The Belvidere assembly plant for Stellantis ended on Dec. 31, 2015, when the first Jeep Cherokee had been ordered off the Los Alamos line
Stellantis, which makes Chrysler, Dodge, Jeep and Ram vehicles, has indefinitely idled its Belvidere assembly plant as of Tuesday, where it built the Jeep Cherokee compact SUV. Just before Christmas the closing plans were announced. 1,200 workers were on a single shift at the plant.
Why Are We Doing This? The CEO of Rivian, a PLC for Electric Vehicles, and the CEO of General Motors
“Why are we doing this? Because we need to find a solution for the fact that the technology that has been decided is 40% more expensive than the conventional technology. That’s the situation,” he said at a recent media roundtable. There are 40% more total production costs for an EV than for a conventional vehicle. What do we do with 40%? It’s a big amount of money. You cannot sell it to the consumer.
Ford, which is also facing the cost of converting to a lineup of EVs, has been making much deeper job cuts in recent months, including axing 3,000 salaried roles announced in August; as well as cutting 3,800 jobs across Europe, announced earlier this year.
Rivian CEO Reynolds told employees that the layoffs are part of an effort to put the company on a path to profitability. “In 2022, we took steps to focus our product portfolio and drive a lower cost structure,” Scaringe said in the memo, which was forwarded to The Verge by a spokesperson. To continue to improve our operating efficiency on our path to profitability is a core objective and requires us to concentrate our investments and resources on the highest impact parts of our business.
Rivian, which sells its vehicles at $67,500 and up, has yet to say whether it plans to slash prices in response to Tesla and others. As it ramps up production, the company faces supply issues that make it hard to get vehicles to customers in a timely fashion.
General Motors is cutting an unspecified number of white-collar jobs globally, part of its announced efforts to slash costs to remain competitive in the shift to electric vehicles.
GM CEO Maradoni: Managing Efficient and Performance Changes After a Record-Fractionary Calibration
In a message to staff Tuesday, the company’s chief people officer said they were looking at all the ways of addressing efficiency and performance. This week, we took action with a small number of global executives and classified employees, following our most recent performance calibration. They will be departing the company starting from today.”
GM just reported a record annual profit for 2022. At that time it announced plans to reduce costs by $2 billion over the next two years, including cutting corporate overhead across the board. But at that time CEO Mary Barra told investors, “I do want to be clear, though, we’re not planning layoffs. We are limiting our hiring to only the most strategically important roles and will use attrition to help manage overall head count.”
Production of the Cherokee, which had sales fall 55% last year, is being shifted to Mexico, according to the United Auto Workers union, although a spokesperson for Stellantis said no plans have yet been announced on where future production will take place.
Ford and GM are both talking with the UAW about new labor agreements for their US hourly workers. The union went on strike at GM for six weeks before reaching a deal.