(CNN) -- Stellantis is shuttering its Illinois plant in February resulting in indefinite layoffs for 1,350 employees, the company said in a statement, citing increasing costs in the electric vehicle market.
“Our industry has been adversely affected by a multitude of factors like the ongoing Covid-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market,” Stellantis said in a statement. The company said it is taking steps “stabilize production” and “improve efficiency” in its North American facilities.
The European carmaker said it will “idle” the assembly plant in Belvidere, Illinois on Feb. 23 and said the layoffs are expected to exceed six months. Stellantis, the parent company of Chrysler, Dodge and Jeep, said it will “make every effort” to place the laid off employees in open positions and is looking for other opportunities to repurpose the Belvidere factory.
The United Auto Workers International Union said on Facebook it was “deeply angered” by the decision. The group’s president Ray Curry said it is “unacceptable” Stellantis isn’t allocating new products to the plant.
The Illinois plant builds the Jeep Cherokee and will continue to manufacture the vehicle until the factory closes, but the company had no comment about the future of that make and model.
“This is an important vehicle in the lineup, and we remain committed long term to this mid-size SUV segment,” Jodi Tinson, a Stellantis spokesperson, said in a statement.
In October, the company said its joint venture producing Jeep vehicles in China is filing for bankruptcy.
Last July, Stellantis made a $35.5 billion commitment to electric vehicles by the end of 2025 to expand its portfolio. The company planned for 70% of its European sales and 40% of its U.S. sales to either be fully electric or plug-in hybrid vehicles within four years, CEO Carlos Tavares said.
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