Stellantis, the corporate behind Fiat, Dodge, and Jeep, has introduced that it plans to halt one in all its vegetation and lay off 1,200 employees come February. Its reasoning? Strain from COVID-19, positive, together with a splash of chip shortages — however primarily all these electrical automobiles it has to make.
The manufacturing facility in query is one which builds Jeep Cherokees in Illinois, and the information comes because the automaker is gearing up for union negotiations. Whereas United Auto Employees argues that “the transition to electrification additionally creates alternatives” on the plant, an unnamed Stellantis spokesperson informed CNBC and The Wall Street Journal that it was as an alternative the rationale for the halt. “Probably the most impactful problem is the rising value associated to the electrification of the automotive market,” the corporate claims, including that it’s exploring different makes use of for the plant, and that it’s looking for jobs for the employees it’s shedding.
Stellantis is spending billions on EVs
However let’s again up for a second — one of many world’s largest automakers is saying it has to shutter a plant indefinitely due to how a lot electrification is costing? That’s a daring declare, particularly because it’s coming from an organization I’d think about to be in distant third within the large three American automakers’ race to maneuver their lineups from fuel to batteries. It additionally doesn’t assist that Stellantis has been promising fairly just a few electrified Jeeps, and it’s arduous to see why this manufacturing facility couldn’t play a job in making these automobiles, at the least one in all which is due out next year (and plenty of of which have been very tough to seek out).
This isn’t to say that Stellantis isn’t spending large on EVs — it’s promised to separate an as much as $3 billion invoice with Samsung for a battery manufacturing facility in Indiana, and it’s investing $4.1 billion in an identical facility positioned in Canada, this time with LG. However that’s not an unthinkably giant funding in comparison with a few of its friends: GM is spending a whopping $7 billion on one in all its three EV battery factories within the works, Honda’s helping build a $4.4 billion plant in Ohio (and spending $700 million extra to retool present services), and Ford has announced it’s constructing three EV-related areas with a price ticket of over $11.4 billion.
Ford’s an attention-grabbing comparability, although, as a result of it additionally went by way of a latest spherical of layoffs, reducing round 3,000 jobs. No prizes for guessing one of many excuses it gave staff; “We’ve a chance to steer this thrilling new period of linked and electrical automobiles,” learn a memo from CEO Jim Farley and chairman Bill Ford. “Constructing this future requires altering and reshaping nearly all elements of the best way we’ve got operated for greater than a century.” That, in fact, meant reducing jobs.
It’s too early to say whether or not EVs are going to change into a typical scapegoat if the auto trade retains finishing up layoffs, however now we’ve got at the least two corporations attempting to color 1000’s of peoples’ livelihoods as the price of the longer term. (EV-native corporations like Tesla or Rivian, which have additionally had their own massive rounds of layoffs this 12 months, don’t have that luxurious.)