Fiat Idling Illinois Jeep Plant for the Third Time in Six Months

(Bloomberg) -- Fiat Chrysler Automobiles NV will pause production at a Jeep sport utility vehicle factory for the third time in six months, adding to signs carmakers are expecting sales to slow this year.

The Jeep Cherokee assembly plant in Belvidere, Illinois, will shut down the week of Feb. 17, according to Jodi Tinson, a Fiat Chrysler spokeswoman. The company idled the facility for two weeks this month and one week in August after cutting a production shift at the plant in May.

Five of the six largest North American automakers are expected to dial back production in the first quarter, researcher LMC automotive said earlier this month. Most analysts are projecting industry sales to dip below 17 million units for the first time in six years as consumers struggle to afford new vehicles. The average price paid for a new car or truck is approaching $35,000.

The fate of the Belvidere plant was the subject of speculation during Fiat Chrysler’s labor negotiations last year with the United Auto Workers union. The company ended up agreeing to make a small investment in the factory during the course of the next four years.

Fiat Chrysler also negotiated early-retirement packages with the UAW that it’s now offering to Belvidere workers, Tinson said. The inducements aimed at luring higher-paid and more-senior employees to leave include $60,000 lump sum payments and a voluntary termination package. Both would make room for the company to rehire employees who were laid off when it cut a shift last year.

The layoffs at Belvidere left more than 1,300 workers without jobs, and about 900 of those are still on layoff awaiting potential reassignment. The plant employs almost 3,900 workers, about 3,600 of which are hourly.

U.S. sales of the Jeep Cherokee built in Belvidere fell 20% last year to 191,397, while overall Jeep brand sales dropped 5%.

To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, David Welch

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