Stellantis Shifts Some Truck Production From Mexico To The US
- Starting May 5, Stellantis will also pause production at a plant it operates in Ontario.
- The carmaking giant is making supply chain alterations to increase USMCA content.
- It’s unclear how many more Stellantis trucks will be assembled in the US.
Stellantis announced that it will shift some of its pickup truck production from Mexico to the United States in order to avoid paying the hefty tariffs imposed by President Trump. This comes shortly after confirmation that Stellantis will halt production at its assembly complex in Ontario, Canada, for a week.
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During a recent conference call with analysts, Stellantis chief financial officer Doug Ostermann said that in addition to shifting some truck production to the US, the automaker wants to alter its parts supply lines in order to increase its vehicles’ American content.
Read: Stellantis Halts Charger Daytona Production As It Temporarily Cuts 5,400 Jobs And Idles Plants
Trump’s measure initially shook the auto industry to its core, but refinements to the administration’s policy have since been made. As part of recent changes, US car manufacturers can apply for tariff rebates depending on the proportion of car content that is compliant with the US-Mexico-Canada Agreement (USMCA).
As noted by The Globe and Mail, the rebate is worth 3.75 percent of the retail value of a firm’s US production in the first year and 2.5 percent in the second. Ostermann says the group’s current vehicles built in the US have roughly 80% USMCA content, but if it can boost this to 85%, the first year’s rebate will cover the tariffs applied to the remaining 15% of content.
“We’re very, very active in working on that,” he said. “Some suppliers who may have excess capacity in the United States may be able to switch relatively quickly, and other suppliers [will] take much longer.”
Stellantis has not provided any info as to how many more of its pickup trucks could be built in the United States moving forward.
Earlier this week, it was reported that Stellantis will pause production at its Windsor, Ontario, site for a week starting on May 5. This site builds the new Dodge Charger and Chrysler Pacifica, and was also closed for two weeks during April as the impact of the US tariffs was being assessed.
According to the Unifor union which represents workers at the site, Stellantis has not provided a reason why production will be halted next week.
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