By on November 11, 2021

Jeep Assembly

Blaming the global shortage of semiconductors and related supply chain challenges, Stellantis has announced another round of cuts at one of its factories. According to a report in the Detroit News, about 400 workers have been informed of an ‘employee reduction’ that will take effect early next calendar year.

Jobs on the block are those at the spellcheck-vexing Belvidere Assembly, a facility currently pumping out copies of the Jeep Cherokee. A total of 2,362 hourly staff work onsite, in addition to just shy of 200 salaried personnel. That’s one shift, by the way, after a second shift vanished earlier this year. That action impacted over 1,600 people. While the company said it would try to find places for laid-off hourly workers in open full-time spots at other locations, it is worth noting that Belvidere Assembly is the sole Stellantis assembly plant in the state.

Company spox made a statement talking about the need to “balance global sales with production”, a phrase that usually portends the lack of customer interest in a particular model. However, given the current supply chain mess, reduced sales don’t necessarily mean customers aren’t interested; Cherokee’s 20 percent YOY drop in sales can be at least partially attributed to the lack of chips to build the thing.

Noise has recently been made by people in key positions at Belvidere that the place will need investment in order to weather the coming transition to electric vehicles. The state recently announced a variety of tax incentives, passed as part of a bill to tempt electric vehicle makers and suppliers in their decision-making processes. Surely those in charge have their eyes on an announcement made last month that Stellantis will invest over $200 million in three of its Indiana plants to help the company reach its goal of achieving 40 percent low-emission vehicle sales in the U.S. by 2030.

Belvidere Assembly has a long history stretching back to 1965 when it began making Dodge and Plymouth two- and four-door models plus a few wagons for those brands. It switched to making the Omnirizon compact car for the duration of that vehicle’s run before undergoing a multi-million dollar retooling to produce the Dodge Dynasty and its various cousins. That gave way to the mid-90s Neon and its subsequent replacement models like the Caliber.

It was announced in 2016 that $350 million would be plowed into the place in preparation to produce the Jeep Cherokee, which moved from its production facility in Toledo. Cherokee production began in June 2017 and returned to a two-shift operating pattern in May 2019 before being reduced back to the aforementioned one-shift schedule in July 2021.

No changes have been announced for the nearby Belvidere Satellite Stamping Plant, a 330,000 sq. ft facility whose workforce numbers are rolled into the figures listed above.

[Image: Stellantis]

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24 Comments on “Stellantis to Cut Jobs at Jeep Plant in Illinois...”


  • avatar
    jmo

    Here is what I’m struggling to understand. I ran into an old friend the other day that at the start of the pandemic had a 5 year old RAV4 with 150k miles on it. This mostly due to a long commute. She said since the pandemic and full time work from home, she’s put on another 5k miles. She’s thrilled that rather than need a new car in 2 years it might be 5 or 6 before she needs a new one.

    Looking at the miles driven data – it’s down significantly since Jan/Feb 2020. So where is all this demand coming from for both cars and oil?

    • 0 avatar
      SCE to AUX

      I don’t think there is 17 million cars’ worth of demand, like a few years ago. IIRC, the ‘experts’ put demand around 15 million.

      But even if demand outpaces production by say 10%, you’ll have price hikes.

      As for the Cherokee story, my guess is the plant foresees that they won’t be able to meet demand for quite a while because of part shortages, hence the layoffs.

    • 0 avatar
      dal20402

      People are taking more non-commute trips. US total vehicle miles traveled are greater than they were at the pre-pandemic peak. And a higher percentage of those miles are in private cars, given that the traditional commute trips happened more often on public transit.

  • avatar
    dantes_inferno

    Nothing like a group of happy remaining workers manufacturing new cars after job cuts. Quite the morale booster.

    I would be wary of purchasing any new vehicle these days.

  • avatar
    gasser

    Good for your friend. Demand for autos, however, has soared in areas where many previously took public transportation like buses and (NYC, Chicago) subways. People were terrified of crowds. That sucked up a lot of inventory. Also, in areas without much public transportation, you still have to replace cars that have expiring leases or that are lost to flooding and/or accidents. Now, here in Los Angeles, traffic has returned with a vengeance and I can understand that any shortfall in gasoline production is sending gas prices up and up.

  • avatar
    el scotto

    Vehicles used to be grossly overproduced. Witness the endless sales from the Big 3. The Europeans and Japanese had some sense, they had have boats bring over their excessive inventory and thusly didn’t have that much.

    Before the chip shortage people could use their stimulus checks for a down payment on a new car. Stimulus checks are gone and car makers have vehicles sitting around waiting for chips to be installed. Perhaps the market has reached equilibrium? Your food route salesman knows how much product to leave at each grocery store.

    • 0 avatar
      Scoutdude

      “Your food route salesman knows how much product to leave at each grocery store.” There is a big difference between food and automobiles. The need for food is a fact of life, you can’t really put off buying food for too long.

