Eight months into an “indefinite” idle at the Belvidere assembly plant, Stellantis has committed to investing nearly $5 billion to retool it to produce a new medium truck, build an adjacent electric vehicle battery plant and create a center for “megahub” parts distribution.
Part of a tentative agreement to end a six-week United Auto Workers strike, the expansion of the three-way manufacturing operation promises to bring new life to the 60-year-old plant and an expected 2,500 jobs back to the small river town near Rockford over the next four years.
“Not only did we save Belvidere, we showed that these companies can reopen plants if we come together and fight to force them to do so,” UAW President Sean Fein said in an online address Thursday night.
The Stellantis agreement, announced Saturday by the UAW, includes a 25 percent increase in base wages, cost-of-living adjustments and the right to strike at plant closings, mirroring similar deals struck by Ford and General Motors. But the Stellantis settlement turned the passive plant restart into a successful new battleground for the UAW.
Stellantis will invest $19 billion in assembly operations through the end of the four-year agreement, with $4.8 billion earmarked for Belvidere.
The Belvidere plan outlined Thursday includes investing $1.5 billion in the plant to build up to 100,000 units of an all-new medium truck starting in 2027. The plant will operate two shifts and could “more than offset” 1,200 jobs were lost when it was cut in February, the UAW said.
In addition, Stellantis will invest $3.2 billion in an electric vehicle battery plant next door, which will create an estimated 1,300 jobs, according to the UAW. The plant is scheduled to start up in 2028 as a joint venture with a business partner that has not yet been identified.
“Under the agreement we reached with Stellantis, all employees who work for the future joint venture will be employed by Stellantis and leased to the joint venture,” Fein said. “That means they will fall into our national agreement.”
Stellantis will also invest $100 million to create a new parts distribution center for a megahub in Belvidere, set to launch next year by consolidating facilities in Chicago, Milwaukee and Marysville, Michigan. Belvidere stamping operations to supply parts for the megahub are expected to begin in 2025.
The creation of the Belvidere megahub will mark the end of Stellantis’ 30-year-old parts distribution center in Naperville, which will be consolidated into the new facility. The 95 workers at the Naperville parts center who went on strike Sept. 22 may be able to move to Belvidere when it opens next year.
UAW Vice President Rich Boyer said the consolidation will include an enhanced relocation allowance of $37,500.
“Our Mopar members will still come out way ahead of where we were, even though it will mean some discomfort,” Boyer said Thursday.
A spokesman for Stellantis declined to comment Friday.
The state has put together a number of incentive packages to get Stellantis to introduce some form of EV production at the idle Belvidere plant. The Invest in Illinois Act created a $400 million “closure fund” to incentivize EV manufacturers and other businesses to locate, expand or stay in the state through favorable financing. The Illinois Electric Vehicle Reimagining Act of 2021 was strengthened in December, raising the incentive to 75 percent of the state’s income tax for automakers that retain employees as they transition to EV production.
Details of the state’s finalized economic stimulus package for Stellantis have not yet been released.
The Belvidere plant opened under the Chrysler banner in 1965 with the white Plymouth Fury II sedan, the first car to roll off the line. Over the years, the plant was remodeled several times and produced everything from the Dodge Neon to the Chrysler New Yorker.
The plant fired on all cylinders with the arrival of the Jeep Cherokee in 2017. By early 2019, it had 5,464 workers working three shifts after building 270,000 of the SUV the previous year. But demand for the plant’s sole product has fallen and job cuts have accelerated under new owner Stellantis, which was created by the merger of Fiat Chrysler Automobiles (FCA) and Peugeot of France in January 2021.
In February, Stellantis “indefinitely” shut down the assembly plant and laid off the last 1,200 workers after halting production of the Jeep Cherokee amid declining sales. Many people in Belvidere feared that it would turn from a car town into a ghost town.
But the UAW and Illinois lawmakers made restarting the plant a priority during negotiations with Stellantis.
“We went into these negotiations knowing we had an obligation to save Belvidere,” Boyer said. “And the UAW family, we did just that.”
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The UAW, which represents 146,000 members in the U.S., is seeking a new four-year labor agreement with General Motors, Ford and Stellantis. The demands include wage increases, shorter work weeks and improvements to retiree pensions and health care plans amid record profits for the Big Three automakers.
When the previous contract expired on Sept. 15, the UAW went on strike against the three automakers for the first time in the Detroit-based union’s 88-year history. The strike has expanded to nearly 45,000 UAW members at eight assembly plants and 38 parts distribution centers in 22 states.
All automakers have reached tentative four-year agreements with the UAW that, pending ratification, will end the six-week strike.
Ford, which broke the gridlock with a preliminary agreement on Oct. 25, called 95 percent of its nearly 20,000 striking employees and strike-related layoffs back to work as of Thursday, the company said. That includes 4,613 striking workers at the Chicago Assembly Plant on the city’s southeast side, who returned to work last weekend after 27 days on the picket line.
The Ford deal includes a commitment to invest $400 million in the Chicago assembly plant itself as part of $8.1 billion to be spent on all of its facilities by the end of the new four-year agreement.
GM reached a tentative agreement with the UAW on Monday.