A Jeep Cherokee factory in Northern Illinois is cutting more than 1,600 jobs as multiple auto manufacturers are experiencing shortages in microchips.
France’s PSA Group and Fiat Chrysler merged earlier this year and announced a new company, Stellantis NV—now the world’s fourth-largest automaker by volume. The company also owns Jeep, as well as more than a dozen other passenger-car brands.
The company’s move will result in 1,641 workers getting permanently laid off, said Jodi Tinson, a Jeep Cherokee spokesperson.
The layoffs are intended to “balance sales with production” as the situation at the company has been “further exacerbated by the unprecedented global microchip shortage,” the spokesperson explained.
Jeep Cherokee has become the latest car brand highlighting the intensifying semiconductor shortage that is affecting the global auto industry.
Ford said in early May the microchip shortage might slash second-quarter production by half, costing it about $2.5 billion and about 1.1 million units of lost production in 2021.
Other auto brands that have been hit hard by the semiconductor shortages are Volkswagen, Nissan, and Honda. The shortfall deepened after a plant owned by Japan’s Renesas caught fire in April.
Raimondo told a Council of the Americas event on May 4 that longer-term, increased investment was needed to produce more semiconductors in the United States and that other critical supply chains needed re-shoring, including to allied countries.
“We’re working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to, you know, prioritize the needs of our auto companies since there’s so many American jobs on the line,” Raimondo said.
