The Current - Jobs in limbo as Stellantis pauses plans for Ontario plant

Episode Date: February 24, 2025

Automaker Stellantis has paused plans to build its new electric Jeep Compass in Brampton, Ont. Matt Galloway talks to Mayor of Brampton Patrick Brown and president of the Automotive Parts Manufacturers’ Association Flavio Volpe about what this means for the plant’s thousands of workers, amid the looming threat of U.S. President Donald Trump’s tariffs. 

Hi, I'm Saïd M. Dahoma. I'm a pastry chef with a neuroscience PhD. This year, the Great Canadian Book Debate is looking for one book to change the narrative. The books on this year's show all have the power to change how we see, share, and experience the world around us. I'm championing Dandelion by Jamie Chai Yun Liu in Canada Reads 2025. One book to change the narrative. For more on Canada Reads, go to cbcbooks.ca. This is a CBC podcast. Hello, it's Matt here. Thanks for listening to The Current, wherever you're getting this podcast.

Before we get to today's show, wonder if I might ask a favor of you, if you could hit the follow button on whatever app you're using. There is a lot of news that's out there these days. We're trying to help you make sense of it all and give you a bit of a break from some of that news too. So if you already follow the program, thank you. And if you have done that, maybe you could leave us a rating or review as well.

The whole point of this is to let more listeners find our show and perhaps find some of that information that's so important in these really tricky times. So thanks for all of that. Appreciate it and on to today's show. The auto industry in this country is on shaky ground as US President Donald Trump reiterated last week his plan to impose 25% tariffs on auto imports. Already 2,200 workers in Brampton, Ontario are bracing for the direct effects and perhaps already feeling them. Their employer, Stellantis, one of the major auto manufacturers in that province, has announced that it's freezing plans for launching the new Jeep Compass. The Brampton plant was shut down and was being retooled to make the new version of that car and that is now temporarily paused. The company says,

the current dynamic environment in its words in the auto sector has pushed it to reassess its North American product strategy. That dynamic environment would presumably include American tariff threats and changes to EV regulations as well as the president's desire to bring auto manufacturing back in a big way to the United States. Patrick Brown is the mayor of Brampton, Ontario.

Mayor Brown, good morning. Matt, nice to be on your show this morning. Good to have you back. How important is the Stellantis plant for people in Brampton? Well, it's very important. We had at one point 3,000 jobs at the plant, but there is also so many more associated jobs. We have eight magna factories in our city. We've got numerous auto companies that support this investment by Stellantis. And so, yeah, we're nervous.

We're worried that despite the reassurance from Stellantis that they will have people back at work in 2026. What were the plans for retooling this plant before the announcement? Because as I mentioned, the plant was shut down with the idea that it would be remade in some ways for a new era. Yeah, so in December of 2023,

they shut the plant down for a pretty significant retooling. It's a $1.3 billion investment to take a traditional auto plant and make it equipped for electric Jeep production. Now they're saying because of the changing market conditions that it may not be the Jeep and that it's likely gonna be something else.

And so, the one sign of encouragement is the fact that they put $1.3 billion into this plant and you're likely not gonna throw that out the window. Having said that, this is a long pause on a plant that was integral to our community that had a lot of economic spin-off. And so I just hope we can get up and running again as quickly as possible. But, you know, with the whole Trump threat

on the horizon, I think it makes me nervous for the auto sector in Canada. Well, tell me more about that. I mean, how do you square Stellantis saying that this is a, I mean, in the corporate language, a temporary pause with a lot of money coming into the plant and this big dark cloud that is is a, I mean, in the corporate language, a temporary pause with a lot of money coming into the plant and this big dark cloud that is hanging over not just Brampton,

but over the entire auto sector. Yeah, we have a US president who's very clearly saying he's going after Canadian jobs. He very clearly has targeted the auto sector. And I think you've got large corporations like Stellantis mindful of a changing environment right now. And so I hope that we are doing what we can to make sure that we protect these jobs against the threat we're facing from south of the border.

