold the UAW and its locals responsible for lost revenue, which could amount to tens of millions a day and other damages resulting from lost production due to an unlawful strike.”

The union has been amping up its messaging about a potential strike in recent weeks with statements and rallies, including one last week in Sterling Heights.

The union has filed grievances against the company and charges with the National Labor Relations Board and is urging its members to vote in favor of a strike as it pushes its case that the company is failing to live up to the commitments it made in the contract negotiated last year, a position the company rejects.

Chief among those issues is the state of the Belvidere plant, which was expected to reopen with production of a midsize pickup. The company says it has simply delayed the reopening, although the union says that the envisioned delay would push that beyond the reach of the contract, making the commitment moot.

The union was asked for comment Monday on the latest company statement related to a jobs bank. The company’s choice to raise the specter of the 2009 bankruptcy highlights the seriousness of the messaging battle.

The company said the union had proposed “what amounts to a reinstatement of the jobs bank” for employees in Belvidere as well as 900 who had transferred from there to other Stellantis locations. The company said it was rejecting the proposal because it would “revert to prebankruptcy terms and conditions that would jeopardize the company’s future.”

More: UAW members rally in Sterling Heights over Stellantis job cut concerns

The company noted that “the Jobs Bank, established by GM in the mid-80s and adopted by Ford and Chrysler due to pattern bargaining, generally prohibited the Detroit automakers from laying off employees. By the 2000s, Chrysler had over 2,000 employees in the Jobs Bank at a staggering cost. These employees were on active payroll, but were not allowed to perform any production work.”

Marick Masters, professor emeritus and labor expert at Wayne State University, described the suggestion of a new jobs bank as a perplexing twist.

“It doesn’t make any sense to me why (the union) would do this at this point in time,” he said.

The idea of a jobs bank, given its history, would likely antagonize the company, he said, and would seem to be at odds with what the union is ostensibly trying to accomplish.

More: Stellantis lowers profit outlook for 2024, plans more inventory cuts in US

“The jobs bank was one of several items that contributed to the company’s fiscal distress” leading up to the bankruptcy, he said.

Masters described the new lawsuits as a clear escalation in the battle between the two sides. He noted that the union is very assertive about its right to strike over the commitment issues, but he said the contract language “just seems to give the company a great deal of flexibility.”

In a written comment, Masters said, “The specific language in the (memorandum of understanding) on which the company relies for this claim provides that the stipulated investments are contingent on ‘approval by the Stellantis product allocation committee and … upon plant performance, changes in market conditions and consumer demand continuing to generate sustainable and profitable volumes for all of the U.S. manufacturing facilities’ listed in the MOU.”

But both sides appear heavily invested in seeing it through, and “it could clearly end up being a contest of wills,” Masters said.

Stellantis, in its statement, referenced the “highly volatile market” and slowing electric vehicle adoption, and Masters noted that “more broadly, this dispute illustrates how intimately the union’s future is tied to the transition to electric vehicles in a relentlessly competitive industry with the global center of gravity shifting away from the U.S.”

The company’s lawsuits began last week.

Stellantis sued the UAW and Local 230, which represents workers at the Los Angeles Parts Distribution Center, in federal court in California on Thursday, accusing the union of filing “bad faith grievances” and ignoring contractual language that gives the automaker leniency in its future production decisions as it moves toward strike authorization votes.

The union pushed back in a letter from UAW President Shawn Fain and Kevin Gotinsky, director of the union’s Stellantis Department, accusing the company of a misinformation campaign:

“For days, they’ve been spamming our phones with messages about how harmful a strike would be,” the letter stated. “They filed a lawsuit against our union, and against UAW Local 230, the first Stellantis local to vote to authorize a strike. The company also sent letters threatening legal action to all of our locals, adding the insult of calling our grievances a ‘sham.'”

Stellantis has had a turbulent 2024, not only battling with the UAW, but also trying to manage excess inventory levels, a significant sales slide and intense criticism of CEO Carlos Tavares from its U.S. dealers over the company’s direction.

Jamie L. LaReau contributed to this report. Contact Eric D. Lawrence: elawrence@freepress.com. Become a subscriber. Submit a letter to the editor at freep.com/letters.