Illinois Jeep Factory Set To Lay Off 1,600 Workers Amid Global Semiconductor Shortage

Tyler Durden's Photo
by Tyler Durden
Monday, May 17, 2021 - 11:30 PM

A Jeep Cherokee factory is cutting 1,600 jobs in Northern Illinois as the auto industry continues to struggle with the global shortage of semiconductors.

The U.S. arm of Stellantis announced this week is was going to cut one of its two work shifts at the Belvidere Assembly Plant as of July 26. 1,641 workers could be affected, a local NBC affiliate reported over the weekend. 

Company spokeswoman Jodi Tinson claimed that the company was trying to “balance sales with production,” and that the factory’s situation “has been further exacerbated by the unprecedented global microchip shortage.”

This stands at odds with comments made by the company's CFO earlier this month, when we reported that Chief Financial Officer Richard Palmer said the semi shortage impact would be higher in Q2, but also said it "is still very controlled".

The plant has been idled since late March, the report notes. Its re-opening has been delayed and isn't expected until "at least" later this month. 

Recall, we last wrote about Stellantis at the beginning of May, after the auto maker said there was "no end in sight" to the ongoing semi chip shortage. 

The company said in its report earlier this month that it lost production of 190,000 vehicles due to the shortage. The world's fourth largest carmaker said that 8 of its 44 plants were affected by the shortage, ultimately resulting in reductions in shifts and slowing, or shuttering, of vehicle lines. 

The company had been making changes to its lineup, including changing the dashboard of the Peugeot 308, to try and adapt to the crisis. 

“We don’t have great visibility. As such it would be imprudent to assume the issue is going to go away,” Palmer continued, sounding less like the issue is "still very controlled". 

Recall, Intel's CEO, speaking on 60 Minutes earlier this month, said: “We have a couple of years until we catch up to this surging demand across every aspect of the business.” Days prior, we wrote that Morgan Stanley had also suggested the shortage could continue "well into 2022". 

Stellantis was created out of the merger of Fiat Chrysler Automobiles and PSA Peugeot.