Stellantis is facing challenges due to the new 25% tariffs imposed by the United States on foreign cars. As a result, production has been halted in Canada and Mexico, creating a cascading impact on American plants and causing a significant drop in the stock market.
To address the latest commercial setback implemented by Donald Trump, Stellantis has announced a temporary production stoppage at two of its strategic plants. As anticipated, the Windsor plant in Canada will stop for two weeks starting April 7. This facility assembles the Chrysler Pacifica minivan and the brand-new electric Dodge Charger Daytona.
Stellantis stock plummets following layoffs in the United States and Canada and plant shutdowns
Stellantis isn’t only facing issues in Canada. At the Toluca plant in Mexico, a shutdown has been imposed for the entire month of April. This facility produces the Jeep Compass and the electric Jeep Wagoneer S. By extension, American plants responsible for powertrains and stamping will also be affected. While it’s still unclear which specific plants will be involved, there will certainly be serious repercussions.
Stellantis’ move comes at a cost: approximately 900 workers laid off in the United States and 4,500 in Canada. If the effect of the tariffs is not mitigated, further cuts and additional production restructuring can be expected.
The financial blow couldn’t be missed. Fitch rating agency has downgraded Stellantis from BBB to BBB-, though maintaining a stable outlook. In other words: the situation is complicated, but for now we’re not at a “red alert” level. Investors, however, didn’t take it well. Stellantis stock closed with a 9.41% drop to $10.21.
From headquarters, the strategy is clear. They need to continue negotiating with the American administration to try to reduce the impact of these tariffs. But time is running out, and the North American market situation isn’t at its best. Will Stellantis be able to dodge this blow, or should we prepare for more shutdowns and layoffs?