Canada expected cars from that factory and now threatens to take Stellantis to court: it has even given an ultimatum
Canada has notified Stellantis of an alleged breach related to the Brampton factory in Ontario. The group has 30 days to respond; afterwards, the Government could claim public aid and go to court.
The future of the Brampton factory has once again pitted Stellantis against the Canadian Government. Ottawa argues that the group abandoned the plan to manufacture the Jeep Compass there without proposing a vehicle to replace it. The facility was set to receive an investment to prepare for the production of new models, as explained in the industrial plans announced for the plant.
The Minister of Industry, Mélanie Joly, has given the company 30 days to demonstrate that it will rectify the breaches attributed to it by the Executive. If it does not, Canada could declare it in default and take legal action. The notification opens a period to respond: it does not mean that the Government has already filed a lawsuit. Associated Press reported on the ultimatum and possible measures.
The conflict coincides with the agreement announced by Stellantis and Roshel for the manufacturer of armored vehicles to acquire the factory and the associated equipment. The statement from Stellantis, submitted to the SEC, confirms that both companies signed an asset purchase agreement on November 9. The amount has not been disclosed and the operation is still pending closure.
The relocation of the Compass left the factory without a replacement model
Canada and Ontario had committed aid to transform the Brampton and Windsor plants and adapt them for electric vehicle manufacturing. The federal Government announced up to 529 million Canadian dollars for a 3.6 billion investment project. Ontario, for its part, offered up to 513 million. Those figures correspond to the joint plan for both facilities, not exclusively to Brampton, according to the documentation from the Canadian Government.
The Brampton factory ceased operations in 2024 for its remodeling. Stellantis had planned to manufacture the Jeep Compass there starting in 2026, but in October it announced that it would produce the model in Belvidere, Illinois. Ottawa considers that the group breached the agreement by abandoning the project without identifying a replacement for the Canadian plant.
The current generation of the Compass intended for Europe is manufactured in Melfi, Italy, as detailed in Motor.es in its information about the model. This production is different from the plan to manufacture the future Compass for the North American market in Brampton.
Stellantis offers to return aid while negotiating the sale
More than 2,000 workers have been affected by the decision to relocate production. Stellantis has communicated that it is willing to return certain aid linked to the Brampton project, although it has not disclosed the amount. Canada demands a solution to the breach it attributes to the group and could require the return of funds if it declares it in default.
The purchase by Roshel opens a way for the facility to regain industrial activity. Stellantis has described the agreement as a step to give a new productive use to the factory, but the operation does not alone resolve the dispute regarding the obligations of public investment.
The discussion comes while Stellantis reorganizes its investments in North America. The company has announced changes in its industrial strategy and more resources for its operations in the United States. The sale of Brampton and the relocation of the Compass to Illinois are at the center of Canada’s response: within 30 days, Stellantis must explain how it plans to correct the breach attributed to it by the Government.
* This news is an AI translation of the original content. Motenic.com is part of Motor.es.