Fiat Chrysler Automobiles (FCA) has confirmed that it will be idling production of its midsize Jeep® Cherokee (KL) for a week during February at its Belvidere Assembly Plant in Belvidere, Illinois. It marks a continuation of issues and concerns surrounding the company’s only underutilized assembly plant in the United States.
Back in March of 2019, we told you that FCA had planned on laying off 1,371 of its workforce by May of 2019 at the Belvidere Assembly Plant due to slow global sales of the Cherokee lineup. This came on the heels of the news that the company was adding an additional 6,500 jobs to its manufacturing facilities in the Detroit area for the growth of three all-new Jeep vehicles and the next-generation Jeep Grand Cherokee.
Since then, the company has idled Belvidere for one week in August of last year and for two weeks this month. With Cherokee sales down 20% in 2019, there continues to be a lot of questions about what will happen to the plant and the Cherokee.
The recent UAW-FCA negotiations brought forth some light, stating that FCA had no intention of shutting the plant down and were providing a small investment of $55 million USD into the plant for what the contact is saying are “fresh models/features off of current (KL) platform”. The contract also states that the production of the Cherokee will continue and the vehicle will receive next-generation safety features added in 2020.
The Jeep brand has teased the public with the introduction of the 2020 Jeep Cherokee Deserthawk at the company’s Captial Market Day presentation in 2018. Since then, there hasn’t been any information released on that vehicle nor any spy photos of such as vehicle out testing on the various FCA facilities globally.
Rumors have been circling that a possible Chrysler crossover based on a stretched version of the Cherokee (similar to the Chinese-exclusive Jeep Grand Commander) would be joining the Cherokee at Belvidere, however, the company has yet to make any announcement official. The Chrysler crossover makes the most sense logical, as the industry continues to move away from the passenger car market and more towards SUVs, crossovers, and trucks. Such a vehicle would also continue to grow the small Chrysler portfolio which consists of the Chrysler 300 sedan, Chrysler Pacifica and its hybrid variant, and the Chrysler Voyager which is basically a value-based Pacifica offering for the United States.
However, new reports from earlier this week indicated that FCA is offering about 3,900 hourly employees at the Belvidere plant had been offered separation packages that include a $60,000 retirement incentive. According to the Rockford Register Star, another option is voluntary termination, which includes a lump sum payment depending on seniority. The newspaper states that FCA says the decision helps to “create opportunities for those employees still on layoff.” Employees have until March 11 to decide whether to accept the separation packages.
So there continues to be a lot of questions surrounding the Belvidere plant and production of the Jeep Cherokee in the North American market. With FCA’s limited production ability in North America, the company can not afford to close the Belvidere plant down. But if the Cherokee continues to fall short of producing sales numbers of other vehicles in the lineup, we are sure it would be ultimately replaced with something that can.