Cars pass along the assembly line at the Stellantis plant in Brampton, Ont., in July, 2023. The plant, which has been closed for almost two years for retooling, was to produce the Compass SUV when it reopened.Chris Young/The Canadian Press
The government of Canada is threatening to sue automaker Stellantis NV over its move to shift production of the Jeep Compass to Illinois from Brampton, Ont.
Industry Minister Mélanie Joly issued the warning in a letter to Antonio Filosa, chief executive officer of Stellantis, which on Tuesday unveiled a US$13-billion plan to boost auto production in the United States by 50 per cent over four years.
Industry watchers say Stellantis is trying to avoid U.S. President Donald Trump’s 25-per-cent import taxes, which are costing U.S.-based automakers billions of dollars, driving down profits and snarling supply chains built on decades of free trade between Canada and the U.S.
Automakers in Ontario have taken steps that include slashing jobs, reducing or delaying production and absorbing the tariffs as exports to the U.S. have fallen.
Stellantis’s Brampton plant has been closed for retooling for almost two years and was to produce the Compass SUV when it reopened. Stellantis also operates a minivan plant in Windsor and is a partner with LG Energy Solutions at Windsor’s NextStar EV battery plant, which is getting as much as $15-billion in funding from Ottawa and the province of Ontario. The financing, with Ontario paying one-third and Ottawa covering the rest, is partly based on production incentives.
Ms. Joly, in her letter dated Oct. 15, called the SUV’s production shift “unacceptable.” She warned Stellantis made legally binding commitments to maintain its Canadian footprint – including Brampton - in exchange for “substantial” financial support for its battery and auto plant ventures.
“Anything short of fulfilling that commitment will be considered as default under our agreements,” Ms. Joly wrote. “Should Stellantis choose not to respect its obligations, we will act in the interests of all Canadians and hold the company to full account, and exercise all options, including legal.”
Industry Minister Mélanie Joly, pictured in the House of Commons in September, wrote a letter to Stellantis's chief executive, warning the company that it has obligations to maintain its Canadian footprint.Adrian Wyld/The Canadian Press
Stellantis confirmed it has received the letter but declined to comment on it. “We have plans for Brampton and will share them upon further discussions with the Canadian government. We do not comment on our discussions with government officials,” it said in a statement.
A senior government official said Ms. Joly spoke to Stellantis’s Canadian president before the announcement, but the auto giant was unmoved by her appeal to protect the Brampton auto jobs.
The official said there are no immediate plans for further engagement with Stellantis executives.
Ms. Joly is tentatively planning to meet Unifor, which represents workers at the plant, and Ontario government officials as early as Thursday.
The Globe is not revealing the identity of the official because they were not authorized to publicly discuss the matter.
Canadian and U.S. officials resumed trade talks in Washington on Wednesday. The Canadian delegation is seeking relief from U.S. tariffs on cars, metals and other exports vital to the domestic economy.
Stellantis’s production shift raises questions about the future of the Brampton plant, which was built in 1986 and employed more than 3,000 hourly workers when it closed for construction in 2023.
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Vito Beato, president of the Unifor local at the plant northwest of Toronto, said the Stellantis Canada officials who told him of the move on Tuesday mentioned no alternative plan or vehicle for the factory to build.
“The company said it has to do with the tariffs and the feasibility of building cars in Brampton,” Mr. Beato said. “This is disrespectful and disgusting.”
Stellantis spokeswoman Lou Ann Gosselin said Canada is “very important to us.” She said the $8.6-billion in investments in Canada the company announced in 2022 – including $1-billion retooling Brampton - are mostly completed or being spent. By early 2026, Stellantis will have added 2,500 jobs in Canada, accounting for a third shift at its minivan plant and NextStar Energy EV battery plant in Windsor, she said.
Ontario Premier Doug Ford on Wednesday said the province’s financial support for the battery plant is in question.
“I’m not going to give them a penny because it was tied in to … keep Brampton going,” Mr. Ford told reporters. “It’s disappointing. They said they’re going to keep Brampton open.”
Sam Fiorani, an analyst at Pennsylvania-based AutoForecast Solutions Inc., said his research found Stellantis planned to make a new Chrysler vehicle in Brampton in a couple years, alongside the Compass. But the Tuesday announcement – against the backdrop of Mr. Trump’s chaotic tariff rollout - casts this plan in doubt, he said.
“We were very confident two days ago,” Mr. Fiorani said. But “in the current environment, everything’s up in the air. Things change at a moment’s notice and much faster than is tradition in this industry.”
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AutoForecast Solutions crafts its production insights based on supplier and manufacturing connections, as well as knowledge of a company’s markets needs and niches.
Stellantis’s Ms. Gosselin called Mr. Fiorani’s mention of a new Chrysler product in Brampton “rumour and speculation.”
Mr. Fiorani said Stellantis’s announcement was made – at least partly - with Mr. Trump in mind. “The goal is to keep the current administration happy and make sure that they have an uninterrupted flow of products, especially the profitable ones,” he said.
Mr. Ford said Stellantis Canada president Jeff Hines told him on Tuesday Stellantis will find a new vehicle for the plant. “He said, ‘Well, we’re going to postpone it for a year. We’re going to find a new model.’” As many as 1,500 Stellantis Brampton workers will be able to transfer to the Windsor plant, Mr. Ford said.
Unifor’s Mr. Beato said the number that accept a transfer will be far fewer than 1,500, given the cities are four hours apart.
With reports from Laura Stone