One of Stellantisâ EV concept vehicles. | Image: Stellantis
Stellantis, the company behind Fiat, Dodge, and Jeep, has announced that it plans to halt one of its plants and lay off 1,200 workers come February. Its reasoning? Pressure from COVID-19, sure, along with a dash of chip shortages â but mainly all those electric vehicles it has to make.
The factory in question is one that builds Jeep Cherokees in Illinois, and the news comes as the automaker is gearing up for union negotiations. While United Auto Workers argues that âthe transition to electrification also creates opportunitiesâ at the plant, an unnamed Stellantis spokesperson told CNBC and The Wall Street Journal that it was instead the reason for the halt. âThe most impactful challenge is the increasing cost related to the electrification of the automotive market,â the company claims, adding that itâs exploring other uses for the plant, and that itâs trying to find jobs for the workers itâs laying off.
But letâs back up for a second â one of the worldâs largest automakers is saying it has to shutter a plant indefinitely because of how much electrification is costing? Thatâs a bold claim, especially since itâs coming from a company Iâd consider to be in distant third in the big three American automakersâ race to move their lineups from gas to batteries. It also doesnât help that Stellantis has been promising quite a few electrified Jeeps, and itâs hard to see why this factory couldnât play a role in making those vehicles, at least one of which is due out next year (and many of which have been very difficult to find).
This isnât to say that Stellantis isnât spending big on EVs â itâs promised to split an up to $3 billion bill with Samsung for a battery factory in Indiana, and itâs investing $4.1 billion in a similar facility located in Canada, this time with LG. But thatâs not an unthinkably large investment compared to some of its peers: GM is spending a whopping $7 billion on one of its three EV battery factories in the works, Hondaâs helping build a $4.4 billion plant in Ohio (and spending $700 million more to retool existing facilities), and Ford has announced itâs building three EV-related locations with a price tag of over $11.4 billion.
Fordâs an interesting comparison, though, because it also went through a recent round of layoffs, cutting around 3,000 jobs. No prizes for guessing one of the excuses it gave employees; âWe have an opportunity to lead this exciting new era of connected and electric vehicles,â read a memo from CEO Jim Farley and chairman Bill Ford. âBuilding this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century.â That, of course, meant cutting jobs.
Itâs too early to say whether EVs are going to become a common scapegoat if the auto industry keeps carrying out layoffs, but now we have at least two companies trying to paint thousands of peoplesâ livelihoods as the cost of the future. (EV-native companies like Tesla or Rivian, which have also had their own massive rounds of layoffs this year, donât have that luxury.)