Eight months after “indefinitely” idling the Belvidere Assembly Plant, Stellantis has committed to investing nearly $5 billion to retool it for production of a new midsize truck, build an adjacent electric vehicle battery plant and create a “megahub” parts distribution center.
Part of a tentative agreement to end a six-week strike by the United Auto Workers, the rollout of the three-pronged manufacturing operation promises to bring new life to the 60-year-old plant and a projected 2,500 jobs back to the small city near Rockford over the next four years.
But it also means the 30-year-old Stellantis parts distribution center in Naperville will be closing. It will be consolidated into the new facility and its 95 workers, who went on strike Sept. 22, may be able to transfer to Belvidere when it opens next year.
“Not only have we saved Belvidere, we’ve shown that these companies can reopen plants if we unite and fight to force them to,” UAW President Shawn Fain said during an online address Thursday night.
The Stellantis agreement includes a 25% increase in base wages, cost of living adjustments and the right to strike over plant closures, mirroring similar deals struck by Ford and General Motors. But the Stellantis agreement made restarting the dormant plant a successful new battleground for the UAW.
Stellantis will invest $19 billion in assembly operations by the end of the four-year agreement, with $4.8 billion earmarked for Belvidere.
The plan for Belvidere includes investing $1.5 billion in the plant to build up to 100,000 units of an all-new midsize truck beginning in 2027. The plant will operate on two shifts, and could “more than make up for” the 1,200 jobs lost when it was idled in February, the UAW said.
In addition, Stellantis will invest $3.2 billion in an adjacent EV battery plant that will create a projected 1,300 jobs, according to the UAW. The plant is slated to launch in 2028 as a joint venture with a business partner yet to be 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,” Fain said. “This means they’ll fall under our national agreement.”
Stellantis will also invest $100 million to create a new megahub parts distribution center at Belvidere, which is set to launch next year through the consolidation of facilities in Chicago, Milwaukee and Marysville, Michigan. Belvidere stamping operations to supply parts for the megahub are expected to begin in 2025.
UAW Vice President Rich Boyer said the consolidation will include an enhanced $37,500 moving allowance for employees affected by the parts distribution center closure in Naperville.
“Our Mopar members will still come out way ahead of where we were, though it will mean some discomfort,” Boyer said Thursday.
A Stellantis spokesperson declined to comment Friday.
The state put together a number of incentive packages to get Stellantis to bring some form of EV production to the idled Belvidere plant. The Invest in Illinois Act created a $400 million “closing fund” to incentivize EV manufacturers and other businesses to locate, expand or remain in the state through favorable financing. The 2021 Reimagining Electric Vehicles in Illinois Act was bolstered in December, upping the incentive to 75% of state income tax for automakers that retain employees as they transition to EV production.
Details of the state’s finalized economic incentive package for Stellantis have yet to be released.
The Belvidere plant opened under the Chrysler banner in 1965, with a white Plymouth Fury II sedan the first vehicle to roll off the line. Over the years, the plant was retooled several times, and made everything from the Dodge Neon to the Chrysler New Yorker.
The plant was hitting on all cylinders with the arrival of Jeep Cherokee in 2017. By the start of 2019, it had 5,464 workers on three shifts, after building 270,000 of the SUVs during the previous year. But demand for the plant’s sole product waned, and downsizing accelerated under new owner Stellantis, which was formed by the merger of Fiat Chrysler Automobiles (FCA) and Peugeot of France in January 2021.
In February, Stellantis “indefinitely” idled the assembly plant and laid off its last 1,200 workers after halting production of the Jeep Cherokee amid dwindling sales. Many people in Belvidere feared it would shift from being an auto town to a ghost town.
But the UAW, and Illinois legislators, made restarting the plant a priority throughout the negotiations with Stellantis.
“We went into these negotiations knowing that we had a duty to save Belvidere,” Boyer said. “And UAW family, we did exactly that.”
The UAW, which represents 146,000 members across the U.S., is seeking a new four-year labor agreement with General Motors, Ford and Stellantis. Demands include pay increases, shorter workweeks 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 launched a strike against all three automakers for the first time in the Detroit-based union’s 88-year history. The strike expanded to nearly 45,000 UAW members at eight assembly plants and 38 parts distribution centers in 22 states.
The automakers have all reached tentative four-year agreements with the UAW, which pending ratification, will end the six-week strike.
Ford, which broke the logjam with a tentative agreement on Oct. 25, has recalled 95% 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 employees 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 across all of its facilities by the end of the new four-year agreement.
GM reached a tentative agreement with the UAW on Monday.
