By: Mark Glennon*
Friday was a sad day for Belvidere with the announcement of 1,350 layoffs by Stellantis, the multinational maker of Chrysler and Fiat vehicles. The Belvidere plant has been making Jeep Cherokees. The layoffs are for indefinite duration and the plant will close on February 28.
Stellantis mentioned several reasons for its decision. “Our industry has been adversely affected by a multitude of factors like the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market,” its statement said.
Hopes had been that the plant would be at the center of Stellantis’ production shift to electric vehicles, as the Chicago Tribune reported a year ago. “The sprawling plant…could be buzzing again with an all-electric future,” a vice president of global vehicle forecasting at AutoForecast Solutions told the Tribune.
And Illinois economic development officials have been hoping to convince Stellantis to make the transition to EVs at Belvidere and to locate a battery plant in Illinois, as reported by Crain’s.
It’s conceivable that may still happen. Stellantis is reportedly working with the state to find ways to repurpose the plant, which have not yet been described.
But Stellantis seems focused on other production sites. Earlier this year, it announced that it’s spending $2.8 billion to retool plants in Ontario, Canada, and plans to build a $2.5 billion battery plant in Kokomo, Ind., where the company already makes engines and transmissions, according to Crain’s.
The plant closing therefore appears to be yet another blow to Illinois’ attempt to become the national leader in EV and battery production.
Last year, Illinois passed the Reimagining Electric Vehicles in Illinois Act. That law “sets course to make Illinois the best state in the nation to drive and manufacture an electric vehicle,” Gov. JB Pritzker’s announcement said, by offering a generous list of tax credits and incentives.
It hasn’t worked.
Even before Friday’s layoff announcement, “Pritzker’s vision of Illinois as an electric vehicle production hub is in danger of becoming a pipe dream,” as Crain’s put it in August. “Illinois still hasn’t landed a factory that produces the most valuable component of electric vehicles—the batteries that make them go.” Illinois is 0 for 18 in the competition for battery plants.
Crain’s identified another problem discouraging manufacturers of anything – not just EVs – from coming to Illinois: CEJA “is expected to drive up electricity costs, a major expense for manufacturers.” Historically, Illinois had comparatively inexpensive electricity thanks to market-based competition for the best sources. But policy now favoring more expensive renewable sources is turning into another disadvantage in the competition for investment and jobs.
To fix the failing program Illinois did what you would expect — throw more taxpayer money at it. In August, the state passed legislation to sweeten the program by increasing the amount and length of tax credits for EV employment.
Rivian’s huge production facility in Normal, Illinois might seem to be one successful result of Illinois’ EV policy, but it’s not. Rivian took over the old Mitsubishi plant there over five years ago. The presence of that plant in Normal, by the way, itself stems from $276 million of government incentives for Mitsubishi to build it in 1985.
Some supporters of Illinois’ EV policy openly call it an “industrial policy,” as we wrote earlier. They are apparently deaf to the derogatory connotations of that phrase, which to many of us is central planning that usually fails because the government is particularly bad at picking winners and losers or looking into the future.
Maybe they will learn something from their effort to “reimagine” EVs in Illinois, but I doubt it.
*Mark Glennon is founder of Wirepoints.
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Stellantis may have idled the Belvidere plant because sales of the Cherokee have fallen off a cliff. Or perhaps because the electric car market will need many less workers to build EV’s that internal combustion engine vehicles and Illinois has a bad business climate for employers. It could also be because the UAW will be in contract talks with Stellantis in 2023 and the Belvidere plant may be a bargaining chip in the negotiations for Stellantis to get concessions from the UAW that are worth even more than keeping the Belvidere plant open.
I think Lori should demand the first Tokomak fusion reactor be installed at UC to honor the first nuclear reaction! Fusion reactors could provide unlimited clean power in about 500 years. Plan on multiple unintended consequences like incinerating Cook County.
Don’t forget how much our military is reliant on fossil fuels. Hundreds of thousands of small and large vehicles moving supplies everywhere will never be powered by batteries. Military planes will never be as well as ships. Only the very large aircraft carriers will be powered by nuclear but the support ships will remain diesel. They use a tremendous amount of fuel. EV’s are good for short in city trips to reduce some pollution but that’s about it but they are still way too expensive for the average person even with incentives. Hybrids is a better bet or hydrogen fuel… Read more »
Fighter jets get 1 mile per 3 gallons of fuel. Not three miles a gallon, but three gallons a mile.
