Stellantis Defends Delayed Belvidere Plant Reopening Amid Lawmaker Pressure

In response to growing pressure from U.S. lawmakers, Stellantis has reiterated its commitment to the United Auto Workers (UAW) and defended its decisions regarding the delayed reopening of its Belvidere Assembly Plant in Illinois. The automaker emphasized that the plant’s reopening is postponed, not canceled, attributing the decision to challenging market conditions and industry-wide adjustments.

Lawmakers Voice Concerns Over Stellantis’ Decisions – 

This week, approximately 80 U.S. House and Senate members signed letters urging Stellantis to stay true to its commitments under the 2023 collective bargaining agreement with the UAW. The congressional delegation, which included Michigan representatives Debbie Dingell and Rashida Tlaib, stressed the importance of maintaining jobs and production in the United States. At a recent rally in Trenton, Michigan, UAW President Shawn Fain joined the lawmakers to amplify concerns about the automaker’s direction.

In their letter, the House members highlighted that Stellantis is set to receive $585 million from the Domestic Manufacturing Conversion Grant Program, with $335 million specifically earmarked for reopening the Belvidere plant. They argued that taxpayer dollars should not subsidize a company that is cutting jobs and production while increasing shareholder payouts.

“Taxpayers are currently funding consumer incentives for several Stellantis vehicles,” the letter noted, emphasizing the need for the company to ensure these investments benefit the broader public interest.

Stellantis Cites Market Volatility – 

Stellantis defended its actions, stating that the delay at Belvidere is “consistent with the current challenging automotive landscape.” The automaker pointed to ongoing market volatility amid the transition to electric vehicles (EVs) as a major factor. A company statement provided by spokesperson Jodi Tinson mentioned that Stellantis remains committed to a “healthy, sustainable company that can compete in a global marketplace.”

The automaker also emphasized that many industry players have faced similar challenges, leading to delayed investments and product launches. “Over the past year, numerous companies across the industry have announced investment and product delays as well as outright product cancelations,” the statement read.

Criticism of Stellantis’ Financial Moves – 

The congressional letters also scrutinized Stellantis’ financial decisions, questioning why the company is delaying plant investments while continuing substantial stock buybacks and executive compensation. U.S. lawmakers cited Stellantis CEO Carlos Tavares’ nearly $40 million in compensation last year and the company’s decision to pay out $5 billion in dividends and repurchase $3.3 billion of its own stock in 2024.

“If Stellantis is performing so well that Mr. Tavares can earn 518 times more than the average Stellantis worker, we are inclined to believe market conditions are positive,” the lawmakers’ letter argued.

Investment Commitments Amid Shifting Production – 

Despite these challenges, Stellantis maintains that it is committed to investing in the United States. The company recently announced a $400 million investment in three Michigan facilities, which includes producing the Ram 1500 REV, its first electric pickup truck, at the Sterling Heights Assembly Plant (SHAP).

However, concerns persist about Stellantis’ broader strategy, including plans to expand its Saltillo, Mexico, plant to produce export models of the Ram 1500. This has fueled worries that the company might shift more production out of the U.S. to lower-cost regions. As the company faces a complex mix of pressures from the UAW, dealers, shareholders, and now lawmakers, it has also had to navigate declining sales and excess inventory in the key U.S. market.

Source: Detroit Free Press