Stellantis announced plans to shutter its Illinois plant in February citing increasing costs in the electric vehicle as the reason, reported the automaker in a statement.
The move, part of a strategy to “stabilize production” and “improve efficiency” at the automaker’s North American facilities, will affect 1,350 employees who will be indefinitely laid off, the company noted.
“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 said in a statement.
The automaker plans to idle its Belvidere, Illinois, assembly plant on February 23 and expects the resulting layoffs to exceed six months.
Stellantis, the parent company of Chrysler, Dodge and Jeep, has promised to “make every effort” to place affected employees in open positions and is examining ways to repurpose the Belvidere factory.
The United Auto Workers International Union noted on Facebook that it was “deeply angered” by the decision. The group’s president Ray Curry called the decision “unacceptable” because Stellantis isn’t allocating new products to the plant.
Currently, the Illinois plant builds Jeep Cherokees and will continue to do so until the factory closes.
“This is an important vehicle in the lineup, and we remain committed long term to this mid-size SUV segment,” Jodi Tinson, a Stellantis spokesperson, said in a statement.
In July 2021, Stellantis announced plans to invest $33.5 billion by 2025 to expand its portfolio of electric vehicles. At that time, the company reported plans to have 70% of its European sales and 40% of its U.S. sales be fully electric or plug-in hybrid vehicles within four years.