      The standard for the route salesman with an existing product is to “build to” a certain inventory level, in other words they typically only react to past demand. It will take the store telling them that the “build to” number is insufficient, otherwise they have no way to know if that product sold out the day after they left the store, or if the last one left the shelf as they were pulling into the parking lot.

      • 0 avatar
        el scotto

        @Scoutdude Sir, mea culpa. All I knew when I was a lad was that if I kept Pepsi bottles sorted and stacked, the Pepsi guy would give us two cases of Pepsi and 10 bucks each for our trip to Kings Island. My world was much smaller back then. The Archway cookie guy was always taking the hot cashier chicks out to lunch in his T-Bird. Never mind he had one of the aircraft carrier-sized T-birds and could haul his inventory of cookies in his trunk.

        Do grocery stores not share their sales data with route salesmen? Yes, I’ll gladly tell the Harris-Teeter manager they were out of Archway ginger snaps.

        • 0 avatar
          Scoutdude

          I’m not sure if the stores now share that info with the salesman or not. It was a long, long time ago when I was a salesman calling on grocery and convenience stores.

  • avatar
    Gardiner Westbound

    “The state recently announced a variety of tax incentives, passed as part of a bill to tempt electric vehicle makers and suppliers in their decision-making processes.”

    Does anybody remember when corporations self-financed their capital costs?

    • 0 avatar
      Lorenzo

      I wasn’t around then, but that was during the depression. Then along came WW2, and the government started building plants FOR the automakers, and even paid for tech development costs.

      Read Part V of the Imperial story, and you’ll learn that Chrysler’s hemi V-8 was partly developed for aircraft engines, and adapted to automobiles. With no new cars for three years, and people working overtime in defense plants, and no products to spend on, the auto business boomed for a decade after the war.

  • avatar
    dal20402

    This whole intersection of a spike in demand and a hiccup in supply shows just how finely balanced modern markets are. We’re probably looking at less than a 10% change in the supply-demand relationship. Yet that’s enough to change prices by much more than 10%. Unbelievably, KBB on my Highlander Hybrid has gone up by over 30% since the start of the pandemic, even though it’s gotten a year older and we’ve added about 6k miles. Real-world transaction prices on a lot of high-demand new vehicles have taken a similar arc.

    • 0 avatar
      SCE to AUX

      Agreed.

      Excess supply got cash on the hood. Excess demand means you pay more.

      I’m impressed with the non-linearity of the response these days. At the least, it will provide economists fascinating data since most of the time we’ve had abundant supply in almost every part of the economy.

      It’s a bit like a wartime economy, I suppose.

  • avatar
    Dartdude

    The problem is that the Cherokee is pass it sales date. Stellantis needs to update the Cherokee like yesterday. There is too much competition in SUV category it competes in for it sit still.

    • 0 avatar
      EBFlex

      It’s still very competitive. Great fuel economy, actual capability, modern tech, and they didn’t cheap out (all models get full LED lighting, Apple car play/off-brand auto, etc). Not much more you can ask for

  • avatar
    Oberkanone

    Horizon / Omni assembled at Belvidere. Chryslers 1st world car.

    Time for another world vehicle. Electric Jeep?

  • avatar
    CurrentBAPemployee

    Couldn’t help but notice that you fail to mention the 75%-100% tax incentives just passed in the recent bill on Oct. 28th in Illinois, for employers that hire ‘new hires’ to work in EV manufacturing plants… Which Belvidere Assembly Plant will be when they retool it next year. (They’ve been bringing in EV production tools since 2019 into the plant) so this really was an inside job to once again put money in people’s pocket, all those involved in high places. Saved Stellantis huge money, I’m sure Pritzker got a huge kickback, as well as the Union for pushing through a garbage contract in 2020… But hey we can’t all see the truth ‍♂️

    • 0 avatar
      tonycd

      Current, I’m a fellow Illinoisan. In my personal opinion, your evidence-free claim that “Pritzker got a huge kickback” is partisan garbage. If he didn’t use tax policy to protect your job, you’d scream bloody murder about that, too. I’m completely opposed to the race to bottom we’re seeing between states to grab places of employment by excusing them from paying their taxes, but it’s a reality at this point.

      • 0 avatar
        28-Cars-Later

        “In my personal opinion, your evidence-free claim that “Pritzker got a huge kickback” is partisan garbage.”

        You do realize you have recent governors who did federal time, right? I don’t know if that is true but the likelihood is very true. I also find your fiscal wisdom, which I agree with, to be very ironic in a state that is completely insolvent.

  • avatar
    Oberkanone

    I was thinking along the lines of https://www.autoevolution.com/news/jeep-rendering-looks-like-a-next-level-wrangler-probably-electric-as-well-151258.html#agal_0

  • avatar
    EBFlex

    This is a fake shortage at this specific plant. Jeep is redirecting chips to higher profit products. The sales numbers from last quarter explain this very well:

    Grand Cherokee (new L included) – 81,803 81% increase
    Cherokee – 11,592 -72% from last year

    Next quarter you will see strong numbers for the Wagoneer and Grand Wagoneer but sacrificing other, older products.

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