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Stellantis to Temporarily Lay Off 900 Workers in the US After Tariff Announcement

Introduction

Stellantis NV announced a temporary layoff of 900 workers across five U.S. facilities due to recently imposed tariffs, along with a production halt at assembly plants in Mexico and Canada.

Context

The affected U.S. locations include powertrain and stamping facilities that supply parts to the factories in Mexico and Canada that are now idled. Stellantis, the manufacturer of Ram trucks and Jeeps, saw a 7.7% decline in its shares, trading at $10.40 in New York amid fears of a potential trade war.

Developments

Stellantis' Windsor Assembly, known for producing the Chrysler Pacifica and Voyager minivans, as well as the Dodge Charger Daytona, will halt operations for a duration of two weeks. Meanwhile, the Toluca Assembly in Mexico, where the Jeep Compass and Jeep Wagoneer S are manufactured, will cease operations for the entire month of April. About 4,500 Windsor workers will be affected, while those in Toluca will still report to work and receive pay, although they will not be producing vehicles.

The automaker is currently evaluating its response to notable tariffs on imported vehicles that began on Thursday. The standard U.S. tariff rate for automotive imports stands at 2.5%, with the possibility for manufacturers to deduct the value of U.S. parts from the 25% levy when importing vehicles from Canada or Mexico.

In a letter to employees, Antonio Filosa, Stellantis' chief operating officer for the Americas, stated that the company is assessing the long-term effects of these tariffs and has opted to take immediate actions, which include halting production at assembly plants in Canada and Mexico. These decisions will impact various employees at their U.S. powertrain and stamping facilities.

Furthermore, Stellantis announced a pause in the development of the next-generation Jeep Compass compact SUV, including the retooling of Brampton Assembly in Canada.

Conclusion

United Auto Workers President Shawn Fain criticized Stellantis for what he described as unnecessary layoffs, asserting that the company has the resources to employ more workers in critical states. Similarly, Lana Payne, president of Unifor, highlighted the immediate negative impact of U.S. tariffs on auto workers, suggesting that the interconnected nature of North American production will soon become apparent to decision-makers. The White House has yet to provide a comment regarding Stellantis' temporary job cuts.