‘We will sue them’: Canada threatens Stellantis as Trump trade war reshapes Jeep production plans
Industry Minister Mélanie Joly issues formal notice of default following the automaker's decision to shift production to the U.S.
Quick Look
- Canada has issued a formal notice of default to Stellantis, threatening legal action over the sale of its Brampton assembly plant.
- The government alleges the automaker breached funding agreements by moving production to the U.S. amid ongoing trade tensions.
AI-generated summary
Why It Matters
Stellantis is shifting production from Canada to the U.S. amid trade disputes and tariff pressures. The Canadian government claims this violates existing funding agreements.
Canada has threatened to sue auto giant Stellantis over the planned sale of an idled assembly plant in Brampton, Ontario, alleging breaches of a federal funding agreement after the carmaker announced plans to shift production to the U.S. amid President Donald Trump's trade war.
Speaking at a news conference on Thursday, Industry Minister Mélanie Joly said the government had served Stellantis with a formal notice of default, giving the company 30 days to address its concerns or face legal action.
"We sent a notice of default and, basically, they have 30 days — or else, of course, we will sue them," Joly told reporters in Toronto.
Joly said Stellantis had violated its contractual commitments to the Canadian government and the workers at Brampton by announcing an agreement to sell the plant to armored vehicle manufacturer Roshel earlier in the week. She added that the company was now "on the hook" for hundreds of millions of dollars over the move.
Canadian Prime Minister Mark Carney has described the situation at the Brampton plant as "unacceptable" and a "betrayal" of its workers.
A spokesperson for Stellantis, which owns auto brands including Jeep, Dodge, Fiat, Chrysler and Peugeot, was not immediately available to comment when contacted by CNBC on Friday morning.
The standoff comes as the U.S. and Canada remain locked in a bitter trade dispute, with Trump repeatedly putting pressure on automakers to move vehicle production south of the border.
Stellantis had scrapped plans to build its Jeep Compass at the Brampton plant and shifted future production to a factory in Illinois amid U.S. auto tariffs and other market pressures.
What to Watch
AI outlook — possibilities, not facts
Legal action if Stellantis does not resolve the default within 30 days.
Likely · Within months
Open Questions
- Will Stellantis comply within the 30-day window?
- What is the exact financial value of the funding agreement?