My wife and I drove to Panama City FL. I can honestly say I did not see a single EV charger anywhere, nor did I see a sign anywhere on any road indicating a charger. The GPS took us off the Interstate for most of the way, two lanes and beautiful scenery. It took 2.5 tanks of gas to get there, about 32 gallons of gas. In an EV it would have taken 3 days or more being totally at the mercy of driving white knuckled all the way with deep worry over a stupid charger being available, somewhere, that… Read more »
How many EVs are stolen in Chicago?
It sure seems to me that auto makers are taking a huge and incredibly expensive risk in shifting production so heavily to EVs. EV popularity could well get heavily tribalized, killing demand among the more conservative half of America. It already is tribalized to some extent, with many seeming EVs as something like wearing a mask. More fundamentally, if America starts drilling oil again its price should easily stabilize around $40 to $60 per barrel, which would bring gas prices close to 2 bucks. That sure wouldn’t help EV demand.
They are betting that one tribe eventually won’t allow the other tribe to buy gas powered vehicles.
Yes, conservatives are the carbon the liberals want to reduce.
yes- the Dems long term goal is to nationalize all of the energy industry, so efficiency of oil vs. EV is irrelevant.
All they need is a majo rcrisis to justify gov’t takeover of the industry, any industry – like a war…..
Spon on Mark. I getting the same feeling I have with pharmaceuticals. The US consumer basically subsidizes the development of new drugs for the planet.
Even if Illinois appears to have some “EV success” it’ll be at our expense.
It is just the continued deindustrialization of the US.
and the continuing socialization- leading to nationalization- of industry, agreed to by both parties.
Your right Mark about everything in your post. But governments in the world’s largest vehicle markets – China, US, and Europe – are starting to legislate the internal combustion engine out of existence. Virtually every auto maker on the planet supports this policy. They can’t make money selling both ICE vehicles and EV’s. Of the 3 markets I think the U.S. will be the toughest to win over. Currently less than half of all households in the U.S. (47% to be exact) have the ability to charge their vehicle at home. That will be a limiting factor on people wanting… Read more »
Navistar another Illinois company recently bought by Traton/Volkswagon Is now basically an EU company, and all in on EV’s. Their new diesel engine the S13 is stated to be the last diesel they will ever make, ever. The school busses division will also move to EV away from diesel, propane and gas busses. Navistar is a 100+ year old company, founded on the McCormack Reaper. We’ll see. Class 8 long haul diesels will have a very long tail, because long haul pretty much cant be done with EV and no charging infrastructure in the country. But school busses, beverage delivery,… Read more »
I attended a few International Harvester company picnics as a yute.
I would suggest the the plant be repurposed to hydrogen fuel cell vehicles. EV’s are good for short trips like groceries/school /doctors visits/etc but not very feasable for long distance considering how long it takes to recharge. The large Ford EV’s are very expensive and can only travel 90 miles or so carrying a larger load and takes up to 45 minutes to charge. https://hondanews.com/en-US/releases/honda-to-begin-us-production-of-fuel-cell-electric-vehicles-in-2024 But what are the chances of Belvidere with the current political climate hellbent on EV’s only to land a plant like Honda here? I say close to zero or less. The electrical grid even it… Read more »
The immigrants will need jobs
They will take the jobs Americans won’t take. That’s why they come.
New Study Explodes Myth of ‘Jobs Americans Won’t Do’Analysis of census data finds native-born citizens make up majority in every single occupation
https://www.lifezette.com/2018/08/new-study-explodes-myth-of-jobs-americans-wont-do/
Immigrants come here because they want a better life. They don’t care if they’re taking away job opportunities from Americans. Most immigrants these days come from second and third world countries. They see pictures of their US living relatives on social media driving newer cars, watching big TV’s, living in housing with running water, getting free medicaid, their kids learn English for free, etc. Drive past any Spanish service church on Sunday morning and look at the makes and models of the newer cars in the parking lot. Their relatives back home have none of this. They want this too,… Read more »
I can’t find the link now, and I did look for it, but the LA Times a few years ago actually sent a reporter into Central America to investigate the root causes of illegal immigration expecting to find a refugee crisis. And what he found instead, shockingly, was that the wealthiest families in town were the families with US working relatives sending remittances back home. The families with US working relatives had the newest, well kept homes, the newer vehicles, the fancier consumer goods. That’s why they send their working age males here to work, so they can live off… Read more »
With all due respect that is the BS used to justify immigration. I used to operate a sod farm and landscaping company in IL. Foreigners didn’t have the meat on their bones to even compare to an American
Welfare benefits are so good in America that the Americans prefer it to working jobs they don’t like.
