On the day set for Stellantis to idle its Belvidere Assembly Plant in Illinois, the automaker announced a $155 million investment related to electric vehicle production at three plants in Indiana.
The Indiana announcement would retain more than 265 jobs and produce electric drive modules, which Stellantis, in a news release, called an all-in-one solution for EV powertrains that through optimized efficiency would help vehicle platforms achieve a driving range of up to 500 miles, presumably per charge.
The work would be divided among the three plants.
“The gearbox cover will be cast at Kokomo Casting and machined at Kokomo Transmission. Gear machining and final assembly will be at the Indiana Transmission Plant. Production is expected to start in the third quarter of 2024, following retooling,” the release said.
The situation offers diverging storylines for the automaker between the situation in Illinois, where the fate of the more than 1,200 workers at the plant that produces the Jeep Cherokee SUV has been in question, and new investments in Indiana, where the automaker said in May of last year that it was partnering with South Korea’s Samsung SDI on a new EV battery plant.
That battery plant, also in Kokomo, is set for a $2.5 billion investment that is projected to create 1,400 jobs with production of lithium-ion batteries slated there in early 2025.
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The company said the news aligns with its goal of reaching 50% U.S. battery electric vehicle sales by 2030.
“While we continue our successful transition to a decarbonized future in our European operations, we are now setting those same foundational elements for the North American market,” CEO Carlos Tavares said in a news release.
The decision to idle the Belvidere plant, which has been tied to the cost of the transition to vehicle electrification, has been a sore spot for the UAW, which issued a news release Tuesday morning criticizing the company.
“Stellantis’ ill-advised decision will have negative repercussions throughout the region and supplier network. It will disrupt lives, uproot families, and leave communities struggling to find economic drivers to pay for schools, roads and other services,” UAW President Ray Curry said in the release.
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UAW Region 4 Director Brandon Campbell said in the release that “it is notable that while Stellantis abandons this community after being part of it for almost 60 years, the corporation has benefitted from numerous and generous subsidies, federal loans, grants and tax abatements — all paid for by U.S. taxpayers.” Campbell also highlighted the $24.8 million total compensation package reported for Tavares last year.
It was not immediately clear what incentives might have been offered in relation to the Indiana announcement.
The Free Press reported last year that in connection with the battery plant announcement that “incentives from the Indiana Economic Development Corp. could reach as much as $186.5 million, not counting ‘repayable financing support’ to aid construction and infrastructure or additional incentives provided by local and county governments as well as other entities.”
Mark Stewart, Stellantis North America chief operating officer said, that the city of Kokomo and state of Indiana have been “great partners” for many years.
“With more than 7,000 employees in Indiana, these investments will leverage the core manufacturing competencies of the local workforce in the areas of casting, machining and assembly, all of which will be needed even as the market transitions to an electrified future,” Stewart said.
However, the union, in its release, said it would continue to demand that Stellantis put a product in the Belvidere plant.
When asked this week about the future home of the Cherokee, spokeswoman Jodi Tinson said the company has made no announcements about the production location of the next generation Cherokee. Shawn Fain, who is challenging Ray Curry for the presidency of the union, has raised the prospect multiple times that the Cherokee would be headed to Mexico.
Tinson, in a comment from the company, acknowledged the strain on the Belvidere community:
“We know the idling of the Belvidere Assembly Plant brings lots of uncertainty for our remaining employees and the entire community. Decisions like these are always difficult and never made lightly as we realize the impact they will have. In an effort to reduce the anxiety associated with these necessary decisions, we have agreed to offer packages to our employees as a way of making this transition easier.”
Those items, which the UAW said came as a result of bargaining, include a retirement incentive program (UAW Local 1268, in a Facebook post put the figure at $50,000), pre-retirement leave for those within two years of retirement and a voluntary termination of employment program.
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The election window for the programs would be March 13 to April, 26, Stellantis said, noting that it would be canvassing employees interested in staying with company about possible relocation to the Detroit, Toledo or Kokomo areas, where the company has other facilities.
While the total number of workers listed at the plant was 1,219 as of December, according to the company, UAW Vice President Rich Boyer said in the release that the union was addressing the concerns of the 2,300 affected employees through negotiations.
He also noted the wider impact related to the idling.
“While the power of collective bargaining softens the blow for UAW Local 1268 members who work for Stellantis, we know that the options are much more limited for the supplier network, which includes UAW members as well as the community at large,” said Boyer, who is the director of the union’s Stellantis department.
Contact Eric D. Lawrence: elawrence@freepress.com. Become a subscriber.