Stellantis is pausing production at plants in Canada and Mexico and laying off 900 staff in the US

Stellantis is temporarily pausing production at its plants in Canada and Mexico this month and as a consequence laying off 900 staff at five plants in the US for the short-term. The decision follows the enforcement last week of a 25% tariff on vehicle imports to the US from Canada and Mexico, even if they are compliant with the rules on local content under the US-Mexico-Canada (USMCA) trade agreement.

”All our vehicles are USMCA compliant, however it is our understanding that the 25% tariff applies to all imported vehicles until the Department of Commerce implements a system to value US content, which would be deducted from the 25%,” said a spokesperson for Stellantis in North America.

In an email to all North American staff sent on April 3 and seen by Automotive Logistics, Antonio Filosa, chief operations officer for Stellantis North America, said the carmaker was assessing the medium and long-term effects of the US tariffs on its operations but had decided to take some immediate actions, including temporarily pausing production at some of it Canadian and Mexican assembly plants. Those are the Windsor Assembly Plant in Canada, which will shut for two weeks from April 7, and the Toluca Assembly Plant in Mexico, which will shut for a month from the same date. Stellantis was keen to point out that Toluca employees are not on layoff and, per contract, would continue to report to the plant, though not to build vehicles.

“Those actions will impact some employees at several of our US powertrain and stamping facilities that support those operations,” added Filosa. “These are actions that we do not take lightly, but they are necessary given the current market dynamics.”

The US powertrain and stamping plants laying off staff are the Warren Stamping and Sterling Stamping plants (Michigan), as well as the Indiana Transmission Plant, Kokomo Transmission Plant and Kokomo Casting Plant (Indiana).

The move indicates the tight integration of the North American automotive supply chain. 

Adapting to policy
Stellantis has been making efforts to mitigate the impact of trade uncertainty in North America and its commitment to North American manufacturing. Last month it moved more parts from suppliers in Mexico to the US and encouraged dealers to submit vehicle orders for production with the aim of getting those vehicles shipped.

At the Wolfe Research Virtual Auto Summit held last month, Stellantis’ chief financial officer, Doug Ostermann, outlined how Stellantis was working with tier one suppliers that might be impacted by US automotive tariffs, as well as mitigating the impact on the production of its vehicles. Ostermann said then that ongoing dialogue with the US Trump administration at various levels was important and it was a Stellantis priority to help the US government understand what the industry needs were to achieve growth in localised vehicle output.

The impact of the tariffs on the production of vehicles is now clearer and Stellantis is working to adapt its manufacturing and supply chain to the new situation.

“With the new automotive sector tariffs now in effect, it will take our collective resilience and discipline to push through this challenging time,” said Filosa. “But we will quickly adapt to these policy changes and will protect our company, maintain our competitive edge and continue delivering great products to our customers.”