Unlike most “ism’s” of the left, of which there is a huge demand, but very little true supply… There is very little “demand” for EV’s, & a growing supply surplus (kinda like the vax come to think of it)… The technology is just not there for either the EV itself, or the infrastructure to support them… Just like the ill conceived “vaccine” was pushed out because of “fear”, the elites are playing on the “fear” of catastrophic climate change to push EV’s… The more logical thing to do, is to increase the funding into the technologies to develop the hybrids…… Read more »
Spot on! Brainwashing does not affect all of us!
Try selling a house in Belvidere now. It is easier to get rid of herpes than sell Illinois real estate. It is called another Illinois tax. Almost anywhere in the USA prices have gone up, up and away. In Illinois they have stayed the same or went down.
That’s why I plan to exit IL before the pension multi-millionaires leave.
Prices elsewhere are also coming back down. I wouldn’t want to have bought at the top in TN or UT or TX. Look out below!
Interest rates will impact the nation equally. Whatever trends there were before they jumped will remain. Red states will probably continue to do better at the expense of blue states.
Yeah but the hot red states doubled in the past several while IL went up only 10 or 20%. Fortunately, IL will remain the least expensive of the progressive utopias, so I’ll be able to sell my home to WI/IN/IA Dems fleeing their well run states for a progressive paradise.
Florida is still growing like wildfire. You would think they are offering free food and drink and dancing girls. More Chicago Cops in Punta Gorda, Florida than in Chicago.
Historic tragedy by the Fed. As recently as 12 months ago the Fed was still printing money like crazy, especially for the housing industry by buying mortgage securities, pushing rates down absurdly. Now it reversed and is killing the buyers it brought into the market. Everybody on the Fed board who participated in that should be fired.
I know, right? The Fed was buying $40B a month of mortgage backed securities and another $80B a month of US treasuries. Completely insane. The system is corrupt, they’ll never be fired. When their terms are over, they’ll go on the speech giving circuit and accept hundreds of thousands per speech from the investment banks and private equity as a ‘thank you’ gift for making them all fabulously wealthy the during the previous decade. Just look at how much money Janet Yellen made in the world of high finance when she retired after years of printing Yellen Bux. And the… Read more »
The answer is: IL Leadership Doesn’t Care. They’ll give lip service to caring, but at the end of the day, they don’t care. Boone County is a Red areas that voted for Bailey and Trump. IL Dems feel like they owe the people of that county anything, they feel like they own them nothing at all. And that’s the end of the story, as JB moves on to the next cultural war issue: guns. As he plans to turn Suzie the Suburban Mom in Schaumburg into a felon because her standard Glock 19 handgun clip holds 15 bullets instead of… Read more »
I think I read a couple week ago they were pulling out of the EU as energy cost were too high to produce a car and profit . moving fiat production to India, BRICS burn oil and coal.
This Reuters article, has UAW claiming plants moving to Mexico. Reuters: Stellantis to indefinitely idle Illinois plant, cites EV costs.
https://www.reuters.com/business/autos-transportation/stellantis-indefinitely-idle-illinois-assembly-plant-2022-12-09/
Why would a CEO spend billions in a state that just approved a bill that basically puts a straight jacket on all business management and will increase their costs? CEO’s aren’t idiots.
CEO’s are judged based on share prices, which is a function of profits. That’s a market dynamic that Democrats don’t seem to want to deal with-easier to just raise taxes and try and demonize those who are concerned with costs.
So Stellantis is going to close the Belvedere and expand an existing plant in Kokomo, IN and spend another $2.5 billion to build a battery plant. What does that say about the toxicity to run businesses in Illinois?
Just keep pulling the blue handle and this is what you get. Can’t wait until I can leave this state.
I bet JB will start taxing retirement income next.
The TRS should invest in this company with PPF retirement funds to help all citizens of Illinois. Let’s see how that ends up.
Good thing Illinois is offering a $4000 rebate on top of Federal $7500 tax credit for a new electric car in 2023. Am sure the laid off employees here really appreciate it. It’s funny, Trump was accused by the Left as a bull in a China shop. He certainly has his own issues, but the “Progressive” push for green and equity without regards to the costs let alone actually urgency is the real Bull.
