Jeep Plant Shutdown Imperils Illinois Town and 1,350 Workers

https://news.yahoo.com/jeep-plant-shutdown-imperils-illinois-
191012171.html

BELVIDERE, Ill. — The Jeep Cherokee was a strong seller just a few years 
ago. In 2019, a plant in Belvidere produced about 190,000 of the sport 
utility vehicles, employing close to 5,000 people and operating three 
shifts a day.

Since then, sales have fallen. The factory laid off the third shift, and 
then the second. This year it is on track to make fewer than 20,000 
vehicles.

Even so, it was a shock when the manufacturer, Stellantis, announced this 
month that the 57-year-old plant would shut down indefinitely at the end 
of February, putting 1,350 people out of work. And there is fear across 
the area, an hour’s drive west of Chicago, that “indefinitely” could mean 
forever.

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Shane Mathison, a line operator who has worked at the Belvidere plant 
since 2006, said the news hit hard at home, especially for his wife. 
“She’s freaking out,” he said. “She’s scared to death. But I told her, 
we’ll make ends meet. If I have to wash dishes at two different places, I 
will. I have to do what I have to do for the family.”

The prospective shutdown is a fresh sign of upheaval in the American auto 
industry. Beyond threatening economic pain locally, it adds a contentious 
element to looming labor negotiations with the company and a hard-fought 
leadership race in the United Auto Workers union.

Sales of the Jeep Cherokee, a midsize sport utility vehicle, have been 
slowed by the shortage of computer chips that has hindered auto production 
around the world for the last two years. Several times Stellantis has 
halted Cherokee production to divert the chips it had to larger, more 
profitable vehicles such as the Grand Cherokee and trucks like the Ram 
pickup.

The Cherokee is also in a crowded, highly competitive segment, and is an 
aging model. It had its last major redesign in 2014. By contrast, new 
versions of the Chevrolet Equinox, Ford Escape and Toyota RAV4 have all 
been introduced in the last four years. An updated Honda CR-V arrived this 
summer.

At the same time, the auto industry is investing billions of dollars to 
transition to electric vehicles, one of the most fundamental shifts in the 
industry in more than 100 years. A half dozen automakers are building 
battery plants in Georgia, North Carolina, Michigan, Tennessee and 
Kentucky. Computer chip producers, moving in part to meet the automotive 
demand, plan new plants in Ohio, Michigan, New York and Arizona, with the 
help of subsidies under the CHIPS and Science Act, passed by Congress in 
July.

For now, the northwestern corner of Illinois is bracing for the effects of 
the idling of the plant, the largest employer in Belvidere, which has a 
population of 25,000. At Buchanan Street Pub, Jim Edwards, the bar 
manager, fretted at the notion.

“It’s been affecting us,” he said. “You don’t have that second and third 
shift coming by anymore. Most of the workers live here in Belvidere. It’s 
going to be a ghost town.”

The factory is also an important economic engine for a wider area. 
“There’s always a big hole left when a plant closes,” said Tom McNamara, 
mayor of Rockford, a city of 147,000 just west of Belvidere. “Auto 
assembly is a big jobs multiplier. When the plant closes, there are a lot 
of suppliers and other businesses that will be affected.”

Stellantis, formed two years ago through the merger of Fiat Chrysler and 
France’s Peugeot, is solidly profitable, having reported 8 billion euros 
($8.5 billion) in net income for the first half of the year. But it is 
also spending heavily to catch up to Tesla, General Motors and Ford Motor 
in EVs. The company said this year it would invest $2.5 billion to build a 
battery plant of its own in Indiana.

“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.

Kristin Dziczek, a policy adviser at the Federal Reserve Bank of Chicago 
who focuses on the auto industry, said Stellantis was encountering a 
challenge other automakers will face as they ramp up production of EVs and 
sales of conventional models decline.

“It’s tough,” she said. Keeping plants operating at full capacity “has 
been hard while companies have to put out a lot of money for the shift to 
EVs.”

Earlier this year, it seemed the Belvidere plant might become a key part 
of the company’s strategy. It was in the running to produce battery-
powered cars, but Stellantis chose to retool a plant in Brampton, Ontario, 
instead.

Stellantis said it planned to try to transfer Belvidere workers into 
positions at other plants that have openings.

Matt Frantzen, 48, a father of five who has worked at the plant since 
1994, said he would most likely have to take a transfer to another 
Stellantis location because he needed to work about another year before he 
could retire with full benefits.

“It may be Ohio,” he said. “It may be Michigan. But wherever it is, I’m so 
far invested, I have to go. I’ll leave my family in Belvidere, and I’ll go 
do my job until retirement. Then I’ll come home and look for new work.”

Eric Fulton, a 25-year employee who works in the plant’s paint reprocess 
department, said many Belvidere workers had been through downsizing in the 
past.

“A large portion of employees are transfers already, so we are numb to 
having to do it again,” he said. “It is very sad, but again, this is the 
norm that most of us are used to.”

The UAW, which is heading into contract negotiations with Stellantis next 
year, will push the company to keep Belvidere open and assign new models 
to the plant.

“A plant can’t be permanently shuttered without the buy-in from the UAW,” 
Dziczek said. “So this is a really significant round of talks coming up.”

The Detroit automakers have idled plants before past contract 
negotiations, only to reopen them after bargaining with the union. In 
2019, GM was winding down production at its Hamtramck plant in Detroit as 
contract talks began, and ended up agreeing to produce the first of its 
new generation of electric vehicles there.

In those same talks, however, GM closed its plant in Lordstown, Ohio, and 
resisted the union’s efforts to reopen it. While the Lordstown plant was 
sold, GM built a new battery plant a mile away. Workers at the battery 
plant this month voted overwhelmingly in favor of UAW representation.

The president of the UAW, Ray Curry, said in an interview that he had been 
having discussions since August with Stellantis’ chief executive, Carlos 
Tavares, as well as officials of the Biden administration and the Illinois 
governor’s office in a push to keep the Belvidere plant alive.

“The corporation is looking at scenarios for putting product in 
Belvidere,” he said, “and I can tell you the governor has not given up, I 
have not given up, and we are all advocating for the survival of that 
plant.”

The plant is certain to become a key topic next year when the UAW 
membership chooses a president. Curry finished slightly ahead of a reform 
candidate, Shawn Fain, in a field of five presidential candidates in a 
November election. Curry and Fain will face each other in a runoff early 
next year.

Fain said he would push Stellantis hard to assign new models to be built 
in Belvidere and preserve jobs. In the past, he said, UAW leaders have 
been too willing to accept wage, benefit and job concessions sought by 
Ford, GM and Stellantis.

“These companies have had near-record profits for 10 years now,” he said 
in an interview. “You have workers who’ve worked their butts off and have 
done their part.”

Even if the UAW is able to negotiate a future for the Belvidere plant, it 
will probably remain idle long enough to force some workers to retire, 
transfer or move on to new jobs.

Mathison, the union line operator at Belvidere, may be one of them. He 
said he planned to look into going back to school to become a certified 
nursing assistant because a transfer to another state would be difficult.

“I have three kids,” he said. “Both my mom and dad are up there in age. I 
can’t move. I’m basically going to have to start over at 47.”

© 2022 The New York Times Company

Comments:

Kenneth
10 hours ago

I've been wanting to buy a new vehicle for a long time. But when I see the 
prices, no way. Maybe a bunch of that unsold inventory will plant the idea 
that they would see more cars/trucks  sold if they try  less expensive 
vehicles. I bought my house for less than several new pickup trucks.


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