Stellantis, the corporate behind Fiat, Dodge, and Jeep, has introduced that it plans to halt certainly one of its crops and lay off 1,200 employees come February. Its reasoning? Strain from COVID-19, certain, together with a splash of chip shortages — however primarily all these electrical automobiles it has to make.
The manufacturing unit 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 Staff argues that “the transition to electrification additionally creates alternatives” on the plant, an unnamed Stellantis spokesperson instructed CNBC and The Wall Street Journal that it was as a substitute the rationale for the halt. “Essentially 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 contemplate 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 exhausting to see why this manufacturing unit couldn’t play a task in making these automobiles, a minimum of certainly one of which is due out next year (and plenty of of which have been very tough to search 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 unit in Indiana, and it’s investing $4.1 billion in an analogous facility situated 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 certainly one of 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 current services), and Ford has announced it’s constructing three EV-related places with a price ticket of over $11.4 billion.
Ford’s an fascinating comparability, although, as a result of it additionally went by means of a current spherical of layoffs, chopping round 3,000 jobs. No prizes for guessing one of many excuses it gave staff; “We’ve a possibility 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 just about all features of the best way we’ve operated for greater than a century.” That, after all, meant chopping jobs.
It’s too early to say whether or not EVs are going to turn into a standard scapegoat if the auto business retains finishing up layoffs, however now we’ve a minimum of two firms attempting to color hundreds of peoples’ livelihoods as the price of the longer term. (EV-native firms like Tesla or Rivian, which have additionally had their own massive rounds of layoffs this 12 months, don’t have that luxurious.)