Stellantis pledges further battery plant in UAW deal

Detroit legacy OEM Stellantis has reached a tentative agreement with the United Autoworkers (UAW) labour union. But it includes potentially costly plans for unionised battery production and additional battery-making capacity.

Under the agreement, Stellantis will reopen a factory Belvidere, Illinois which was slated to be closed, as well as construct a new battery plant on the site, according to the UAW.

“We look forward to welcoming our 43,000 employees back to work and resuming operations to serve our customers and execute our Dare Forward 2030 strategic plan to maintain Stellantis’ position at the forefront of innovation,” says Stellantis North American COO Mark Stewart.

The tentative agreement has not yet been ratified by UAW members. As such, Stellantis has not confirmed the terms of the agreement, but UAW leaders say that the deal includes provision for increased battery production at the company.

“Eight months ago, Stellantis idled Belvidere assembly plant, putting 1,200 of our members on the street,” says UAW vice-president Rich Boyer. “Stellantis is reopening the plant and the company will also be adding over a thousand jobs at a new battery plant in Belvidere,” he adds.

Stellantis’ commitment might be seen as slightly surprising, given it has already committed to building three gigafactories in North America, plans for the third of which it only finalised earlier this month. Whether it really needs a fourth plant or has caved to union demands to overinvest in battery production remains to be seen.

It could, of course, replace one of the three planned gigafactories with one in Illinois. But it negotiated hard with the Canadian authorities to get the incentives it wanted for its Ontario project, and it is under construction.

And the other two plants will be co-located in Kokomo, IN, with the synergies that will bring. So it seems hard to imagine Stellantis will step away from these favoured sites for a previously unloved location.             

Battery battleground

The UAW has voiced concerns that domestic battery production is being centred around joint ventures (JVs) between OEMs and oversees companies, resulting in a non-unionised battery industry, such as Ford’s JV SK On, which has been put under review by the firm.

But it has already scored a win with US automaker GM agreeing to unionise its Ultium battery production earlier this month. The union hailed the deal as achieving its goal of “guaranteeing that the transition to electric vehicles at GM will be a just transition that brings good union jobs to communities across America”.

“The plan was to draw down engine and transmission plants, and permanently replace them with low-wage battery jobs,” UAW president Shawn Fain said after the GM deal.

Unionised battery production, however, risks driving the costs of EV manufacturing up even further for the legacy automakers. GM and peer Ford have already deferred EV ramp-up until they can improve per-unit profitability.

For Stellantis, it is a case of out of the frying pan and into the fire. As the tentative deal with the UAW is struck, Canadian autoworkers union Unifor has announced a walkout at all of the firm’s Canadian facilities.

The union says that it has “prioritised discussions around the EV transition for the Brampton assembly plant”, including requesting clarity form Stellantis about “forecasted re-tool timeline, product allocation, timing for product launch, projected staffing levels and shift configuration”.