The Belvidere Assembly Plant, which has seen its workforce slashed by 70% over the past three years amid lagging Jeep Cherokee sales, is girding for yet another round of layoffs in May.
Stellantis announced this week it plans to eliminate an undisclosed number of positions at the hard-hit auto plant near Rockford, which has been operating in fits and starts during the ongoing semiconductor shortage, and dramatically downsizing its workforce in the process.
The sprawling plant has been reduced from more than 5,000 workers to about 1,600 through a series of layoffs since 2019. The staffing cuts slated for May would allow the automaker to “operate the plant in a more sustainable manner,” Stellantis spokeswoman Jodi Tinson said in a statement Tuesday.
“The reductions will be achieved through a combination of retirement packages offered to eligible UAW-represented employees as well as layoffs of both hourly and salaried staff,” Tinson said. “The company notified affected employees, the state of Illinois, the city of Belvidere and the UAW March 28 that layoffs could begin as early as May 27, 2022, with retirements taking effect on May 31, 2022.”
Stellantis declined to disclose the number of positions it plans to eliminate.
More Top Picks Best Cashmere Sweaters For Men
The Belvidere plant became the exclusive home for the Jeep Cherokee in 2017. The region’s largest employer at its zenith, the plant had 5,464 workers on three shifts at the start of 2019, after building 270,000 of the SUVs during the previous year. But the plant has dramatically scaled back its workforce since then, slashing jobs and eliminating two shifts as demand for the Cherokee waned.
Last year, Jeep Cherokee sales fell 34% to 89,126 vehicles, according to Stellantis.
The first cut was the deepest with nearly 1,400 workers downsized out of a job in 2019 as the plant eliminated its third shift, a harbinger of harder days ahead.
Last year, the plant was mostly closed from March through October due to the semiconductor shortage. When production resumed in November, the Belvidere plant was reduced to one shift and about 2,100 employees.
Stellantis notified the state in November that it planned to lay off another 400 hourly workers beginning in January, due to declining Cherokee demand and the ongoing semiconductor shortage, which has disrupted production across the auto industry.
This year, the Belvidere plant was down nearly 40% of the time during the first quarter, including most recently the weeks of March 7 and March 14. It resumed production on March 21 with about 1,600 workers, Tinson said.
Production disruptions continue to roil the auto industry as the global semiconductor shortage enters its second year, with shutdowns at Ford’s Chicago Assembly Plant and production issues at the nascent Rivian EV plant in Normal also blamed on the chip shortage.
The Ford plant on the city’s Southeast Side, which makes the Ford Explorer, Lincoln Aviator and Police Interceptor SUVs, is currently operating at full capacity, but has more than a thousand new vehicles parked at the Chicagoland Speedway in Joliet awaiting chips before delivering them to dealerships.
“We have some vehicles parked at the speedway awaiting parts as a result of the semiconductor shortage,” Ford spokeswoman Kelli Felker said in an emailed statement. “We are working closely with our suppliers to address those production constraints and will ship the completed vehicles as soon as we can.”
Edmunds is projecting about 3.3 million new cars will be sold in the U.S. during the first quarter of 2022, a 15.2% year-over-year decline, due largely to the supply chain disruption.
But the car shopping website said 41% of new vehicles sold within the first week of arriving on a dealer lot, up from 20% last year, showing that demand remains strong — despite rising gas prices.
“Skyrocketing gas prices were top of mind for consumers in March, but the lack of inventory is what ultimately depressed new vehicle sales in the first quarter,” Jessica Caldwell, executive director of insights for Edmunds, said in a news release Wednesday.
Stellantis, which was created by the merger of Fiat Chrysler and Peugeot of France in January 2021, is projected to see a year-over-year sales decline of 10.7% in the first quarter, Edmunds said.
The Belvidere plant opened under the Chrysler banner in 1965, with a white Plymouth Fury II sedan the first vehicle to roll off the line. Over the years, the plant was retooled several times, and made everything from the Dodge Neon to the Chrysler New Yorker.
More Top Picks Best Massage Tables For Home Use
During Chrysler’s bankruptcy in 2009, the plant was down to 200 employees before Fiat and a government bailout rescued it and the company.
The plant seemed to hit its stride with the 2017 arrival of the Jeep Cherokee, the sweet spot in an auto industry where SUVs have supplanted cars in many family garages. But it has been mostly downhill for the Cherokee, and the plant, over the past three years.
While the plant continues to downsize, at least one industry analyst believes Belvidere could find new life at the center of the automaker’s plan to convert 40% of its U.S. production to electric vehicles by 2030.
Sam Fiorani, vice president global vehicle forecasting at AutoForecast Solutions, a Pennsylvania-based research firm, said Stellantis could retool the Belvidere plant and begin building EVs there by 2024, while moving production of the Cherokee to another plant outside of Illinois.
Stellantis declined to comment Wednesday on “rumor or speculation” about the future of the Belvidere plant.