Stellantis to close Illinois plant, lay off more than 1,000 workers, citing rising EV costs

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Stellantis is closing its Illinois plant in February, resulting in an indefinite layoff for 1,350 employees, the company said in a statement, citing rising costs in the electric vehicle market.

“Our industry has been adversely affected by multiple factors such as the ongoing Covid-19 pandemic and global microchip shortages, but the most impactful challenge is the rising costs associated with the electrification of the automotive market,” Stellantis said in a statement. The company said it was taking steps to “stabilize production” and “improve efficiency” at its North American facilities.

The European automaker said it would “discontinue” its assembly plant in Belvidere, Illinois on February 23 and said the layoffs are expected to last more than six months. Stellantis, the parent company of Chrysler, Dodge and Jeep, said it would “make every effort” to fill the vacant positions and is looking at other options to relocate the Belvidere factory.

The United Auto Workers International union said on Facebook that it was “deeply angered” by the decision. Group president Ray Currie said it was “unacceptable” that Stellantis was not providing new products to the plant.

The Illinois plant produces the Jeep Cherokee and will continue to produce the vehicle until the factory closes, but the company has no comment on the future of that make and model.

“This is an important vehicle in the lineup and we remain committed to this mid-size SUV segment for the long term,” Jody Tinson, a Stellantis spokesperson, said in a statement.

In October, the company said its joint venture to manufacture Jeep vehicles in China was one filing for bankruptcy.

Last July, Stellantis made a $35.5 billion commitment to electric vehicles by the end of 2025 to expand its portfolio. The company plans for 70 percent of its sales in Europe and 40 percent of its sales in the U.S. to be fully electric or hybrid vehicles within four years, Chief Executive Officer Carlos Tavares said.

— Peter Valdez-Dappena contributed to this report.