Here's why the UAW saving this Illinois auto plant is a ‘gigantic deal'

Since the dawn of this century, General Motors Stellantis Ford and other US manufacturers have shut down dozens of US factories. Few plants have been brought back into life. The United Auto Workers union is now able to add another.

It's for this reason that US President Joe Biden and UAW President Shawn Fain attended a UAW rally on Thursday in Belvidere (Illinois).

Illinois does not have as many auto plants as Michigan or Ohio. But Belvidere is ground zero for the union's successful fight tostop plant closingsin its just completed tentative labor agreements withStellatis,GMandFord.

The site is where an assembly plant was closed in February. 1,200 hourly employees were either left without a job, or forced to move to another factory far from the rural Illinois town of 25,000 people, located about 70 miles west Chicago.

This plant will reopen in 2027 as an assembly line, producing a mid-size pickup truck. It will also serve as the company's parts depot and begin making batteries for electric cars. In the interim, workers who are laid off and cannot get a job or do not want to leave can receive partial pay. This, combined with unemployment benefits, could get them over 70% of their usual pay.

Jeff Schuster is the global head of Automotive for GlobalData. An industry consultant. During negotiations, the union will often try to bring back plants. However, this is usually unsuccessful.

Fain and Biden came to Belvidere Thursday because of the success of the labor negotiations that just ended during the Stellantis strike.

Nobody thought we would be able to accomplish what we did. Re-open Belvidere? Forget it,' Fain said during remarks Thursday.

Biden recalled the two massive auto factories that GM used to operate in Delaware and what happened after they closed.

When they closed down, the people lost pride. The neighborhoods were in serious trouble. He said that people wonder if they will stay, and what is going to happen to them. This opening Belvidere is huge for me.

Dawn Sims is a Belvidere resident who has worked at the plant for 24 years. She was also a third generation Chrysler employee. At the event, she spoke with Fain, Biden and other Chrysler employees about the stress that her and her co-workers experienced when Stellantis announced the plans to shut down the plant.

She said, "They were willing tear apart families and communities."

She explained that she didn't feel she could move her entire family because both of her children were in high school.

She said, "To keep my job I would have to leave my wife and children." These were the hard choices that we all had to make.

The union's unusual strike strategy was a major factor in its success. The union's unusual strike strategy was a major factor in the union's success.

Schuster said, "It was an entirely different tactic which seemed to have worked."

What really helped was the record profits and/or near-record profit at automakers. Schuster says it is much harder to stop the closing of plants and save jobs when companies are losing billions, running out of cash or just treading water.

The union stated that the traditional Big Three automakers, which are unionized, have closed 65 facilities and plants in the past century. Some of these jobs were lost due to outsourcing to suppliers, or even foreign plants in some cases, as well as automation.

The loss of market share was a major factor in the decline. According to Edmunds data, the Big Three had US sales totaling 11.5 million cars in 1999 and 68% market share. In the last year that number had dropped by 51%. The US sold only 5.7 million cars and had 41% of market share.

The unions had a good position because the strong demand for automobiles helped fuel record car prices. "Record profits, Record contracts" became one of the slogans used on picket lines.

Belvidere wasn't the only plant that was brought back to life. It's not the only one.

In the past unions considered it a victory if an automaker dropped future plans to close a plant.

This is what happened to a plant operated by Stellantis' predecessor Chrysler in Sterling Heights, Michigan. The plant was scheduled for closure as part of the bankruptcy proceedings in 2009, then again in 2012. The plant in Sterling Heights, Michigan operated by Stellantis predecessor Chrysler was scheduled to close as part of its bankruptcy in 2009 and again by 2012.

It's the same thing that happened to the last GM Assembly Plant in Detroit. The Hamtramck Assembly Plant was closed as part of the 2019 Labor Deal in early 2020, retooled for electric pickups and reopened in November 2021.

Among those plants that literally arose from the grave were GM assembly lines that had been closed in 2009 due to bankruptcy. One was in Spring Hill in Tennessee and another in Orion Township in Michigan. Both were revived in 2011 as part of a labor agreement.

Other plants, such as GM's huge assembly plant in Lordstown, Ohio and transmission plants located in Warren, Michigan and Baltimore, have also been permanently closed.