Stellantis idles Jeep factory, lays off workers to cut EV costs

2016 Jeep Cherokee Sport

Source: Jeep

DETROIT – Stellantide said Friday it plans to idle a Jeep plant in Illinois indefinitely, starting early next year, to cut costs by investing in electric vehicles.

The transatlantic automaker, formerly known as Fiat Chrysler, has announced that the plant will cease production from February 28.

“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 said in an emailed statement. .

The company described idling as a “difficult but necessary action”. He said he was “working to identify other opportunities to repurpose the Belvidere facility and had no additional details to share at this time.”

The Illinois plant operated on only one of three assembly shifts. It has been sporadically inactive during the coronavirus pandemic and the ongoing shortage of semiconductor chips.

Cherokee sales were down about 61 percent in the third quarter of this year, more than any other vehicle in Jeep’s lineup.

Stellantis did not immediately respond on whether recession fears or the company’s collective bargaining next year with the United Auto Workers union played into its decision.

In late 2018, before UAW 2019 negotiations with Detroit automakers, General Engines announced plans to potentially close several facilities. Only one of the automaker’s major assembly plants – Lordstown Assembly in Ohio – actually closed as a result of the negotiations.

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