Belvidere, Ill. — The COVID-19 pandemic and an unprecedented global semiconductor shortage are wreaking havoc on the auto industry, idling plants, laying off thousands of workers and fueling uncertainty. Nowhere is that more evident than at the Jeep Cherokee plant here.
The predicament of Stellantis NV’s Belvidere Assembly Plant is unique at the moment — hit by chips, sinking demand for its SUV in an SUV-crazy market, no new product commitments and now seeing its second shift cut. The decision to lay off indefinitely 1,641 people by July 26 seeks to balance production and demand, the automaker says.
But it also is an early indication of long-lasting implications of the pandemic-induced supply constraints that have exacerbated Belvidere’s situation. They’ve also highlighted vulnerable plants whose products aren’t the high-margin, high-demand priorities fattening bottom lines.
Because of the shortage of microchips used in consumer electronics — including vehicles’ automated driving functions, infotainment, heated seats and more — General Motors Co.’s Fairfax Assembly Plant in Kansas City will be down for 21 consecutive weeks at the least. Ford Motor Co.’s Louisville Assembly has idled for more than nine weeks so far. A couple plants in Ontario have had significant downtime, too.