Stellantis said it plans to cut about 400 workers at its Belvidere Assembly Plant, which builds the Jeep Cherokee in northern Illinois.
The layoffs will take effect as early as Jan. 14, the company said. Stellantis sent Worker Adjustment and Retraining Notification (WARN) notices on Nov. 10 to affected hourly employees, the state of Illinois, the city of Belvidere and the UAW.
"As we continue to balance global sales with production of the Jeep Cherokee produced at the Belvidere Assembly Plant, which has been further exacerbated by the unprecedented global microchip shortage, Stellantis has determined that additional staffing actions are needed as a result of changes in the plant's operations," the automaker said in a statement.
The automaker said it "will make every effort to place laid off hourly employees in open full-time positions as they become available based on seniority."
The plant has had significant downtime this year and already had cut its second shift. The Belvidere plant, even before the chip shortage, grappled with downtime as the automaker sought to match Cherokee production with demand.
The Cherokee's U.S. sales this year have plunged 20 percent to 78,750 vehicles through September. Third-quarter sales fell 72 percent to 11,592 vehicles.
But there could be a lifeline on the way as Stellantis electrifies its lineup in the years ahead.
AutoForecast Solutions is expecting production of the Dodge Challenger and Charger muscle cars to move to Belvidere in 2024. Those redesigned models would be on Stellantis' electrified STLA Large platform.
AutoForecast Solutions also predicts that a new electrified Chrysler crossover will be produced alongside the next-generation muscle cars in Belvidere on the same platform.