Stellantis stated it’s reducing greater than 1,600 jobs at its Illinois Jeep plant, an indication the deepening chip scarcity that has idled auto vegetation is now doing extra lasting injury.

The automaker shaped from the merger of Fiat Chrysler Vehicles and French rival PSA Group stated it’s going to lower the second shift at its Belvidere plant by July 26, affecting as many as 1,671 folks. The transfer is meant to “steadiness gross sales with manufacturing” of the Jeep Cherokee, which is made there, the corporate stated Friday in an emailed assertion.

Manufacturing declines for the Jeep Cherokee SUV have been “additional exacerbated by the unprecedented world microchip scarcity,” Stellantis stated.

Whereas demand for autos has been outstripping provide because the U.S. emerges from pandemic lockdowns and folks go for personal transportation, the Cherokee hasn’t been a significant beneficiary. Gross sales tumbled 29 % final yr to 191,397 items, whereas deliveries on the Jeep model fell 14 % amid pandemic shutdowns.

The Belvidere meeting plant has been starved of chips through the disaster as Stellantis appeared to ration semiconductors for its most worthwhile autos. The plant has been idled in February, April and Might, based on researcher AutoForecast Options.

It has additionally been reducing manufacturing for some time: The corporate lower the third shift, affecting greater than 1,300 jobs, in February 2019. It laid off 150 folks on the plant in February.

Stellantis pledged in its final four-year contract with the UAW, reached in November 2019, to not shut the manufacturing facility through the lifetime of the contract, and to spend money on it.