Hundreds of jobs are expected to be cut when automaker Stellantis closes an assembly plant in northern Illinois early next year, citing concerns over the rising costs of producing electric vehicles.
The company, which has about 1,350 workers at the plant in Belvidere, Illinois, said the action would result in indefinite layoffs and that it could not resume operations as it considered other options.
Stellantis said the industry “has been adversely affected by many factors, such as the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the rising costs associated with the electrification of the automotive market.”
Stellantis said that the Belvidere plant, which produces the Jeep Cherokee SUV, will be inactive starting February 28, 2023. The plant in Toluca, Mexico will now produce the cars.
Automaker Stellantis will shut down its 1,350-employee Jeep Cherokee SUV plant in Belvidere, Illinois, citing rising costs of electric vehicle production.
The company said the shutdown of the Belvidere, Illinois plant (pictured) would result in indefinite layoffs and that it could not resume operations as it considered other options.
‘This difficult but necessary action will result in indefinite layoffs expected to last six months and may result in job losses under the Workforce Adjustment and Retraining Notification (WARNING) Act. As a result, WARNING notices were issued to both hourly and salaried employees,” the company said.
“The company will make every effort to place employees on indefinite layoff in open full-time positions as they become available.”
Stellantis said it will invest more than $31.6 billion in the electrification of its vehicles by 2025.
He also said that by 2030, electric cars will make up 100 percent of sales in Europe and 50 percent in the United States.
The White House did not immediately comment, but has repeatedly argued that electric vehicles will boost U.S. motoring.
Tim Ferguson, shop chairman of the United Auto Workers (UAW) Local 1268 union, which represents hourly workers at the Illinois plant, said in an interview that Cherokee production was being moved to the company’s plant in Toluca, Mexico, according to company documents.
“It’s a pretty hard pill to swallow that they’re going to ship your car to Mexico,” Ferguson said.
“There’s no question about it for me,” he said. “Their plan is to close this plant.”
Stellantis said the Belvidere plant will be shut down as of February 28, 2023. Pictured is Stellantis CEO Carlos Tavares in October 2022
The company said the replacement for the Jeep Cherokee SUV, along with other vehicles on the new electrified platform, will be produced in Toluca, Mexico (pictured)
Stellantis was formed last year by 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 people find new jobs, Pritzker spokesman Jordan Abudeyeh said.
He said the administration will work with local elected officials, community colleges and others to ensure appropriate retraining programs are in place and will work with Stellantis to find new uses for the Belvidere plant.
In 2016, the then-Fiat Chrysler announced that it would invest $350 million in the plant to produce the Jeep Cherokee. Production of the Cherokee began there in 2017.
The automaker is not commenting on the future of the Cherokee nameplate, Stellantis said Friday.
“This is an important vehicle in the lineup, and we are committed to this midsize SUV segment for the long haul,” company spokeswoman Jodi Tinson said in an email.
Stellantis, who also pointed to the coronavirus pandemic and global microchip shortage as challenges for the auto industry, said he is trying to identify opportunities to reuse the Belvidere facility.
A robot tightens the wheel nuts of a Fiat 500 at an assembly plant in Toluca, Mexico
Robotic arms apply paint to a Dodge Journey in the paint shop of the FCA Toluca Assembly Plant. The plant has been producing machines since 1968
“Jonos” are emblematic sculptures created by renowned Mexican artist and sculptor Mathias Goeritz at the FCA Toluca Assembly Plant. The plant produces Jeep® Compass, Dodge Journey and Fiat 500 models
Sam Fiorani, head of production forecasting firm AutoForecast Solutions, said automakers will continue to “pull money from slow-selling, pure ICE vehicles like the Jeep Cherokee.”
He also said that the replacement of the Cherokee, along with other vehicles on the new electrified platform, will be produced in Toluca.
The company also said it is working to identify other opportunities to reuse the Belvidere facility, with no additional details to share at this time.
UAW Vice President Cindy Estrada noted that Stellantis imports many vehicles into the U.S. and said, “Companies like Stellantis receive billions in government incentives to transition to clean energy. It’s an insult to all taxpayers that they don’t put that money back into our communities.” .’