I would add, you know, the government of Canada, the province of Ontario has investment in these plants. You know, it was only three years ago that they announced a billion dollar investment into the plants in Windsor and Brampton. And so we've got stake in this. And I would expect the government of Canada and the province of Ontario to say,

based on the legal agreements we have for this investment, this, the jobs need to continue to come here. That's what you want to hear from those levels of government, the jobs need to continue to come here. That's what you want to hear from those levels of government, the jobs need to stay there? Absolutely, and I would say the company is saying that the jobs are staying here, it's just gonna be a 2026 return instead of 2025, but I hope there's conversations happening behind the scenes

that is very clear to the company that the government of Canada, our taxpayers, made an investment in these plants on the condition that the jobs stay in Canada. Do you think Stellantis cares about that now in this current environment where the US president says we want auto manufacturers to be back here in the United States? There's an announcement from Apple this morning. It's a different universe in some ways, but Apple, threatened by the US president now says, you know what, we're going to plow all sorts of money into the United States. We're going to create 20,000 jobs in the United States. Do you think Stellantis cares what the federal or provincial government says in Canada when

you have the US president threatening? You'd think a $1.3 billion investment would not be something you'd want to throw out the window. You know, you see large companies, you know, have write-offs, but to that size would be extraordinary. So I hope they do. I hope that the language that was written by the province of Ontario and the government of Canada is strict enough that there'd be some liability for Stellantis if they left. But like I say, right now they say they're not leaving, but I am nervous based on what we're seeing. We've never seen a US president this forcefully go after Canadian jobs.

Do you think there's a long-term future for auto manufacturing in your city? I do, because people drive cars in Canada, and we want to purchase cars that are built and assembled in Canada. And so I think there's a market in Canada that warrants production in Canada. So yeah, I think there's absolutely a future for this sector in Canada. It does need to evolve. I think the retooling to build electric vehicles

was necessary given the fact that the auto sector is changing to become electric. And so, yeah, I'm optimistic that we can have a bright future for the auto sector in Canada. What would you say just finally to those 2,200 people who hear this announcement and they wonder whether their jobs are going to come back or not? Stellantis says that this is a temporary pause,

but again, given everything that we've talked about, things can change. Well, I just say to those workers, you've got a great representative in Unifor that has been vocal on this from day one when there was rumors of this retooling and we'll work with Unifor, the province of Ontario, the government of Canada to do whatever

we can to keep these jobs here in Canada. Patrick Brown, good to speak with you. Thank you very much. My pleasure. Patrick Brown is the mayor of Brampton, Ontario. Flavio Volpe is president of the Automotive Parts Manufacturers Association. Patrick Brown mentioned some of those spin-off industries that are connected directly with the Stellantis plant and that's who in part, Flavio, represents.

Flavio, good morning to you. Great to be back on, Matt. What do you make of this pause in activity at the Stellantis plant in Brampton? What's going on here? Well, we're seeing this, frankly, across North America. It isn't just Canada. And when the company talks about a changing dynamic, it's not just about Trump tariff threats.

In this case, I don't think it is at all. It is Trump's threat to remove the EV purchase incentive of $7,500 for Americans. And this plant was probably going to export 85, 90% of those jeeps to the US market. And so what we're seeing is what we saw happen in Oakville with Ford who committed to making battery electric vehicles and then had to pivot with the market and they said, okay, look, we're coming back, we're going to make super duty trucks that will have a new energy equivalent in it. And they pushed the retooling back a bit. And in Windsor when Stellantis announced it was going to do an all electric charger, and

then we find out there's a V6 version. In the end, they're not charities. They have to, they got gotta build what people will buy. And so I'm not as worried as other people here. Jeep and Stellantis are in the business of making money and that Jeep Compass equivalent is a very popular product in the US. Let me go back to just something you said though.

