By David Shepardson and Nora Eckert

WASHINGTON/DETROIT (Reuters) - Chrysler parent Stellantis is moving forward with plans to build a new midsize pickup truck in Belvidere, Illinois, the company said on Wednesday, ending months of conflict with the United Auto Workers union over delays, and strengthening its U.S. production footprint as President Donald Trump takes office. 

Stellantis in 2023 agreed to build a new $3.2 billion battery plant and invest $1.5 billion in Belvidere to build new midsize trucks by 2027, but delayed the plans in August. The Italian-American automaker told employees that it would stick with these investment plans on Wednesday in a memo seen by Reuters.

Stellantis Chair John Elkann met with Trump last week and touted the company's U.S. strategy. 

Automakers are under increasing pressure to onshore production after Trump said he was considering imposing 25% duties on imports from Canada and Mexico on Feb. 1.

Stellantis, as well as its Detroit rivals General Motors and Ford Motor,  would take a hit from such tariffs because of their production footprint outside of the U.S., especially in Mexico.

The Belvidere factory has been a battleground for the United Auto Workers union since its six-week strike against Detroit's automakers in late 2023.

In September 2024, the union filed unfair labor practice charges against the automaker, partly because it said Stellantis was delaying planned investments into a new battery plant and factory in Belvidere.

“This victory is a testament to the power of workers standing together and holding a billion-dollar corporation accountable,” UAW President Shawn Fain said in a statement.

A Stellantis spokesperson said on Wednesday the new midsize truck is "planned to take full advantage of our multi-energy strategy," including options for a gasoline-powered vehicle, plug-in hybrid and electric vehicle.  

The automaker said it also plans to funnel more investments into its Toledo, Ohio, assembly facility, where it makes the Jeep Wrangler and Gladiator, along with additional investments in its Kokomo, Indiana, engine plant.

The announcement shows the company is trying to be more flexible in order to respond to fluctuating EV demand, said Sam Fiorani, vice president at research firm AutoForecast Solutions.

"Investment in new powertrains and the unspecified power system for the new pickup in Belvidere show that Stellantis is preparing for a less EV-focused future and planning to weather the next 10 years with a range of drivetrains from fully gas-powered to fully electric," he said.

Production of the Dodge Durango has also been a sticking point between the union and company, with the union previously claiming Stellantis planned to offshore production of the three-row SUV. 

Stellantis is moving forward with plans to build the next-generation Dodge Durango at its assembly complex in Detroit, the company said in the memo.

(Reporting by David Shepardson in Washington and Nora Eckert in Detroit, additional reporting by Kalea Hall in Detroit; Editing by Matthew Lewis)