Stellantis pauses Windsor and Mexico auto production, lays off U.S. workers

Auto maker Stellantis NV is temporarily halting production at assembly plants in Windsor and Mexico and laying off 900 workers at six U.S. factories as it weighs the impact of U.S. President Donald Trump’s tariffs on imported cars.

The Ontario plant, which employs 3,600 hourly employees and makes minivans and Dodge Chargers, will close for two weeks on April 7, Stellantis said on Thursday. About 3,200 employees are affected. The plant in Toluca, Mexico, which employs 2,600 and makes the Jeep Compass, will shut for at least the month of April.

The temporary U.S. layoffs are at factories in Michigan and Indiana that supply the two assembly plants: Warren Stamping plant, Sterling Stamping plant, Indiana Transmission plant, Kokomo Transmission plant and Kokomo Casting plant.

“We will continue to monitor the situation to assess whether further action is required,” Stellantis said in a statement. “Stellantis continues to assess the effects of the recently announced U.S. tariffs on imported vehicles and will continue to engage with the U.S. Administration on these policy changes.”

James Stewart, president of the Unifor local at the Windsor plant, said he found out the factory was halting production on a Wednesday night Zoom call organized by Stellantis officials and attended by Unifor national president Lana Payne and others.

“There were rumors of some downtime, but then they made it clear last night,” Mr. Stewart said by phone. “They told us there are many factors, but the ultimate deciding factor was the Trump announcement this afternoon. They’re temporarily shutting our plant.”

Stellantis told the union leaders to expect schedule changes when the plant reopens but did not provide details. The plant operates two shifts and was slated to add a third at the end of this year.

“They’re going to assess the situation over the next couple of weeks or coming days and let us know,” Mr. Stewart said. “We’re expecting something else. We just don’t know what.”

Members are worried, he said, calling the tariffs “unjust” amid a balanced Canada-U.S. trading relationship.

“This has nothing to do with fentanyl or illegal immigration,” he said.

Canadian auto jobs come with good pay and benefits, unlike those in Mexico and other low-cost countries that have ramped up production at the expense of workers in Canada and the United States.

“We’re not the jurisdiction that’s taking jobs,” Mr. Stewart said. “Other jurisdictions [do that], including taking jobs from Canadians, but we’re not the jurisdiction that he should be attacking.”

The tariffs, which began on Thursday, apply a 25-per-cent charge on all vehicles, excluding the portion of Canadian-made autos that is U.S. content. Vehicles made in Ontario contain about 50-per-cent U.S. content, and would be subject to a rate of about 12.5 per cent.

Prime Minister Mark Carney responded on Thursday, announcing Canada will apply 25-per-cent tariffs on U.S.-made automobiles that do not comply with provisions of the United States-Mexico-Canada Agreement (USMCA). The tariff also applies to non-Canadian content of USMCA-compliant vehicles.

Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, which represents 230 Canadian suppliers, said Elon Musk’s Tesla will be among the vehicles to face Canadian tariffs, given their high U.S. and Chinese content.

Stellantis employs about 9,000 people in Ontario. Its Brampton factory closed for retooling at the end of 2023 and the conversion for the Jeep Compass was put on hold in February. The plant, which employs 3,000 hourly workers, is expected to reopen later this year.

The Stellantis shutdowns announced on Thursday will hit dozens of companies in Ontario and Michigan that supply the assembly plants, Mr. Volpe said, predicting layoffs will soon happen at those suppliers.

“I’m not surprised,” Mr. Volpe said by phone. “I also am absolutely unhappy about it.”

The Trump administration should take the layoffs and plant shutdowns as an “immediate warning” it needs to drop the tariffs, Mr. Volpe said. “The canary just died,” he said.

Ontario Premier Doug Ford said he spoke to the CEO of Stellantis Canada on Thursday about the Windsor shutdown.

“Hopefully this plant is going to reopen. It’s a temporary shutdown. I mentioned my concerns to the CEO of Stellantis and how we need to have this plant up and going,” Mr. Ford said.

Mr. Trump says the tariffs will spur manufacturers to build in the U.S., creating jobs. However, experts say the tariffs are inflationary and will reduce car sales and production. It would cost billions of dollars and years to move factories and rebuild supply lines.

“Unifor warned that U.S. tariffs would hurt auto workers almost immediately and in this case the layoffs were announced before the auto tariff even came into effect,” said Ms. Payne, the Unifor national president.

“Trump is about to learn how interconnected the North American production system is the hard way, with auto workers paying the price for that lesson.”

About 44 per cent of the cars sold in the U.S. are imported.

Jonathan Smoke, chief economist at U.S. consultancy Cox Automotive, said creating U.S. jobs is an admirable goal. “But the current state of the global automotive market has been more than six decades in the making. Change won’t happen overnight, nor will it happen in just a few years,” Mr. Smoke said in research note.

“The evolution will be slow and difficult, and in the near term, after an initial, short surge in buying, we expect vehicle sales to fall, new and used prices to increase, and some models to be eliminated if tariffs persist.”

With files from Jeff Gray