Stellantis' UAW offer sought right to sell Auburn Hills HQ, Trenton Engine, others

Jeep maker Stellantis NV is seeking the unilateral right to sell its Auburn Hills headquarters and technical center, one of 18 facilities it has proposed it could sell or close as a part of its latest offer to the United Auto Workers, according to two sources familiar with the information.

The right to sell the transatlantic automaker's North American headquarters that features Chrysler's Pentastar logo doesn't mean the automaker is abandoning Auburn Hills, according to one of the sources who requested anonymity without permission to speak publicly on the topic, but it would offer the company flexibility and options for the future of the 500-acre campus that includes labs, engineering facilities and design studios in a hybrid workplace. For example, it could sell the property and lease it back.

The proposal was included in Stellantis' fourth counteroffer to the union on Thursday evening before it declared a strike at the Jeep Wrangler and Gladiator plant in Toledo, Ohio, alongside Ford Motor Co.'s Bronco and Ranger plant in Wayne and General Motors Co.'s Wentzville midsize pickup and commercial van plant outside St. Louis.

The UAW represents salaried employees at the Auburn Hills headquarters. As a result, the union would have to agree to the proposal to allow Stellantis to sell the site that formerly served as Chrysler LLC's world headquarters.

In a late Monday statement, Auburn Hills Mayor Kevin McDaniel said: "We are proud to be the home of the Stellantis North America Headquarters. As Stellantis stands as the largest employer in our thriving community, we recognize the importance of addressing recent reports surrounding the closure of 18 U.S. facilities. To date, we have received no indications or information suggesting that Stellantis intends to shut down its headquarters in our city."

Mark Stewart, Stellantis' chief operating officer in North America, said on Saturday the selected sites are mostly Mopar aftermarket parts distribution centers that the company is looking to modernize, but wouldn't result in job reductions. The company has 20 centers in the United States, and there are 10 included in the list of 18 sites.

Stewart also mentioned underutilized locations. That, according to the sources, includes Trenton Engine Complex, which employs more than 600 hourly workers and whose north building already is idled and used for warehousing.

Additionally, Indiana's Tipton Transmission, where close to 300 hourly workers produce nine-speed transmissions that are also built at the nearby Indiana Transmission Plant in nearby Kokomo, is on the list. Workers would be able to transfer.

Stellantis also would be able to close the idled Mount Elliott Tool & Die facility in Detroit.

The idled Jeep Cherokee plant in Belvidere, Illinois, also was on that list. Stewart said Stellantis' offer, though, did include an unspecified "solution" for the idled Cherokee plant that was on the table if an agreement could be reached before the previous contract with the UAW expired a minute before midnight on Thursday. The proposal was to use that site for a large Mopar distribution hub, the sources said.

The UAW rejected that offer before the deadline and countered with its own, which Stewart said wasn't affordable. The union and Stellantis resumed talks on Monday after the UAW met with Ford and GM over the weekend.

"The discussion was constructive and focused on where we can find common ground to reach an agreement that provides a bridge to the future by enabling the Company to meet the challenges of electrification," according to a statement from Stellantis. "Together with the UAW, we have the opportunity to establish a framework in this contract that will allow the Company to be competitive during this historic transformation and bring our workforce along on this journey. This includes identifying a solution for Belvidere, something we have been committed to from the beginning and a discussion we want to continue with the UAW."

The 10 Mopar parts distribution centers include three in Michigan: Center Line, Marysville and Warren. The others are Atlanta PDC, Boston PDC, Chicago PDC, Milwaukee PDC, New York PDC, Orlando PDC and Sherwood PDC. The company could open new centers in Fishkill, New York, and Macon, Georgia.

"These are either facilities that had been idle for a long time, or are parts distribution centers — PDCs — but are much older that we need to modernize, or maybe are in the wrong location," Stewart said during a roundtable. "Now we look at our distribution chain and the ability to more effectively get things to our customers faster and the best cost structure from the transportation standpoint, and we need to make investments into Mopar, and so in a lot of cases, it doesn't make sense to make those investments in the location that they're in."

CNBC was the first to report the details of the 18 facilities.

