US president Joe Biden hailed the electric vehicle boom as a job-creation opportunity, but the opposite seems to be happening at one Stellantis factory in Illinois.
The carmaker will idle the Belvidere assembly plant by Feb. 23 as it “considers other avenues to optimize operations,” it said on Friday (Dec. 9).
The company, which was formed in 2021 as a result of Fiat and Peugeot merging, said the industry is grappling with pandemic-related challenges and the global microchip shortage. It specifically blamed costs related to electric vehicle manufacturing for its decision, which comes on the heels of disappointing sales for the Jeep Cherokee model built at the Illinois plant.
Charted: Jeep Cherokee sales plummeting
Jeep Cherokee and EV costs, by the digits
1965: Year the Belvidere plant opened under the Chrysler banner, with a white Plymouth Fury II sedan as the first vehicle to roll off the line. Over the years, it’s made many models including the Dodge Neon and Chrysler New Yorker
$350 million: Size of the investment towards the production of Jeep Cherokee at the plant in 2016
70%: Workforce slashed at the Belvidere plant in the three years leading up to May 2022 as Jeep Cherokee sales fell
1,350: People currently employed at the Belvidere plant who are at risk of being laid off. Stellantis didn’t specify how many are losing their jobs
$4,500: EV-specific costs, which have more than doubled from roughly $2,000 before the pandemic
$31 billion: How much Stellantis has earmarked for its software and electrification transformation through 2025
50%: EVs share of US sales Stellantis projects by 2030
What will happen to Stellantis’ 1,350 Belvidere workers?
Stellantis said it issued WARN notices to both hourly and salaried employees. This refers to the federal Worker Adjustment and Retraining Notification Act (WARN Act), which requires employers with more than 100 employees to provide 60 days’ advance written notice prior to a mass layoff that is expected to affect at least 50 employees at any single site.
The company said it plans to accommodate as many workers as possible “in open full-time positions as they become available.” Meanwhile, Illinois governor J.B. Pritzker’s administration said a response team has been assembled to help displaced workers find new employment and make retraining programs available.
What will Stellantis make at the Belvidere plant now?
Stellantis didn’t comment on the Cherokee nameplate but the company spokesperson Jodi Tinson told AP News it’s “committed long term to this mid-size SUV segment.”
The automaker said it is working to find ways to repurpose the factory, but United Auto Workers is not so sure. Tim Ferguson, shop chairman for UAW union Local 1268, which represents the Illinois plant’s hourly workers, thinks Stellantis plans to shutter this plant. He told Reuters that company documents show Cherokee production being moved to Stellantis’ Toluca, Mexico, plant.
In a statement, UAW vice president and director of the Stellantis department, Cindy Estrada, said the union was “deeply angered” by the decision. “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,” Estrada rued. UAW President Ray Curry called the move “grossly misguided” and the timing of it—just before the holidays—”cruel.”
Related stories
✌️ Biden’s EV subsidies are creating winners and some seriously sore losers at home and abroad
💸 Why Elon Musk is no longer a fan of government subsidies for electric cars
🚗 Why electric cars are getting pricier even as batteries get cheaper