Stellantis blames electric vehicles for its upcoming Jeep layoffs
Stellantis, the company behind Fiat, Dodge and Jeep, announced plans to shut down one of its factories and lay off 1,200 workers in February. His reasoning? The pressure of COVID-19, of course, with a hint of chip shortages — but above all all those electric vehicles that he has to manufacture.
The plant in question is the one that builds Jeep Cherokees in Illinois, and the news comes as the automaker prepares for labor negotiations. While United Auto Workers argues that “the transition to electrification also creates opportunities” at the plant, an unnamed Stellantis spokesperson said CNBC and The Wall Street Journal that was rather the reason for the stoppage. “The biggest challenge is the rising costs of electrifying the automotive market,” the company says, adding that it is exploring other uses for the plant and trying to find jobs for it. the workers it lays off.
Stellantis spends billions on electric vehicles
But let’s back up for a second – one of the world’s biggest automakers says it has to close a factory indefinitely because of how much does electrification cost? That’s a bold claim, especially since it comes from a company that I would consider in distant third in the race for the big three American automakers to move their lineups from gas to batteries. It also doesn’t help that Stellantis has promised quite a few electrified Jeeps, and it’s hard to see why that factory couldn’t play a part in making these vehicles, at least one of which is to be published next year (and many of which have been very hard to find).
That’s not to say Stellantis isn’t spending a lot on electric vehicles — it’s promised to split a bill of up to $3 billion with Samsung for a battery plant in Indiana, and that’s invest $4.1 billion in a similar facility located in Canada, this time with LG. But it’s not an incredibly large investment compared to some of its peers: GM is spend $7 billion on one of his Three Ongoing EV Battery Plants, Honda help build a $4.4 billion plant in Ohio (and spending an additional $700 million to retool existing facilities), and Ford announced it is building three EV-related locations with a price tag of over $11.4 billion.
Ford is an interesting comparison, as it also suffered a recent round of layoffs, cutting around 3,000 jobs. No prizes for guessing one of the excuses he gave to the employees; “We have the opportunity to lead this exciting new era of connected and electric vehicles,” read a note from CEO Jim Farley and Chairman Bill Ford. “Building that future requires changing and reshaping virtually every aspect of how we have operated for over a century.” This, of course, meant cutting jobs.
It’s too early to tell if electric vehicles will become a common scapegoat if the auto industry continues to lay off workers, but now we have at least two companies trying to showcase the livelihoods of thousands of people like the cost of the future. (Native EV companies like Tesla or Rivian, which also had their clean massive rounds of layoffs this year, don’t have that luxury.)