Stellantis is temporarily halting production at factories in Mexico and Canada as the automaker adjusts to President Donald Trump's auto tariffs.
The parent company of Jeep, Chrysler, Dodge and Ram brands will idle its minivan plant in Windsor, Ontario, for two weeks, The Wall Street Journal reported. Also, a Jeep plant in Toluca, Mexico, will stop work for the rest of April, according to an email from the company's North American chief, Antonio Filosa.
Netherlands-based Stellantis makes the Chrysler Pacifica minivan and Jeep Compass SUV in those factories. As Mexico and Canada plants idle, it could also affect U.S. workers who produce parts for those assembly operations, the executive said in the email The Wall Street Journal reviewed.
Reuters reported that Stellantis is temporarily laying off 900 workers at five U.S. facilities.
Filosa said in the email the company will "quickly adapt to these policy changes and will protect our company, maintain our competitive edge and continue delivering great products to our customers."
Auto Tariffs And Stellantis Stock
Shares of Stellantis tumbled 7% to 10.45 in the first 90 minutes of trading on Wall Street Thursday. The stock peaked at 29.51 in March 2024 and has been trending lower since then.
The stock appeared to be bottoming out starting in October. But it began a new downtrend on Feb. 26, when it reported a 97% drop in earnings per share and 21% sales decline, according to IBD MarketSurge.
A new 25% tariff on autos goes into effect Thursday and had been announced before Wednesday's sweeping round of tariffs. The 25% duties are not added to the so-called reciprocal tariffs revealed Wednesday.
UBS autos analyst Joseph Spak said in a note to clients Thursday that tariff exclusions remain in place for parts under the USMCA trade pact, but "it's less clear if this will hold."
The new reciprocal tariffs include countries in Asia where electronic components are sourced, Spak said. In addition, countries like Indonesia, which got tagged with a 32% reciprocal tariff, are large providers of nickel, a key material for EVs. The reciprocal tariffs, thus, could indirectly raise the cost of vehicles.
Spak added, "If tariffs raise costs for the U.S. consumer in general and the policy has a negative impact on the economy, that could further dent U.S. auto demand. There are nearly unlimited permutations of the knock-on effects."
