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 starting in February. His reasoning? COVID-19 pressure, sure, along with a dash of chip shortages, but mostly all those electric vehicles you have to make.
The factory in question is one that makes Jeep Cherokees in Illinois, and the news comes as the automaker prepares for union negotiations. While the United Auto Workers argues that “the transition to electrification also creates opportunities” at the plant, an anonymous Stellantis spokesperson told CNBC and The Wall Street Journal which was instead the reason for the stop. “The most striking challenge is the rising cost associated with electrifying the auto market,” the company says, adding that it is exploring other uses for the plant and trying to find jobs for the workers it is laying off.
Stellantis is spending billions on electric vehicles
But let’s back up for a second: One of the world’s largest automakers says it has to close a plant indefinitely because of how much is electrification costing? That’s a bold claim, especially since it comes from a company I’d consider a distant third in the Big Three American automakers’ race to switch their lineups from gasoline to batteries. It also doesn’t help that Stellantis has been promising quite a few electrified Jeeps, and it’s hard to see why this factory couldn’t play a role in making those vehicles, at least one of which is due out next year (and many of them). which have been very difficult to find).
This isn’t to say that Stellantis isn’t spending big on EVs: It has promised to split a bill of up to $3 billion with Samsung for a battery factory in Indiana, and is investing $4.1 billion in a similar facility located in Canada, this time with LG. But that’s 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, Honda is helping build a $4.4 billion plant in Ohio (and spending $700 million more to revamp existing facilities), and Ford has announced it’s building three EV-related locations priced of more than $11.4 billion.
However, Ford is an interesting comparison because it also went through a recent round of layoffs, cutting around 3,000 jobs. There are no prizes for guessing one of the excuses he gave the employees; “We have the opportunity to lead this exciting new era of electric and connected vehicles,” read a memo from CEO Jim Farley and Chairman Bill Ford. “Building this future requires changing and reshaping virtually every aspect of the way we have operated for more than a century.” That, of course, meant cutting jobs.
It’s too early to say whether EVs will become a common scapegoat if the auto industry keeps laying off, but we now have at least two companies trying to paint the livelihood of thousands of people as the cost of the future. (Native EV companies like Tesla or Rivian, which have also had their own massive rounds of layoffs this year, don’t have that luxury.)