The state needs to step in NOW and hand the plant over to CTU—END THE SYSTEMIC RACIST CORPORATE GREED!! ANYONE WHO PRODUCES ANYTHING IS EVIL!! The people have spoken….
I like the absurdity, but in Illinois this thinking is never too far from the truth.
Absolutely, love the sarcasm and absurdity. Illinois is not necessarily the sharpest knife in the drawer when it comes to realistic expectations. Seems that from Governor Flintstone on down there are too many ideologues with zero financial or business sense. Along with the Panther Party who now rules Cook County and Chicago they will waste all of this taxpayer money on ludicrous projects such as these. I cannot honestly say it feels good to have one foot out in Texas and unfortunately I need to leave the other foot in for a few more years. Central planning worked so well… Read more »
Illinois needs to take in cash to pay pensions they don’t care how many businesses close or how many people lose their jobs in the process. How does that make sense? The politicians in this state are so ignorant and full of themselves they don’t understand that when a business closes and people lose jobs it’s a lot harder to pay those public sector pensions. Rivian is a perfect example of ignorant political involvement and manipulation. Lots of “Solyndras” are popping up all over Illinois. We will pay the price for decisions made by politicians allowing themselves to be held… Read more »
Agreed, but it’s not ignorance for most of them. Here are their priorities, in order: 1) Public union campaign donations and support for themselves to get reelected (it is union policies that are driving away many manufacturing businesses) 2) Leftist ideology and the culture wars implemented 3) Opportunities for legalized graft or “payoff-employment” after leaving office 4) Higher taxes and more ways to extract “revenue” from anyone and everyone that isn’t a pain point for them (like small businesses) to support their ideology and culture war experiments (big manufacturing businesses very much care about this one too) Note that business… Read more »
Thus another reason to support and continue to fund under-performing schools: Progressives need an ignorant and dependent electorate (and those teachers’ union votes).
Keep ’em dumb, buy their votes, and they’ll never leave the plantation.
Stupid chickens.
Does a Workers Rights Amendment encourage industry to retool, expand, or relocate in Illinois?
Not everybody will get your drift.
“Businesses don’t care about tax rates, they care about certainty and stability!” – Public sector advocates
While the WRA might increase certainty for some workers, it increases uncertainty for all corporations. Uncertainty leads to instability.
Right. It’s a huge ax shaped like a question mark now hanging over the heads of everybody thinking of hiring in Illinois.
The best part will be when labor attempts to assure the industrial sector that the WRA doesn’t change anything for them, basically countering their entire campaign message.
Aren’t you guilty of doing the same? All this time claiming that it is only a benefit for public sector workers while now claiming increased “uncertainty for all corporations”.
And we haven’t even seen the effects of it yet. The unions have yet to imagine all of the laws they can usurp in collective bargaining with their newfound constitutionally granted powers.
NO!!!
What a shame for the workers, suppliers, and community. Such a nice community there of decent folks. I believe back in the Chrysler days that plant was nearly shut down also. These kind of well paying private hourly jobs just don’t happen that much. People in Illinois who largely suck off the taxpayer teat wouldn’t know that and very likely don’t care. It’ll be a very long shot for anything to replace it.
Can’t imagine why Jeep is dumping Illinois — could it be: — the most business hostile laws/regulations in America — the most burdensome tax structures/tax rates in the US — a failing educational system at all levels — the worst fiscal basket case among all 50 states — out of control crime/soft on crime Democrats that have made law and order impossible — crooked and corrupt unions that have a stranglehold on government — the worst corruption of any state/one party misrule — a Democrat state energy suicide pact that will give Illinois 3rd world power blackouts and last but… Read more »
Hopefully this should be a temporary shutdown. It has happened many times before. The company has invested a lot of money the last few years. The question should be is WHY are we making the chips in other countries? Biden was VP for 8 years and nothing was done by him to help keep vital production in this country. The price of drugs was never mentioned during the Obama Administration only the ACA which was not so affordable. Until Trump mentioned it I did not know that Medicare could not negotiate drug prices. Whatever Big Pharma charged they paid for… Read more »
Everything in Illinois fails because of government greed. So many other states offer so much more. They are much more business friendly than Illinois. Greed is destroying Illinois. Illinois is an experiment of “What Not to do!!”.