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 electric vehicle production.
The company, which employs about 1,350 workers at the plant in Belvidere, Illinois, said the action will result in indefinite layoffs and it may not resume operations as it considers other options.
Stellantis said the industry ‘has been adversely affected by a multitude of factors like the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market.’
The Belvidere plant, produces the Jeep Cherokee SUV, will be idle starting on February 28, 2023, Stellantis said. The plant in Toluca, Mexico will now produce the vehicles.
Automaker Stellantis, will halt operations at the Belvidere, Illinois, plant, which employs 1,350 workers and builds Jeep Cherokee SUVs, citing the rising costs of electric vehicle production
The company said the halting of the Belvidere, Illinois, plant (pictured) will result in indefinite layoffs and it may not resume operations as it considers other options
‘This difficult but necessary action will result in indefinte layoffs, which are expected to exceed six months and may constitute a job loss under the Worker Adjustment and Retraining Notification (WARN) Act. As a result, WARN notices have been issued to both hourly and salaried employees,’ the company said.
‘The company will make every effort to place indefinitely laid off employees in open full-time positions as they become available.’
Stellantis has said it will invest over $31.6 billion through 2025 on electrifying its vehicle lineup.
It also has said it expects EVs to make up 100 percent of its sales in Europe and 50 percent in the United States by 2030.
The White House did not immediately comment, but has repeatedly argued EVs will boost U.S. auto employment.
Tim Ferguson, shop chairman for United Auto Workers (UAW) union Local 1268, which represents the Illinois plant’s hourly workers, said in an interview that company documents show Cherokee production being moved to the company’s Toluca, Mexico, plant.
‘It’s a pretty tough pill to swallow that they’re going to ship your vehicle to Mexico,’ Ferguson said.
‘To me there is no question about it,’ he added. ‘Their plan is to close this plant.’
The Belvidere plant will be idle starting on February 28, 2023, Stellantis said. Pictured is the CEO of Stellantis Carlos Tavares in October 2022
The company said the replacement of the Jeep Cherokee SUV, along with other vehicles on a new electrified platform, will be produced in Toluca, Mexico (pictured)
Stellantis was formed last year with the merger of Fiat Chrysler and France’s PSA Peugeot.
Gov. J.B. Pritzker’s administration has assembled a response team from the Department of Commerce and Economic Opportunity to help displaced workers find new employment, said Pritzker spokesperson Jordan Abudeyyeh.
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 plant.
In 2016, then-Fiat Chrysler announced it would invest $350 million in the plant to produce the Jeep Cherokee. Production on 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 committed long term to this mid-size SUV segment,’ company spokesperson Jodi Tinson said in an email.
Stellantis, which also pointed to the coronavirus pandemic and global microchip shortage as challenges to the auto industry, said it is working to identify opportunities to repurpose the Belvidere facility.
A robot tightens the lug nuts on the wheel on the Fiat 500 at Toluca (Mexico) assembly plant
Robot 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
The ‘Conos’ are emblematic sculptures designed by Mathias Goeritz, a well-known 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 the replacement of the Cherokee, along with other vehicles on a new electrified platform, will be produced in Toluca.
The company said it also is working to identify other opportunities to repurpose the Belvidere facility and has no additional details to share at this time.
UAW Vice President Cindy Estrada noted Stellantis imports many vehicles into the United States and said ‘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 that money back into our communities.’