Stellantis sends two plants in Mexico and Canada to idle due to tariffs

The Company is assessing the medium- and long-term impact of the duties and the options available

Stellantis NV has announced temporary layoffs at its US plants and is suspending production at two assembly plants in Mexico and Canada after Donald Trump announced the introduction of large-scale tariffs on imports to the United States. This was reported by CNBS.

The downtime at the company’s facility in Windsor, Ontario, Canada, begins on April 7 and will last two weeks, while the assembly plant in Toluca, Mexico, will be idle for the entire month of April.

According to the company’s spokeswoman, the pause will temporarily lay off about 900 workers at its US subsidiaries in addition to about 4,500 hourly workers in Windsor. Employees in Toluca will continue to report to work, but will not produce vehicles in accordance with the terms of their contracts.

Stellantis North American CEO Antonio Filosa said in a letter to employees that the plant downtime is related to tariffs as the company considers options.

“We are continuing to assess the medium- and long-term effects of these tariffs on our operations,” he said.

According to Filosha, the current situation creates uncertainty. However, he assured employees that the company is engaging with key stakeholders, including senior government leaders, labor unions, suppliers and dealers in the US, Canada and Mexico.

The production shutdown will also help Stellantis reduce vehicle inventory levels that have accumulated amid weak sales of many brands.

Other companies have also responded to the tariffs, Bloomberg reports. Thus, Ford Motor began offering large discounts to keep customers in the showrooms, and General Motors plans to increase the production of pickup trucks in the United States. At the same time, Volkswagen AG has warned dealers that it will increase import duties on vehicles it supplies to the United States. Toyota Motor, in turn, is cutting overtime at its plant in Mexico.

As a reminder, on April 2, the US President announced the introduction of large-scale customs tariffs against the country’s trading partners. Thus, the minimum basic tariff on imports from all countries will be 10%, which will come into effect on April 5. In addition, starting April 9, individual reciprocal higher duties will be introduced for countries with which the United States has the largest trade deficit.

Some goods are not subject to reciprocal tariffs. In particular, these are steel and aluminum products, cars/auto parts, which are already subject to Section 232 tariffs (25%). The tariffs on car imports came into effect on April 3, while the tariffs on auto parts will start on May 3.