Multinational car manufacturer Stellantis is closing down indefinitely assembly plant in Illinois in February and laying off hundreds of workers, largely due to the high cost of producing electric vehicles.
Stellantis noted in a statement emailed to FOX Business on Friday that the industry has been adversely affected by factors including the ongoing COVID-19 pandemic, a global microchip shortage and rising costs associated with the electrification of the automotive market, which it says is the most the impactful .
The automaker said a number of actions have been taken to stabilize production and improve its efficiency North American facilities to “maintain affordability and customer satisfaction in terms of quality”.
However, while considering other avenues to streamline operations, Stellantis said the decision was made to shut down the Belvedere plant from February 28, 2023.
“This is a 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 (WARN) Act. As a result, WARN notices have been issued to both hourly and salaried employees,” it said. “The company will make every effort to place indefinitely laid-off employees in full-time positions as they become available .”
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Stellantis also noted that it is working to identify other opportunities to repurpose the facility.
The Belvedere plant, which makes the Jeep Cherokee, employs about 1,350 people.
Stellantis reportedly told The Associated Press that the automaker would not comment on the future of the “Cherokee nameplate.”
“This is an important vehicle in the lineup and we remain committed to this mid-size SUV segment for the long term,” Stellantis spokesperson Jody Tinson told the agency.
Stellantis said it will invest more than $31 billion by 2025 in electrifying its car range, with electric vehicles make up half of its US sales by 2030.
A spokesman for the administration of Governor J. B. Pritzker, Jordan Abudeye, said a response team from the state’s Department of Commerce and Economic Opportunity has been assembled to help the displaced workers find new jobs.
She said the administration will work with local elected officials, community colleges and others to ensure appropriate retraining programs are available, as well as with Stellantis to find new uses for the Belvidere plant.
Reuters and The Associated Press contributed to this report.
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