Stellantis had committed to keep its Canadian manufacturing presence stable in exchange for funding by Ottawa.
The company announced yesterday that its Brampton assembly plant would not make the next Jeep Compass after all.
If the automaker doesn’t come up with a plan for this factory and its employees, it would be in breach of its agreement.
When we covered the news that Stellantis was moving the production of the next-generation Jeep Compass from Ontario to Illinois earlier today, the Canadian federal government had yet to respond to the automaker.
This has now changed, according to a letter seen by Bloomberg, which was sent by Industry Minister Melanie Joly to Stellantis CEO Antonio Filosa.
Indeed, Ottawa threatened to sue the Franco-American automaker, which it now considers in breach of the terms of agreements made when the company received federal funding over the last few months and years.
These deals provided financial support to Stellantis in order to help it retool its Brampton factory and increase its EV manufacturing presence in Canada. In exchange, the company agreed to maintain its full local production footprint in the country, which most notably includes the Windsor and Brampton assembly plants.
The latter is at the heart of the issue, since now that the Jeep Compass is expected to be manufactured in Belvidere, Illinois, the Brampton facility is left without any future products to build.
It is worth remembering that production at the facility ended at the end of December 2023, ahead of a retooling period that was supposed to ready the plant for the manufacture of the Compass, including its electric variant.
Stellantis Brampton Assembly Plant | Photo: StellantisWork on this project stopped back in February of this year following the imposition of tariffs by the Trump administration on automobiles built in Canada, and it hasn’t picked back up since.
In her letter, Minister Joly demanded that Stellantis come up with new plans to use the Brampton facility and to honour contracts with Canadian suppliers.
The automaker had already said yesterday that it would share more details about the future of this assembly plant after having talks with the Canadian government, so this should happen imminently.
According to Joly, there are legally binding commitments made by the automaker which would be breached if the Brampton assembly plant is abandoned, providing grounds for a lawsuit.
Prime Minister Carney said on social media that his government, the Ontario government, and the Unifor union are working with Stellantis to provide security for its employees and to create new opportunities in Brampton.
He added, “We have further made clear that we expect Stellantis to fulfil the undertakings they have made to the workers of Brampton”.
Ontario Premier Doug Ford said he also talked with Stellantis, sharing its disappointment at the company’s decision to prioritize production in the United States.
Unifor president Lana Payne said saving the Brampton Assembly Plant, which employed around 3,000 workers prior to closure, should be Canada’s top priority.
The union further stated that “Stellantis cannot be allowed to renege on its commitments to Canadian workers, and governments cannot stand by while our jobs are shifted to the United States”
Stellantis Announces $13 Billion U.S. Investment, Shifts Jeep Compass from Canada
As a reminder, the news that Stellantis would move part of its future production away from Canada comes a week after U.S. Commerce Secretary Howard Lutnik reiterated that the Trump administration’s goal is to move all current vehicle production from Canada to the United States.
At the moment, Stellantis is not entirely abandoning its Canadian manufacturing presence, as it prepares to add a third shift to its Windsor assembly plant, which builds the Chrysler Pacifica and Grand Caravan/Voyager minivans, along with the new Dodge Charger.
In terms of Canadian production volume, Stellantis still ranked third behind Toyota and Honda last year, despite the Brampton plant being offline.
The Canadian operations of the other two American automakers seem even shakier, with Ford also being in the process of retooling its only production facility in the country, meaning that no Ford or Lincoln vehicles are currently being made locally.
For its part, General Motors had already announced it would cut a shift at its Oshawa factory, which makes the Chevrolet Silverado, early next year, and large investments at another facility that makes the same model in Indiana raise questions about the future of the Canadian plant. Unlike its Detroit rivals, General Motors currently operates a second assembly plant in Ontario, with the Brightdrop electric vans being made in Ingersoll.
Source: Automotive News Canada
