Written by Tu Yanping
Editor / Huang Dalu
Design / Ju Jia
来源 / CNBC，路透社，彭博社，Automotive News
Stellantis is suing the UAW (United Auto Workers of United States) to prevent a possible strike over a dispute over investment commitments at its United States assembly plant. This escalated a months-long battle between the transatlantic automaker and United States unions.
In an Oct. 4 internal message sent to employees, the company said it was suing UAW and the local California chapter involved in voting on Stellantis' strike authorization request at the Los Angeles parts distribution center.
Tobin Williams, Stellantis' senior vice president ·of human resources for North America, said in the message: "This lawsuit will hold both international and local unions liable for lost revenue and lost production caused by the illegal strike." ”
On the morning of the 4th, UAW members at the Stellantis Los Angeles Parts Distribution Center voted to apply to the International Executive Committee for strike authorization if the company and the union were unable to reach a settlement.
In addition to the threat of another UAW strike, Stellantis faces a series of challenges such as swollen inventory, frustrated dealers, plummeting stock prices, and even a tax fraud investigation involving chairman John · Elkann.
Stellantis has been ramping up incentives to address excess inventory in the United States, but its sales in the United States market fell 20% in the third quarter.
Stellantis has made multiple rounds of layoffs in the United States and cut its earnings forecast for this year on Sept. 30. But CEO Carlos Tavares blithely called this difficult period "small operational mistakes."
Friction with trade unions
According to a copy of the lawsuit filed Oct. 3 in the District Court for the Central District United States of California by Stellantis, the lawsuit is designed to "prevent and/or remedy" the UAW's "breaches." The lawsuit alleges that if the union does strike, the court "should award Stellantis monetary damages for breach of contract."
UAW President Shawn · Fain spoke about the lawsuit in a letter to the leadership of the Stellantis union on the 4th. He called the move and other actions of the company "the desperate actions of a desperate manager who has lost control."
"Our legal team is confident in our right to strike. The company's legal threats are just threats to intimidate us, so we won't fight back. Fein said.
At the center of the dispute between the two parties is the union's allegation that Stellantis failed to fulfill its contractual obligations in the agreement reached between the two parties at the end of last year.
Stellantis assembly plant in Belvidere, Illinois, Credit: Bloomberg
In 2023, as part of a contract with the union, Stellantis agreed to invest $1.5 billion at the Belvidere, Illinois, assembly plant to produce new medium-duty trucks by 2027. This is part of the automaker's overall investment plan of $19 billion.
However, Stellantis has cut factory production several times and laid off employees. It acknowledged in August that it would postpone some of its investments due to economic conditions, but said it was "determined to deliver on its commitments".
Fein often said that unions would go on strike if necessary. But Stellantis argues that it is contractually illegal to do so. The automaker argued that there were clauses in the contract that could grace changes to plans based on market conditions, plant performance and other factors.
The company reiterated this position in the lawsuit, citing the "311 letter," which included the company's intended investments: "The planned future investments in the letter are conditional, require company approval, and are subject to change based on unforeseen circumstances of these business factors." ”
For months, Stellantis and UAW have been arguing over the company's investment plans. The automaker pointed to the slowdown in demand for electric vehicles as a reason for the revision of its production plan, and it has the right to postpone investments in production facilities if commercial reasons prove necessary.
On the same day that the lawsuit took place, Fein and union members held their latest rally against Stellantis in a Detroit suburb.
"There is only one reason why we are here today. Stellantis CEO Weishi Tang is out of control, and UAW members must save the company once again. "A strike will paralyze the company." If we had to strike, it was also Stellantis' decision because they did not fulfill their promises. ”
The union and several local chapters have filed complaints with the automakers regarding contractual obligations and other issues.
In the lawsuit, Stellantis alleges that the claims were sham and were intended to "justify a strike on Stellantis in the middle of the contract, otherwise violating the contract's prohibition of strikes."
Fein believes Tang Weishi wants to slash the company's underperforming United States business. He told trade unionists that Stellantis management had launched a "sweeping misleading campaign" aimed at confusing workers about their rights.
"We will not sit idly by and watch this company violate our protocols and threaten our jobs, factories and communities. We are united in our resistance. We will enforce our contracts at all costs to protect United States jobs. Fein said.
Declining performance
After raising prices more than his peers, Tang has been grappling with swollen inventories and slowing sales in the United States.
Na·talie Knight, Stellantis' chief financial officer, said its United States inventory was just over 430,000 units in the middle of the year. The company aims to reduce United States inventory to no more than 330,000 vehicles by the end of the year.
Stellantis said the incentive program launched early in the third quarter across its United States brand portfolio helped reduce inventory by 12 percent, or more than 50,000 vehicles.
Stellantis has also increased downtime at several assembly plants in the United States to reduce production of models that are not selling well.
While progress is being made on the inventory front, dealers say sales strategies need more adjustments to regain lost market share.
Stellantis' total sales in the United States market were 305294 units, down 20% year-over-year, and have declined for five consecutive quarters.
Among its brands, RAM fell by 19%, marking the third consecutive quarter of decline; Jeep down 6.2%; Chrysler fell 47%; Dodge fell 43%; Alfa · Romeo fell 29%.
Only small-batch Fiat brands have seen sales increase in the most recent quarter, with the brand launching the redesigned electric 500e in the United States this year.
Stellantis said the cost of reversing its North American operations, competition from Chinese automakers and a slowdown across the industry will bring its adjusted operating income margin down to 5.5% from its earlier double-digit target.
The United States Department of Energy said in July it planned to provide Stellantis with $334.8 million to convert the closed Belvedere assembly plant into an electric vehicle manufacturing plant and $250 million to convert its Indiana transmission plant in Kokomo into an electric vehicle parts production plant. But it also noted that the awards have not yet been finalized.
On October 3, during a visit to the group's factory in eastern France, Mr. Tang said reports of a possible merger between Stellantis and Renault were "pure speculation."
On the same day, Renault CEO Luc·a ·de Meo, speaking at a Renault event in Paris, declined to comment on what he called a "rumor".
Italy newspaper Il Sole 24 Ore reported that there is growing talk about mergers, with economies of scale seen as a possible solution to the stiff competition faced by traditional automakers.
Stellantis' share price has fallen by more than 55% since March, the worst performer among European auto stocks, and the company's valuation has been reduced by 47 billion euros.
Italy media reported that the France government is studying plans for the merger of the two groups. News of a possible merger between the two companies has been circulating since at least the beginning of the year. And this is not the first time that Tang Weishi has denied this rumor.
Earlier this year, Tang Weishi said that Stellantis, as one of the most profitable manufacturers, was well-positioned to deal with competition in China without the need for immediate mergers and acquisitions. (Title picture from Reuters)