2016 Jeep Cherokee Sport
Source: Jeep
Detroit – stellar said Friday it plans to indefinitely idle a Jeep plant in Illinois early next year to cut costs as it invests in electric vehicles.
The transatlantic automaker, formerly known as Fiat Chrysler, said the plant would cease production as of February 28. The company said more than 1,200 workers at the facility that produces the Jeep Cherokee SUV will be placed on indefinite layoff.
“Our industry has been adversely affected by a number of 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 an emailed statement. ,
The company described the slowdown as a “difficult but necessary action”. It said it is “working to identify other opportunities to repurpose the Belvidere facility and has no additional details to share at this time.”
The Illinois plant is running on only one of three assembly shifts. It has been sporadically inactive during the coronavirus pandemic and ongoing semiconductor chip shortages.
Cherokee sales were down nearly 61% in the third quarter of this year, more than any other vehicle in Jeep’s lineup.
Stellantis did not immediately respond for comment on whether recession fears or the company’s collective bargaining deal with the United Auto Workers union next year played a role in his decision.
In late 2018, ahead of 2019 UAW talks with Detroit automakers, General Motors Announced plans to potentially close several facilities. Only one of the major assembly plants for the automaker — Lordstown Assembly in Ohio — actually closed after the talks.