Multinational automaker Stellantis is indefinitely closing an assembly plant in Illinois in February and laying off hundreds of workers, in large part due to the high cost of making electric vehicles.
Stellantis noted in a statement emailed to FOX Business on Friday that the industry had been adversely affected by factors including the ongoing COVID-19 pandemic, the global microchip shortage, and the increasing cost related to the electrification of the automotive market, which it said was the most impactful.
The automaker said that a number of actions had been taken to stabilize production and improve efficiency at its North American facilities to “preserve affordability and customer satisfaction in terms of quality.”
However, while considering other avenues to optimize operations, Stellantis said the decision had been made to idle the Belvedere plant starting on Feb. 28, 2023.
“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,” it said. “The company will make every effort to place indefinitely laid-off employees in open full-time positions as they become available.”
Stellantis also noted that it is working to identify other opportunities to repurpose the facility.
There are about 1,350 workers at the Belvedere plant, which produces the Jeep Cherokee.
Stellantis reportedly told The Associated Press that that automaker would not comment 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,” Stellantis spokesperson Jodi Tinson told the agency.
Stellantis has said it will invest more than $31 billion through 2025 on electrifying its vehicle lineup, with electric vehicles to make up half of its U.S. sales by 2030.
A spokesperson for Gov. J.B. Pritzker’s administration, Jordan Abudeyyeh, said a response team from the state’s Department of Commerce and Economic Opportunity had been assembled to help displaced workers find new employment.
She said the administration will work with local elected officials, community colleges, and others to ensure that appropriate retraining programs are available, and with Stellantis to find new uses for the Belvidere plant.