Chrysler to cut nearly 1,400 Illinois jobs, add 6,500 in Michigan
The Jeep Cherokee manufacturer plans to lay off nearly 1,400 workers at its Belvidere, Illinois, facility and invest $4.5 billion in a 6,500-job expansion in Michigan.
The nation’s third-largest auto manufacturer will shrink its Illinois footprint with plans to expand across state lines.
Fiat Chrysler Automobiles announced Feb. 26 it plans 1,371 layoffs at its facility in Belvidere, which is close to Rockford, Illinois. That announcement came just hours after the manufacturer revealed it would invest $4.5 billion across five plants in neighboring Michigan, which it estimates will create 6,500 jobs.
Chrysler’s Belvidere site currently employs about 5,300 workers and houses exclusive production of the Jeep Cherokee, according to the Chicago Tribune. The company will retain its remaining 3,760 workers, The Associated Press reported.
The automaker previously housed production of the Cherokee in Ohio, before moving it in June 2017 to Illinois.
The company’s decision to scale back its Belvidere workforce was motivated by declining consumer demand for the Cherokee, Chrysler spokesperson Jodi Tinson said. Chrysler sees the Michigan investment and Belvidere cuts as “two separate, distinct actions,” Tinson told the AP.
But regardless of a link between the automaker’s decisions, the contrast between the Land of Lincoln’s losses and neighboring states’ gains is too familiar.
In 2018, Illinoisans saw numerous large manufacturers shutter facilities and slash jobs in Illinois, while relocating or expanding across state lines.
Unfortunately, state leaders’ poor decision-making is only likely to exacerbate the problem. Smaller businesses are already shedding jobs to brace for a $15 minimum wage increase signed into law by Gov. J.B. Pritzker, while others anticipate it will give an advantage to businesses in neighboring states.
Pritzker’s push to create a graduated, or “progressive,” income tax structure in Illinois will only damage the state’s slow economy and increase taxes for middle-class families. Illinois’ constitutionally protected flat tax is one of its few competitive advantages. A high property tax burden and hostile regulatory environment have suppressed Illinois’ economy in spite of its flat tax. Without it, spurring economic growth will be even more difficult.
To recapture lost investment, state leaders must create a tax climate that businesses flock to – not from.