San Francisco, Dec 10 (IANS): Stellantis, the automaker behind Fiat, Jeep and Dodge has announced to lay off 1,200 workers and shut a key Jeep Cherokee plant in the US in February, as it focuses on investing more in electric vehicles (EVs).

Stellantis said that the plant, which produces the Jeep Cherokee SUV, will cease production as of February 28, reports CNBC.

"Our industry has been adversely affected by a multitude of factors like the ongoing Covid-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market," Stellantis said in a statement.

The company will shut the factory that builds Jeep Cherokees in Illinois, leading to 1,200 job cuts.

Cherokee sales were down by about 61 per cent through the third quarter of this year.

Stellantis and Samsung have planned to spend up to $3 billion for a battery factory in the state of Indiana.

The automaker is also investing $4.1 billion with LG for a similar facility in Canada.

The company described the idling of its Illinois plant as a "difficult but necessary action."

Stellantis said it is "working to identify other opportunities to repurpose the Belvidere facility and has no additional details to share at this time."

The United Auto Workers' organisation has described the move as "grossly misguided" and "unacceptable," especially during the holiday season, said the report.