UAW-Stellantis Deal Secures $18.9 Billion Investment and Revival of Idled Plant; Pushes Toyota to Hike Wages Amid Broader Unionization Aspirations

Unprecedented UAW-Stellantis pact aims to reopen idled plant, foster investment worth $18.9 billion, and ensure substantial pay raises; deal sets precedence inciting Toyota to up wages and prompting wider industry unionization efforts.

The United Auto Workers (UAW) union announced that Stellantis, the parent company of Chrysler, plans to invest $18.9 billion in the U.S. by April 2028. The investments include $1.5 billion for a new midsize pickup truck production at an idle factory in Belvidere, Illinois.
The deal includes product commitments totaling $8.1 billion from Stellantis, such as plans to invest $3.2 billion in a new joint-venture battery plant in Belvidere set to open in 2028 and significant pay increases, bonuses and other enhanced benefits for autoworkers.
The new contracts with the UAW have widened an already large labor cost gap, prompting companies like Toyota, whose U.S. plants aren't unionized, to increase wages by 9% for most of its U.S. workers, and cut the time it takes to earn the highest wages at its facilities by half.
The UAW has big aspirations for unionizing the auto industry outside of Detroit and intends to organize more companies. UAW President Shawn Fain has suggested the possibility of negotiations with other large automakers, potentially expanding the 'Big Three' to the 'Big Five or Big Six' by 2028.
UAW's unionization efforts could further target smaller foreign car companies like Kia, Hyundai, and Volkswagen, as well as Elon Musk's Tesla. Meanwhile, other automakers like Honda are reportedly evaluating the UAW's pending contracts to remain competitive.