Economy

Automaker Stellantis is laying off hundreds of American workers, blaming the high cost of making electric cars

The multinational car manufacturer Stellantis will indefinitely close one assembly plant in Illinois in February and laying off hundreds of workers, largely due to the high cost of manufacturing electric cars.

Stellantis noted in a statement sent to FOX Business on Friday that the industry had been adversely affected by factors including the ongoing COVID-19 pandemic, the global shortage of microchips and the rising costs associated with the electrification of the automotive market, which it said was the most influential.

the automaker said a number of measures had been taken to stabilize production and improve efficiency on its North American facilities to “maintain affordability and customer satisfaction in terms of quality.”

But while considering other options to optimize operations, Stellantis said the decision had been made to idle the Belvedere facility starting Feb. 28, 2023.

BLUE APRON FROM 10% OF THE COMPANY’S WORKFORCE

The Stellantis plant is seen in Dundee, Michigan

Engines are lifted at Stellantis Dundee Engine Complex on August 18, 2022 in Dundee, Michigan. (Bill Pugliano/Getty Images/Getty Images)

The Stellantis logo

A Stellantis sign outside the company’s headquarters in Auburn Hills, Michigan, June 10, 2021. (REUTERS/Rebecca Cook/Reuters Photos)

“This difficult but necessary action will result in indefinite layoffs, which is expected to exceed six months and may constitute a job loss under the Worker Adjustment and Retraining Notification Act (WARN). As a result, WARN notices have been issued to both hourly and white-collar workers,” it said. “The company will make every effort to place indefinitely furloughed employees in open full-time positions as they become available.”

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Stellantis also noted that it is working to identify other opportunities to reuse the facility.

There are about 1,350 workers at the Belvedere plant, which produces the Jeep Cherokee.

Jeep Cherokees outside the FCA Belvidere Assembly Plant

Jeep Cherokees line a parking lot outside the FCA Belvidere Assembly Plant in Belvidere, Illinois, where the vehicle is produced, in 2018. Stellantis is closing the plant indefinitely at the end of February. (Chris Sweda/Chicago Tribune/Tribune News Service via Getty Images/Getty Images)

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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 midsize SUV segment long-term,” Stellanti spokeswoman Jodi Tinson told the agency.

Belvidere Assembly plant

FILE PHOTO: Chrysler Belvidere Assembly plant in Belvidere, Illinois. (REUTERS/Frank Polich/File Photo/Reuters Photos)

Stellantis has said it will invest more than $31 billion by 2025 to electrify its car range with electric vehicles for accounting for half of its sales in the United States by 2030.

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A spokesman for Gov. JB Pritzker’s administration, Jordan Abudeyyeh, said a response team from the state Department of Commerce and Economic Opportunity had been assembled to help displaced workers find new employment.

She said the administration will work with local elected officials, community colleges and others to ensure appropriate retraining programs are available, and with Stellantis to find new uses for the Belvidere facility.

Reuters and The Associated Press contributed to this report.

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