You said this has nothing to do with tariffs. Are you serious? No, no, no, no, no, no, no. What I said was that it has less to do with tariffs than it has to do with the product Are you serious? No, no, no. What I said was it has less to do with tariffs than it has to do with the product that was planned. And you know, this is- I mean, one of the reasons why I would say, to be clear on this, is that people have been looking

for the beginning of a pullback. And they see this as that in part because of other things other people have said. The CFO of GM saying that if tariffs are a permanent installation in our economic environment, that that company is going to have to consider moving plants. That there's, as you know what I mean, that there's something in the atmosphere right now. No question. And man, I'm probably the most active automotive voice in North America on this subject.

This is interview number 140 since February 1st. I know. We're glad to be number 140. Thank you. Hey, I would have come on number one if you'd invited me. But I'll say, I'm watching this one very closely. This is a publicly traded company that does not have to say that it's committed to the investment. And if they're doing it publicly, this is when regulators listen.

I also know that the deal that that company made to invest in a battery plant in Windsor and 650 R&D jobs and the Windsor and Brampton plant is a package. And it was designed that way so that if the government of Canada and the government of Ontario were going to commit to co-investing, it was all or nothing. And I will say this company made the biggest bet when it did three years ago on Canada in its history.

And they are, they wanna make it work. And like the mayor said, we buy 2 million cars a year here. We make 2 million cars a year. We import three quarters of the vehicles we buy from the US and we export about 80%. It is a, you know, if I'm sitting there and I'm a Jeep product planning, I'm saying, okay, look, one of the things I got to make sure is whatever we make there, that it's

a popular product also for Canadians so that we can build where we sell. I'm not as worried as everybody else is, but absolutely my antennas are up. What do you think, when we were down in Windsor just a few weeks ago, we were speaking with people who work at Stellantis and people who represent those who work at Stellantis, there are a lot of concerns around the EV battery plant investment, that Stellantis and LG solutions have made in Windsor. And the suggestion from some people was perhaps

people need to think about what else you could make in that plant. People, the batteries that are used elsewhere, perhaps not just in cars. Do you think that that's going to be a necessary pivot, if I can put it that way? I don't think it's a possible pivot from a technical point of view. You're speccing batteries and their packages

and their voltage to vehicles. So you're either in for cars or nothing at all. Well, what they're making there though, or they're making the cells. Imagine a battery pack in a car is like a case of beer. These are the bottles of beer. So when they get put in a case, they ship. But if they're just the bottles, you can send those elsewhere.

You can ramp up and ramp down in that plant. I'm not worried about that plant. But I am worried that the one thing that nobody has ever modeled in any of these auto companies, foreign or domestic, is that the president of the United States would disregard macroeconomics and aim at them. It's a tough moment we all have to get through. But if I've been saying any of the major companies that have a time on their side before they put shovels in the ground and bolts on machines, they'll take that time. And I think we're seeing that here and we're seeing that as a trend, but we haven't seen

anybody actually disinvest in Canada. It's a, let me be smart. We're fighting with the Chinese and the American president isn't on our side. And is your sense, I mean, again, just finally, that those decisions haven't been made yet, but again, back to what the CFO of GM was saying, that this is something that's a possibility, that if these tariffs become real and they stick, that these companies are going to have to make tough decisions that will impact not just the 2,200 people in Brampton, Ontario, but people across that sector.

I think the CFO of GM and the CEO of Ford are our friends on this. CEO Ford said tariffs on Canada and Mexico will blow a hole through the US sector. It's those voices and those people that I think pulled us back from the brink on January 31st. There is without a doubt that if the president manages to sink Ontario's auto sector, he will immediately sink Michigan. And it's just the way we ship parts and the way we're set up. And you can't find another place like Home Depot to buy the seats that were engineered for a Jeep. And ultimately, the fact that we're so intertwined is the reason why I'm not asking for a carve out from governments on automotive. Because Michigan, Ohio, Tennessee, Alabama, Texas, all of those states,

all of their businesses will sink, including the biggest, longest running American car companies would be the first casualties. We'll have you back to talk more about this as it develops. Flavio, thank you for this morning. Anytime, thank you. Flavio Volpe is president of the Automotive Parts Manufacturers Association.