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Stellantis could close 18 facilities under deal


United Auto Workers members attend a solidarity rally as the UAW strikes the Big Three automakers on September 15, 2023 in Detroit, Michigan.

Bill Pugliano | Getty Images

DETROIT – The most recent contract proposal by automaker Stellantis to the United Auto Workers union could lead to the closure of 18 U.S. facilities, but it could also bring new investments and repurpose an idled vehicle assembly plant in Illinois, sources familiar with the discussions told CNBC.

The plans would likely affect thousands of UAW members, shrink the automaker’s North American footprint and create a new “modernized” parts and distribution network, which company and union leaders were at odds over, the sources said.

A focal point of the plan is possible closures of 10 “Mopar” parts and distribution centers, which are scattered across the country, to consolidate them into larger “Amazon-like” distribution centers, said the sources, who spoke on the condition of anonymity because the talks are private and ongoing. The proposal included a potential “Mega Hub” at Belvidere Assembly, which the automaker indefinitely idled in February.

Three sources said other manufacturing facilities included in the proposal are Tipton Transmission Plant in Indiana; the partially decommissioned Trenton Engine Complex and the already idled Mount Elliott Tool & Die in Michigan; and the idled Belvidere Assembly. Also included were a Detroit warehouse, office space and the automaker’s North American headquarters and technology center, a massive 500-acre campus in metro Detroit formerly used as Chrysler’s world headquarters.

The last piece of the offer involving its North American headquarters comes as companies adjust to remote or hybrid work, and attempt to realign their physical footprints following the coronavirus pandemic.

The sign is seen outside of the FCA US LLC Headquarters and Technology Center as it is changed to Stellantis on January 19, 2021 in Auburn Hills, Michigan.

Jeff Kowalsky | Afp | Getty Images

In 2021, Stellantis said it wanted to have a majority of its salaried employees work remotely most of the time, including the then-17,000 employees in North America. Following those plans, the company confirmed it was “evaluating how we work to enable our teams to be their most innovative, creative and efficient. That analysis includes potential adjustments to our real estate portfolio.” Stellantis said the facility would “continue to be our North American headquarters and North America technical center.”

It’s not guaranteed the facilities would close under a labor deal; however, Stellantis is required to include potential closures or sales of any location where a UAW member works, a company source said. The Detroit Free Press reported in 2022 that the company could lease a portion of the headquarters complex.

The 18 potential closures were part of a Thursday night proposal by Stellantis to the union, which launched targeted strikes against the Detroit automakers after contracts expired at 11:59 p.m. on Thursday. Negotiations between Stellantis and the UAW reconvened Monday morning.

Stellantis also included its proving grounds in Arizona in the proposal, but said operations would continue with any sale, two of the sources said.

Belvidere Assembly

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