Stellantis is closing its Illinois plant in February, resulting in indefinite layoffs for 1,350 employees, the company said in a statement, citing rising costs in the electric vehicle market.
“Our industry has been affected by a multitude of factors such as the current Covid-19 pandemic and the global shortage of microchips, but the most significant challenge is the rising costs associated with the electrification of the automotive market,” said Stellantis in a statement. The company said it was taking steps to “stabilize production” and “improve efficiency” at its North American facilities.
The European automaker said it would idle the Belvidere, Ill., assembly plant on Feb. 23 and said layoffs are expected to exceed six months. Stellantis, the parent company of Chrysler, Dodge and Jeep, said it will “make every effort” to place laid-off employees in vacant positions and is looking for other opportunities to reorient the Belvidere plant.
The United Auto Workers International Union said on Facebook that it was “deeply irritated” by the decision. Group chairman Ray Curry said it was “unacceptable” that Stellantis was not awarding new products to the factory.
The Illinois plant builds the Jeep Cherokee and will continue to manufacture the vehicle until the plant closes, but the company has not commented on the future of this make and model.
“This is an important vehicle in the lineup, and we remain committed to this midsize SUV segment for the long term,” Stellantis spokesperson Jodi Tinson said in a statement.
In October, the company said its joint venture producing Jeep vehicles in China was bankruptcy filing.
Last July, Stellantis made a Commitment of $35.5 billion to electric vehicles by the end of 2025 to expand its portfolio. The company predicted that 70% of its European sales and 40% of its sales in the United States would be fully electric or plug-in hybrid vehicles within four years, CEO Carlos Tavares said.
– Peter Valdes-Dapena contributed to this report.