Multinational automaker Stellantis is closing an assembly plant in Illinois indefinitely and will lay off hundreds of workers, in large part because of the high cost of producing electric vehicles, according to Fox Business.
Stellantis noted that the industry had been adversely affected by factors including the global microchip shortage, the ongoing COVID-19 pandemic, and the growing cost related to the automotive market’s electrification, which it said was the most impactful.
The company said that some actions were taken to improve efficiency and stabilize production at its North American facilities to “preserve affordability and customer satisfaction in terms of quality.”
Stellantis to idle Belvidere plant in 2023
However, while considering other approaches to optimize operations, the automaker said the decision was taken to idle the Belvidere plant beginning on February 28 next year.
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 Worker Adjustment and Retraining Notification (WARN) Act. As a result, WARN notices have been issued to both hourly and salaried employees. The company will make every effort to place indefinitely laid off employees in open full-time positions as they become available.
Stellantis
In addition, the company noted that it’s working to determine other opportunities to repurpose the facility.
Notably, there are around 1,350 workers at the Belvidere plant, which builds the Jeep Cherokee.
Stellantis reportedly told The Associated Press that the automaker wouldn’t comment on the future of the “Cherokee nameplate.”
Stellantis spokesperson Jodi Tinson said this is a significant vehicle in the lineup, and the company remains committed to this mid-size SUV segment for the long run.
Stellantis to invest $31 billion through 2025
Furthermore, the carmaker said it will invest over $31 billion through 2025 in electrifying its vehicle lineup, with EVs making up half its US sales by 2030.
A spokesperson for Governor J.B. Pritzker’s administration, Jordan Abudeyyeh, noted a response team from the state’s Department of Commerce and Economic Opportunity was made to help displaced workers find new employment.
She said the administration would work with local elected officials, community colleges, and others to make sure appropriate retraining programs are available and with the automaker to find new uses for the Belvidere plant.
