Stellantis to cut about 400 more jobs at Jeep Cherokee plant in Illinois

Breana Noble
The Detroit News

Stellantis NV will cut about 400 more jobs at its Jeep Cherokee factory in Illinois amid a global shortage of semiconductors that already has whacked production and cut a shift at Belvidere Assembly Plant.

The workforce reduction will take effect as early as Jan. 14. Employees received notices on Wednesday, the automaker said in a statement, adding it will try to place laid-off hourly employees in open full-time positions at other company locations as they become available based on seniority. Stellantis doesn't have another assembly plant in Illinois.

The Belvidere Assembly Plant on March 24, 2020 in Belvidere, Illinois.

The plant employs 2,362 hourly workers after a second shift was cut there in July, affecting 1,641 people.

"As we continue to balance global sales with production of the Jeep Cherokee produced at the Belvidere (III.) Assembly Plant, which has been further exacerbated by the unprecedented global microchip shortage," spokeswoman Jodi Tinson said in a statement, "Stellantis has determined that additional staffing actions are needed as a result of changes in the plant’s operations."

The automaker said it also notified the state of Illinois, the city of Belvidere and the United Auto Workers.

The announcement comes after the Illinois State Legislature on Oct. 28 passed an incentive bill for electric vehicle makers and suppliers that was sent to Gov. J.B. Pritzker. It includes state income tax credits of 75% to 100% of payroll taxes for new employees they hire for up to 15 years. Among other incentives, tax credits also would be available for hiring construction workers and training workers.

"It is the intent of the General Assembly that Illinois should lead the nation in the production of electric vehicles," the bill reads. "Illinois must aggressively adopt new business development investment tools so that Illinois is more competitive in site location decision-making for manufacturing facilities directly related to the electric vehicle industry."

Leaders in Belvidere and Boone County have said the plant needs investment for electric vehicles to survive. The plant has lost about 122,000 vehicles produced in 2021 because of the microchip shortage, according to Tuesday estimates from AutoForecast Solutions LLC, though it's operating this week. U.S. Cherokee crossover sales are down 20% year-to-date.

The Belvidere City Council in September submitted a resolution to the governor's office supporting efforts to incentivize investment for EVs in the state, noting the state of Illinois had notified the company it would lose approximately $9.5 million a year from a state program that provides annual corporate tax credits to businesses that support job creation and capital investment. 

In a letter with the city's resolution, Mayor Clinton Morris wrote: "The City, Region and State cannot afford to be passive spectators, and be outhustled in securing future critical employment for our citizens."

Twitter: @BreanaCNoble