Jeep lays off 1,350 workers at Illinois plant citing rising costs of producing electric vehicles
Hundreds of workers are expected to be laid off when automaker Stellantis closes an assembly plant in northern Illinois early next year, citing the challenge of rising costs of producing electric vehicles.
The company, which employs about 1,350 workers at its Belvidere, Illinois plant, said the action would result in indefinite layoffs and that it may not resume operations as it considers other options.
Stellantis said the industry “has been adversely affected by a number of factors such as the ongoing COVID-19 pandemic and the global microchip shortage, but the most influential challenge is the rising costs associated with the electrification of the automotive market.”[ads1];
The Belvidere plant, which makes the Jeep Cherokee SUV, will be inactive starting Feb. 28, 2023, Stellantis said. The factory in Toluca, Mexico will now produce the vehicles.
Automaker Stellantis will halt operations at its Belvidere, Illinois plant, which employs 1,350 workers and builds Jeep Cherokee SUVs, citing the rising costs of producing electric vehicles.
The company said the shutdown of its Belvidere, Illinois plant (pictured) will result in indefinite layoffs and that it may not resume operations as it considers other options
“This difficult but necessary action will result in indefinite layoffs, which are expected to exceed six months and may constitute a job loss under the Werner Adjustment and Retraining Notification (WARN) Act. As a result, WARN notices have been issued to both hourly and white-collar workers, the company said.
“The company will make every effort to place permanent employees in open full-time positions as they become available.”
Stellantis has said it will invest over $31.6 billion through 2025 to electrify its vehicle lineup.
It has also said it expects electric cars to make up 100 percent of sales in Europe and 50 percent in the U.S. by 2030.
The White House did not immediately comment, but has repeatedly claimed that electric cars will increase employment in the United States.
Tim Ferguson, shop steward for the United Auto Workers (UAW) union Local 1268, which represents the Illinois plant’s hourly workers, said in an interview that company documents show that Cherokee production is being moved to the company’s Toluca, Mexico plant.
“It’s a pretty tough pill to swallow that they’re going to send your vehicle to Mexico,” Ferguson said.
“For me, there’s no doubt about it,” he added. “Their plan is to close this facility.”
The Belvidere plant will be inactive starting Feb. 28, 2023, Stellantis said. Pictured is Stellantis CEO Carlos Tavares in October 2022
The company said the Jeep Cherokee SUV replacement, along with other vehicles on a new electrified platform, will be manufactured in Toluca, Mexico (pictured)
Stellantis was formed last year with the merger of Fiat Chrysler and France’s PSA Peugeot.
Gov. JB Pritzker’s administration has assembled a response team from the Department of Commerce and Economic Opportunity to help displaced workers find new jobs, Pritzker spokesperson Jordan Abudeyyeh said.
She said the administration will work with local elected officials, community colleges and others to ensure appropriate retraining programs are available, and with Stellantis to find new uses for the Belvidere facility.
In 2016, then-Fiat Chrysler announced it would invest $350 million in the facility to produce the Jeep Cherokee. Production of the Cherokee began there in 2017.
Stellantis said Friday that the automaker is not commenting on the future of the “Cherokee nameplate.”
“This is an important vehicle in the lineup, and we remain long-term committed to this midsize SUV segment,” company spokeswoman Jodi Tinson said in an email.
Stellantis, who also pointed to the coronavirus pandemic and global shortage of microchips as challenges for the automotive industry, said they are working to identify opportunities to repurpose the Belvidere facility.
A robot tightens the nuts on the wheel of a Fiat 500 at the Toluca (Mexico) assembly plant
Robotic arms apply paint to a Dodge Journey in the paint shop at the FCA Toluca Assembly Plant. The plant has been building vehicles since 1968
‘Conos’ are emblematic sculptures designed by Mathias Goeritz, a renowned Mexican painter and sculptor, at the FCA Toluca Assembly Plant. The plant builds the Jeep® Compass, Dodge Journey and Fiat 500
Sam Fiorani, head of production forecasting firm AutoForecast Solutions, said automakers will continue to pull “money away from slow-selling, pure-ICE vehicles, like the Jeep Cherokee.”
He also said that the Cherokee replacement, along with other vehicles on a new electrified platform, will be manufactured in Toluca.
The company said it is also working to identify other opportunities to reuse the Belvidere facility and has no further details to share at this time.
UAW Vice President Cindy Estrada noted that Stellantis imports many vehicles into the United States and said that ‘companies like Stellantis receive billions in government incentives to transition to clean energy. It is an insult to all taxpayers that they are not investing the money back into our communities.’