Stellantis in May 2021 announced a more flexible workplace model it calls "the New Era of Agility" for the 15,000 salaried employees assigned to work at its Auburn Hills campus at the time. It had estimated on average 70% of an employee's time would be spent working remotely and the rest in the office. Following that move, Stewart said it was reassessing its real estate portfolio, including potentially leasing space at the headquarters.

“The Chrysler Technology Center will continue to be our North American headquarters and North America technical center," the company said at the time.

Michigan Economic Development Corp. spokesperson Otie McKinley declined to comment on the ongoing negotiations, but said Michigan and Stellantis are "synonymous with one another."

A spokesperson for Oakland County declined to comment on the reports.

Stellantis' Thursday offer to the union also included 21% cumulative wage increases (19.5% not compounded), a four-year progression to the top wage, a $20 per hour starting wage for supplemental employees and $1 billion in additional retirement benefits for employees and retirees.

Following the negotiations this weekend, UAW President Shawn Fain on Monday morning told NPR there's still a long way to go before the union reaches tentative agreements with the companies and ends the strikes.

"We've put full offers to all three companies before the strike deadline, and we've really had minimal conversations over the weekend," he said. "The ball's still in their court, so we're going to keep moving as we have and just see how things progress."

Read more: Where UAW, Detroit Three automakers stand on key issues

The union has threatened that more sites could be added based on how talks continue in what it calls a "stand-up strike" strategy, though Fain refrained from stating whether that could be soon. He noted that the union put forth to the automakers its members' demands, including economic proposals, the week of July 30.

"We were very upfront from day one over eight weeks ago when we began bargaining with the companies, we stated ... if they expected to wait until the last minute and start bargaining, they were going to find they were going to be disappointed, because we expected to get down to our members' demands and take care of business early, so we wouldn't be in this position," he said. "The companies chose not to, and so they waited until last week to actually start really talking, and so we have a long way to go, and if the company does not respect the demands of our workers, then we will escalate action."

As a result of the strike, Ford on Friday temporarily laid off the rest of its 600 workers at its Michigan Assembly Plant in Wayne, since the union only had the assembly and paint shop workers walk out. General Motors Co. has said Fairfax Assembly Plant in Kansas, where it makes the Chevrolet Malibu sedan and Cadillac XT4 SUV, could idle this week as a result of the strike at Wentzville. Workers not eligible for unemployment will receive $500 per week like UAW members on strike.

"That's the choice the companies made," Fain said about the layoffs. "The companies didn't have to lay these workers off. It was a choice. They're trying to intimidate workers, but we'll take care of our workers, no matter what we have to do."

Fain said 20% not-compounded wage increases offered by the automakers "is not enough," after what the union sacrificed to save the companies during the Great Recession and bankruptcies. The UAW originally requested 40% not compounded (46% compounded) wage increases, which has since dropped to 36%.

Fain said on MSNBC's "Morning Joe" that the elimination of tiers remains one of the key issues over which an agreement between the parties remains fraught. The companies have suggested reducing the timeline to get to the top wage to four years, down from eight, while the UAW wants it to take just 90 days.

The White House said on Sunday it's sending top aides to President Joe Biden to Detroit to help with securing an agreement.

"This battle is not about the president," Fain said on MSNBC. "It's not about the former president or any other person prior to that. This battle is about the workers standing up for economic and social justice and getting their fair share because they're fed up with going backward."

Autoworkers themselves who were on strike were split on the assistance from the Biden administration.

"That's no problem," said Phil Lozier, 52, of Canton, a UAW representative for members at Ford's Michigan Assembly Plant in Wayne. "Biden is a labor supporter. We are good."

But Lumengo McGhee, 51, of Macomb, an 11-year worker on the metal line, says the members who have done the job should be negotiating an agreement, not outsiders.

"They haven't been in here," she said. "They haven't worked all day on those concrete floors. They haven't gotten what we get paid and tried to pay their bills."

Meanwhile on Monday, South Carolina Sen. Tim Scott, a Republican who's running for president, was critical of the UAW and its strike against the Detroit Three during a campaign event in Iowa, NBC News reported.

 “I think Ronald Reagan gave us a great example when federal employees decided they were going to strike. He said, you strike, you’re fired," Scott said. "Simple concept to me. To the extent that we can use that once again, absolutely.”

bnoble@detroitnews.com

Twitter: @BreanaCNoble

Staff Writer Kalea Hall contributed.