Jeep halts production at Illinois plant due to high electricity costs, lays off 1,350 workers

Stellantis will halt operations indefinitely at a Jeep Cherokee plant in Belvidere, Illinois, citing the high costs of developing electric vehicles. The move will leave 1,350 employees out of a job, effective February 28.

Stellantis cited several reasons for closing the plant, including the lack of microchips, but noted that “the most significant challenge is the increasing costs of the electrification of the automotive market.”

Electric vehicles are more expensive to manufacture than gas-powered cars, mainly due to high costs of the minerals in their batteries. Still, electric car sales nearly doubled this year with no sign of slowing, forcing most automakers — including Jeep — to electrify their lineups.

This year, Jeep announced plans(Opens in new window) to become the “world leader in electric SUVs.” The Jeep Wrangler 4xe plug-in electric hybrid is the most popular PHEV in the U.S., and Jeep will launch four all-electric SUVs by 2025. The Belvidere plant exclusively makes gas-powered Jeep Cherokee SUVs, sales of which have declined significantly in recent years, Yahoo reports(Opens in new window). Nearly 70% of the facility’s original workforce had been laid off before news of the shutdown.

2023 Jeep Grand Cherokee Trailhawk 4xe and 2023 Jeep Wrangler Rubicon 4xe EVs (Credit: Jeep)

“The company will make every effort to place indefinite-term employees in open full-time positions as they become available,” Stellantis said. Illinois Gov. JB Pritzker also says his administration will help displaced workers find new jobs because the plant is unlikely to reopen.

The United Automotive Workers (UAW) union released a statement of disapproval(Opens in new window) after the Dec. 9 decision and vowed to “fight back” against it. “Announcing the closing just weeks after the holidays is also a cruel disregard for the contributions of our members from UAW Locals 1268 and 1761,” the UAW said. “The transition to electrification also creates opportunities. Companies like Stellantis are getting billions in government incentives to transition to clean energy.”

Stellantis did not comment on the remaining life of the gasoline-powered Jeep Cherokee. “This is an important vehicle in the lineup, and we remain committed to this mid-size SUV segment for the long term,” company spokeswoman Jodi Tinson told Reuters(Opens in new window). Tim Ferguson, president of the UAW chapter that represents the plant’s Illinois workers, claims that Stellanti’s company documents show that Cherokee production is being moved to a facility in Mexico.

Recommended by our editors

The news came the same day as a UAW victory at a GM electric vehicle battery factory in Ohio, where workers voted overwhelmingly to unionize the plant, making it the first factory built specifically for electric vehicle-related parts and components to do so. Washington Post reports(Opens in new window).

President Biden at GM's electric vehicle factory.

President Biden visits General Motors’ Factory ZERO electric vehicle assembly plant with United Auto Workers President Ray Curry in 2021. (Credit: MANDEL NGAN/AFP/Getty Images)

President Biden has touted electric vehicles as a major source of job creation in various industries, including factory work, electrician work to install chargers and more. He addressed a crowd of electric union workers at the Detroit Auto Show last fall when he announced the release of federal funding for a nationwide charging network. Much of it will be built by unionized electricians.

Honda, General Motors and other major automakers have moved electric car production to the United States to qualify their vehicles for the $7,500 federal tax credit, which requires vehicles to be assembled in the United States. A new battery industry has also spurred a new “battery belt(Opens in new window)” of factories in the United States, generating thousands of jobs. But the closing of the Jeep Cherokee plant exposes the growing pains of this transition as automakers shift their resources to new facilities and product lines.

What’s New Now to get our top stories delivered to your inbox every morning.”,”first_published_at”:”2021-09-30T21:30:40.000000Z”,”published_at”:”2022-08-31T18:35:24.000000Z”,”last_published_at”:”2022-08-31T18:35:20.000000Z”,”created_at”:null,”updated_at”:”2022-08-31T18:35:24.000000Z”})” x-show=”showEmailSignUp()” class=”rounded bg-gray-lightest text-center md:px-32 md:py-8 p-4 mt-8 container-xs”>

Get our best stories!

Register for What’s new now to get our best stories delivered to your inbox every morning.

This newsletter may contain advertising, offers or affiliate links. Subscribing to a newsletter indicates your agreement to our terms of use and privacy policy. You can unsubscribe from the newsletters at any time.

Leave a Comment