Photo: Stellantis
The shift from combustion to electric vehicles is undoubtedly an industry-changing transition – with repercussions. For Stellantis, it means laying off roughly 1,350 employees and shutting down its Belvidere, Illinois, plant. The plant, which currently produces the Jeep Cherokee, was placed on 'idle' by the automaker on Tuesday. Simply put, Stellantis intends to close the factory permanently.
The move, instigated by a costly transition from producing internal combustion vehicles to EVs, will likely boil over into a painful strike during the national contract talks scheduled with the UAW (United Auto Workers) union over the summer, Reuters reported.
The Belvidere plant has a long history in Illinois. It started production in 1960, developing several Plymouths and Dodge cars. It boasts about 5 million square feet of space. By 1977, the then Chrysler Corporation changed the plant to focus on front-wheel-drive products.
The UAW sent a stern warning on Tuesday, saying the move by the auto company to idle the plant won't go uncontested. According to the Union Vice President, Rich Boyer, the company decided to shut down the plant out of corporate greed. He vowed to highlight these to the community, workers, taxpayers, and consumers.
"This economic dislocation is a choice made by Stellantis to reap even higher profit," he emphasized.
According to Stellantis CEO Carlos Tavares, the shift to electrification is 40% more expensive than developing ICEs. Passing the increased production costs to consumers will harm the automaker since they won't afford new cars.
The CEO said the company is searching for solutions for its Belvidere facility, which has no new car to build. The last Jeep Cherokee unit rolled off the factory's assembly line on Tuesday.
With the shift to electrification becoming more real daily, auto manufacturers are making hasty moves to stay afloat and reap benefits in the new market. Consequently, the focus now shifts from efficiency to affordability.
Tavares has been vocal about keeping electric vehicles affordable for the consumer. In 2021, during a Detroit online event hosted by Automotive Press, he emphasized that staying affordable while developing new electric car technology requires the automotive market to focus on cost reduction (even though it's 40% more expensive).
The American EV market is currently experiencing a price war between auto manufacturers – which is incidentally beneficial to consumers. In January, Tesla slashed EV prices in the United States and Europe, sometimes more than 20% off the sticker price, to fight off competitors.
New entrants in the U.S. market, VinFast, slashed lease prices on their VF 8 City Edition Model to be at par with legacy automakers in the territory.
Stellantis CEO told reporters that the company's recent efforts are a global issue, not a Belvidere issue.
The Belvidere plant has a long history in Illinois. It started production in 1960, developing several Plymouths and Dodge cars. It boasts about 5 million square feet of space. By 1977, the then Chrysler Corporation changed the plant to focus on front-wheel-drive products.
The UAW sent a stern warning on Tuesday, saying the move by the auto company to idle the plant won't go uncontested. According to the Union Vice President, Rich Boyer, the company decided to shut down the plant out of corporate greed. He vowed to highlight these to the community, workers, taxpayers, and consumers.
"This economic dislocation is a choice made by Stellantis to reap even higher profit," he emphasized.
According to Stellantis CEO Carlos Tavares, the shift to electrification is 40% more expensive than developing ICEs. Passing the increased production costs to consumers will harm the automaker since they won't afford new cars.
The CEO said the company is searching for solutions for its Belvidere facility, which has no new car to build. The last Jeep Cherokee unit rolled off the factory's assembly line on Tuesday.
With the shift to electrification becoming more real daily, auto manufacturers are making hasty moves to stay afloat and reap benefits in the new market. Consequently, the focus now shifts from efficiency to affordability.
Tavares has been vocal about keeping electric vehicles affordable for the consumer. In 2021, during a Detroit online event hosted by Automotive Press, he emphasized that staying affordable while developing new electric car technology requires the automotive market to focus on cost reduction (even though it's 40% more expensive).
The American EV market is currently experiencing a price war between auto manufacturers – which is incidentally beneficial to consumers. In January, Tesla slashed EV prices in the United States and Europe, sometimes more than 20% off the sticker price, to fight off competitors.
New entrants in the U.S. market, VinFast, slashed lease prices on their VF 8 City Edition Model to be at par with legacy automakers in the territory.
Stellantis CEO told reporters that the company's recent efforts are a global issue, not a Belvidere issue.
“Stellantis’ ill-advised decision will have negative repercussions throughout the region and supplier network. It will disrupt lives, uproot families, and leave communities struggling to find economic drivers to pay for schools, roads and other services.” https://t.co/axpckShkjB
— UAW (@UAW) February 28, 2023
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