Stellantis idles Illinois plant, takes step toward closure

DETROIT — Stellantis is moving closer to closing its factory in Belvidere, Illinois, as it prepares for the costly transition from internal combustion to electric vehicles.

The factory, which now employs about 1,350 workers near Rockford, officially was placed on “idle” by the company on Tuesday. That term means it intends to shut down the plant.

Belvidere’s future is likely to be a lightningrod issue in national contract talks coming up this summer with the United Auto Workers union, one that could bring a painful strike.

In a statement Tuesday, the UAW said that the decision to idle the plant will not go uncontested.

“This economic dislocation is a choice made by Stellantis to reap even higher profit,” union Vice President Rich Boyer said in a statement. “We will highlight their corporate greed to workers, community, taxpayers and consumers.”

In a meeting with reporters Tuesday, Carlos Tavares, CEO of the company formed by combining Fiat Chrysler and France’s PSA Peugeot, said Stellantis is “looking for solutions” for Belvidere, which now has no new vehicle to build. The last Jeep Cherokee small SUV rolled off the plant’s assembly line on Tuesday.

The company, Tavares said, is executing a transformation to electric vehicles, which are 40% more expensive to make than those with internal combustion engines. Stellantis, he said, can’t pass the increased costs to consumers because many wouldn’t be able to afford new cars. It also can’t sell EVs at a loss, so it’s left with absorbing the added costs.

“We need to adapt to this new world,” Tavares said. “The reality of the transformation of the market is the reality that we need to face.”

UAW President Ray Curry said the company’s “ill-advised decision” will disrupt lives, uproot families and cause repercussions through the regional parts supply chain network.

The union said it has negotiated, and Tavares said the company has agreed to, retirement packages as well as voluntary termination and pre-retirement leaves for workers. It’s also working on relocation for interested workers, the UAW statement said. The union says about 2,300 employees are affected.