Auto manufacturer Stellantis announced Friday it is shutting down an assembly plant in Belvidere, Illinois, citing the high cost of making electric vehicles.
The Belvidere plant, which makes the Jeep Cherokee SUV, employs about 1,350 workers who will be laid off when the facility is closed by the end of February.
“Our industry has been adversely affected by a multitude of factors like the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market,” Stellantis spokeswoman Jodi Tinson said in an email to FreightWaves. “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 Act.”
Tinson said the company is also working to identify other opportunities to repurpose the Belvidere facility but has no additional details to share at this time.
The United Auto Workers union (UAW) said in a statement it was “deeply angered” by the decision. UAW President Ray Curry said it is “unacceptable” that Stellantis isn’t allocating new products to the plant.
Tim Ferguson, chairman for UAW Local 1268, which represents the Belvidere plant’s hourly workers, told Reuters that documents from Stellantis show Cherokee production being moved to the company’s facility in Toluca, Mexico.
Tinson declined to comment on whether manufacturing of the Jeep Cherokee line would move to Mexico.
The Stellantis announcement comes just days after Mexico and Canada won a trade panel ruling over the U.S. regarding car-content manufacturing under the United States-Mexico-Canada Agreement.
In January, Stellantis (NYSE: STLA) signed a deal with Amazon to produce some of the company’s all-electric Ram ProMaster vans. Stellantis will launch production of the ProMaster in 2023 in North America but has not announced where it will take place.
Stellantis also made a $35.5 billion commitment in July to produce more EVs by the end of 2025 to expand its lineup of cars, trucks and vans.
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