The Jeep Cherokee's Future Doesn't Look All That Great
Stellantis said Friday it would idle a plant in Belvidere, Illinois, early next year, resulting in 'indefinite layoffs.' That plant assembles Cherokees.
Erik Shilling
Photo: Jeep
Through the third quarter of this year, Jeep Cherokee sales are down a whopping 61 percent year-to-date compared to last year, with just 30,852 sold in the first nine months of 2022, according to Stellantis. Which is the context for an announcement on Friday that Stellantis will be idling the plant that makes Cherokees, in Belvidere, Illinois. Could it be the end of the road for Cherokee, too? For now, Stellantis isn't saying.
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Via WIFR, Stellantis has released the following statement:
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 has taken a number of actions to stabilize production and improve efficiency at its North American facilities to preserve affordability and customer satisfaction in terms of quality.
While it considers other avenues to optimize operations, Stellantis has made the decision to idle the Belvidere (Illinois) Assembly plant effective Feb. 28, 2023.
This difficult but necessary action will result in indefinite layoffs, which are expected to exceed six months and may constitute a job loss under the Worker Adjustment and Retraining Notification (WARN) Act. As a result, WARN notices have been issued to both hourly and salaried employees. The company will make every effort to place indefinitely laid-off employees in open full-time positions as they become available.
The company also is working to identify other opportunities to repurpose the Belvidere facility and has no additional details to share at this time.
The UAW, which represents workers at the plant, also released a statement, and they are pretty mad:
"We are all deeply angered by Stellantis' s decision to idle the Belvidere Assembly plant without a plan for future product," says UAW Vice President and Director of the Stellantis Department Cindy Estrada. "There are many vehicle platforms imported from other countries that could be built in Belvidere with skill and quality by UAW members at Belvidere. The transition to electrification also creates opportunities for new product. Companies like Stellantis receive billions in government incentives to transition to clean energy. It is an insult to all taxpayers that they are not investing that money back into our communities."
"We believe Stellantis is grossly misguided in idling this plant which has produced profits for the company since 1965," adds UAW President Ray Curry. "Not allocating new product to plants like Belvidere is unacceptable. Announcing the closure just a few weeks from the holidays is also a cruel disregard for the contributions of our members from UAW Locals 1268 and 1761. We will fight back against this announcement."
Some 1,350 employees work at Belvidere, according to a Stellantis spokeswoman, employees who are now presumably very much concerned for their futures, a story that has played out across the Midwest over and over for decades now, as automakers have shuttered plants and left behind broken communities in their wake.
It was as recent as 2016 when Stellantis announced that it would be investing $350 million in the Belvidere plant to help make the Cherokee, though it's been almost nothing but bad news ever since for Belvidere, with waves of layoffs in the past few years, including earlier this year. Those came amid the same sorts of supply chain problems every automaker has been dealing in recent years, but they also came because sales of the Cherokee have simply cratered.
For now, Stellantis isn't saying if Cherokee will exit along with the idling of the plant, but they aren't exactly saying it won't, either. The Stellantis spokeswoman said this about it for now:
We are not commenting on the future of the Cherokee nameplate. This is an important vehicle in the lineup, and we remain committed long term to this mid-size SUV segment.