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Stellantis closes Illinois factory, lays off more than 1,000 workers, citing rising costs of electric cars

New York

Stellantis is closing its Illinois plant in February, resulting in indefinite layoffs for 1,350 employees, the company said in a statement, citing rising costs in the electric car market.

“Our industry has been adversely affected by a number of factors such as the ongoing Covid-19 pandemic and the global shortage of microchips, but the biggest challenge is the rising costs associated with the electrification of the automotive market,” Stellantis said in a statement. The company said it is taking steps to “stabilize production” and “improve efficiency” at its North American facilities.

The European automaker said it will “quiet” its assembly plant in Belvidere, Illinois on February 23, and said the layoffs are expected to exceed six months. Stellantis, the parent company of Chrysler, Dodge and Jeep, said it will “make every effort” to place the laid-off employees in open positions and is looking for other opportunities to repurpose the Belvidere plant.

The United Auto Workers International Union said on Facebook it was “deeply angered” by the decision. Group president Ray Curry said it is “unacceptable” that Stellantis is not allocating new products to the facility.

The Illinois plant builds the Jeep Cherokee and will continue to produce the vehicle until the plant closes, but the company had no comment on the future of that make and model.

“This is an important vehicle in the lineup, and we remain long-term committed to this midsize SUV segment,” Jodi Tinson, a spokeswoman for Stellantis, said in a statement.

In October, the company said its joint venture that manufactures Jeep vehicles in China is filing for bankruptcy.

Last July, Stellantis made a $35.5 billion commitment to electric vehicles by the end of 2025 to expand its portfolio. The company planned for 70% of European sales and 40% of U.S. sales to be either all-electric or plug-in hybrid vehicles within four years, CEO Carlos Tavares said.

– Peter Valdes-Dapena contributed to this report.

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