An auto plant in northern Illinois is expected to close early next year with hundreds of workers being laid off due to the challenge of rising costs related to the electric vehicle market and other factors.

Stellantis says Friday that its Belvidere Assembly Plant will be idled effective Feb. 28 as the automaker “considers other avenues to optimize operations.”

“This difficult but necessary action will result in indefinite layoffs, which are expected to exceed six months,” Stellantis said in a statement, adding that notices have been sent to hourly and salaried workers.

About 1,350 people are employed at the plant, which produces the Jeep Cherokee.

“The company will make every effort to place indefinitely laid off employees in open full-time positions as they become available,” it said.

Belvidere is about 112 kilometres northwest of Chicago.

In 2016, then-Fiat Chrysler announced it would invest $350 million in the plant to produce the Jeep Cherokee. Production on the Cherokee began there in 2017.

A Stellantis spokeswoman told The Associated Press on Friday that the automaker is not commenting on the future of the “Cherokee nameplate.”

“This is an important vehicle in the lineup, and we remain committed long term to this mid-size SUV segment,” Jodi Tinson said in an email.

Stellantis, which also pointed to the coronavirus pandemic and global microchip shortage as challenges to the auto industry, said it is working to identify opportunities to repurpose the Belvidere facility.

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