The Canadian federal government has issued a warning to automaker Stellantis, threatening legal action if the company fails to comply with its commitments to Canadians. This action comes following the company’s decision to relocate production of its Jeep Compass model from Brampton, Ontario, to Belvidere, Illinois. Industry Minister Melanie Joly expressed deep concern in a letter to Stellantis CEO Antonio Filosa about this move, which was part of a $13 billion US investment in the company’s American manufacturing operations.
Stellantis, aligning with U.S. President Donald Trump’s vision for a robust automotive sector in the U.S., faces challenges due to the 25% tariff imposed by the U.S. on Canadian automotive parts and vehicles. Minister Joly emphasized that despite these challenges, Stellantis has made significant commitments to Canada and its workforce. Failure to uphold these commitments could lead to legal repercussions, as indicated in the letter.
Two years ago, Stellantis entered into an agreement with the federal and Ontario provincial governments, promising up to $15 billion in performance incentives contingent on meeting certain conditions, including maintaining production in Brampton. Minister Joly emphasized the importance of Stellantis fulfilling its commitment to the Brampton facility, which has been undergoing upgrades to accommodate a new vehicle lineup.
The auto pact between Stellantis and the governments was established in 2023, similar to the deal struck with Volkswagen for an EV battery plant in St. Thomas. Despite the financial support offered by the governments, Stellantis must meet specific criteria, including job creation and project milestones. Failure to meet these conditions has resulted in the company not receiving provincial funding for the Brampton plant.
Ontario Premier Doug Ford expressed reluctance to provide further financial support for the Brampton plant, citing the company’s failure to meet the pact conditions. Stellantis, in response to inquiries, indicated plans for the Brampton facility but did not disclose details. The company refrained from commenting on financial agreements with the federal and provincial governments.