On the heels of Fiat Chrysler Automobiles’ announcement that it plans to open a new assembly plant in Detroit and adds jobs at another in Warren, Michigan, FCA also confirmed it plans to cut 1,400 jobs at its assembly plant in Belvidere, Illinois, in early May.
“In order to better align production with global demand at its Belvidere Assembly Plant, FCA notified the state of Illinois, the city of Belvidere and the UAW today that it intends to return the plant to a traditional two shift operation, beginning May 6, 2019,” FCA said in a statement.
“This action will affect 1,371 people. The company will make every effort to place indefinitely laid off hourly employees in open full-time positions as they become available based on seniority,” the statement said.
Jodi Tinson, FCA spokeswoman, said the automaker expects to place all of the employee impacted by the cutback to be placed in other jobs inside the company.
(Fiat Chrysler to open new Jeep plant; add 6,500 jobs. Click Here for the story.)
“China now has their own plant that manufactures the Cherokee for China, so guess where the drop off is?” said Belvidere Mayor Mike Chamberlain. “China is the most populous, affluent country that we would’ve been shipping to, so that’s a significant drop,” he noted.
Since November, GM, Ford and Nissan have all announced cut backs at plant building vehicles in the U.S. in the face of slowing demand both at home and abroad.
The dual announcements aren’t exactly incompatible. The Belvidere appears aimed at the short-term economic outlook, which remains uncertain on the heels of a broad economic slowdown in places such as Europe and China as well as turmoil in South America.
(Click Here for more about FCA hourly employees getting $6K profit-sharing checks.)
The $4.5 billion investment announced in Detroit, on the other hand, is directed at FCA’s long-term plans, which could take up to another four years to complete.
FCA said it plans to invest in five of its existing Michigan plants, and to work with the city of Detroit and state of Michigan on building a new assembly plant within city limits. The move would increase capacity to meet growing demand for its Jeep and Ram brands, including production of two new Jeep-branded products, as well as electrified models. The proposed projects would create nearly 6,500 new jobs.
As part of the plan, FCA expects to invest $1.6 billion to convert the two plants that comprise the Mack Avenue Engine Complex in Detroit into an assembly site for the next-generation Jeep Grand Cherokee, as well as an all-new three-row full-size Jeep SUV and plug-in hybrid (PHEV) models, adding 3,850 new jobs to support production.
(To see more about FCA settling its emissions cheating scandal for $800m, Click Here.)
The company intends to start construction of the new Detroit facility by the end of Q2 2019 with the first three-row vehicles expected to roll off the line by the end of 2020, followed by the all-new Grand Cherokee in the first half of 2021.