Carlos Tavares, CEO of Stellantis NV, speaks to the media at the Stellantis automobile plant in Sochaux, France, on Thursday, October 3, 2024.
Nathan Laine | Bloomberg | Getty Images
DETROIT – Stellantis is suing the United Auto Workers, escalating a months-long battle between the transatlantic automaker and the American union, CNBC has learned.
In an internal memo to employees Friday that was confirmed to be authentic, the company said it is suing the UAW and a California chapter that participated in a vote on a strike authorization request at Stellantis' Los Angeles Parts Distribution Center.
“This lawsuit would hold both the international and local unions liable for lost revenue and other damages resulting from lost production due to an unlawful strike,” Tobin Williams, Stellantis senior vice president of North America human resources, said in the statement.
A large majority of UAW members at Stellantis' Los Angeles Parts Distribution Center voted to seek strike authorization from the International Executive Board if the company and the union could not come to an agreement, the union said Friday morning.
United Auto Workers (UAW) President Shawn Fain speaks to attendees during a campaign rally for U.S. Vice President and Democratic presidential candidate Kamala Harris and her running mate Tim Walz in Romulus, Michigan, USA, August 7, 2024.
Rebecca Cook | Reuters
The purpose of the lawsuit is to “prevent and/or remedy a breach of contract by the UAW,” according to a copy of the lawsuit filed Thursday in U.S. District Court in the Central District of California.
The lawsuit argues that in the event of a union strike, the court “should award Stellantis financial damages” resulting from a breach of contract.
UAW President Shawn Fain addressed the lawsuit in a letter to union leadership at Stellantis on Friday. He called it and other actions by the company “desperate actions by a desperate executive who has lost control.”
“Our legal team has full confidence in our right to strike. The company’s legal threats are just that – threats designed to intimidate us, so we won’t fight back,” Fain said.
At the heart of the dispute between the two sides is the union's claim that Stellantis failed to honor contractual obligations under an agreement the two sides reached late last year. This comes after Stellantis cut plant production multiple times, laid off workers and delayed potential investments outlined under the 2023 contract.
Fain has regularly stated that the union will strike if necessary, but Stellantis has argued that doing so would be unlawful under the contract.
The automaker has claimed that the contract contains language that gives it leniency to change plans based on market conditions, plant performance and other factors.
The company reiterated this stance in its lawsuit, citing “Letter 311” containing the company's expected investments: “The proposed future investments in the letter are conditional, subject to approval by the company, and are subject to change based on these business contingencies.”
The lawsuit came the same day Fain and union members held their final rally against Stellantis in suburban Detroit.
“We are here today for a reason. Stellantis CEO Carlos Tavares is out of control and it is once again up to UAW members to save this company from itself,” Fain said during the event. “A strike will cripple this company. And if we have to strike, it will be Stellantis’ decision to do so because they are not honoring their obligation.”
The union and several local chapters have filed a grievance against the automaker over contractual obligations and other issues.
Stellantis described the complaints in the lawsuit as a deception intended to “justify strikes during the term of the contract against Stellantis that would otherwise violate the law [contract’s] no strike clause.”
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