US Auto Maker Jeep to Cut Over 1,600 Jobs Amid Prolonged Semiconductor Shortage

Illinois Factory Cuts Workforce by Half, Eliminates 2-Shift System
Semiconductor Shortage Prolonged, Industry Losses Expected to Exceed $110 Billion

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Jeep, a famous American SUV manufacturer, announced plans to lay off about 1,600 employees at its Illinois plant due to the prolonged shortage of automotive semiconductors. As the global automotive industry's semiconductor supply issues show little improvement, the industry's losses this year are estimated to exceed $110 billion (approximately 125 trillion KRW).

According to foreign media including the AP on the 17th (local time), Jeep plans to lay off about 1,600 employees at its Illinois plant assembling its flagship Grand Cherokee vehicles by the end of July. Jeep's parent company, Stellantis, stated that it will reduce the number of production workers by about half at the Jeep plant in Belvidere, Illinois, located northwest of Chicago.

Jody Kinson, a Stellantis spokesperson, explained, "The plant, which has been operating on a two-shift system, will be converted to a single-shift system," adding that 1,641 employees could be laid off. Kinson added, "The unprecedented global microchip shortage is worsening the plant's situation, but we are trying to balance sales and production." According to AutoForecast Solutions, an automotive industry information provider, Jeep's Belvidere plant's vehicle production is more than 67,000 units below the planned amount due to the semiconductor shortage.

As the semiconductor supply issue shows little sign of improvement, concerns are rising that layoffs may spread to other automotive companies as well. AlixPartners, a Detroit-based management consulting firm, estimated that the automotive industry's losses this year due to the semiconductor shortage will reach $110 billion.

Meanwhile, Stellantis, formed in January last year through the merger of Fiat Chrysler Automobiles (FCA) and the French PSA group, which owns the Peugeot brand, is one of the world's largest vehicle manufacturers with a global workforce of 400,000 employees.

This content was produced with the assistance of AI translation services.