The Canadian government has threatened legal action against global car giant Stellantis over its plans to move production of the Jeep Compass to the US.
Earlier this week, Stellantis revealed a $13bn (£9.68bn) investment in America and plans to shift manufacturing of the Compass model from Ontario to its Illinois plant.
Canada’s Industry Minister Mélanie Joly said the firm had made a “legally binding” commitment to stay in the city of Brampton in exchange for financial support, and would “exercise all options, including legal” if it did not uphold the agreement.
Stellantis said it was investing in Canada and had plans for its Brampton plant, details of which it could not currently disclose.
In her letter to Stellantis chief executive Antonio Filosa, Mélanie Joly said the country had given the company “billions of dollars” and the move would jeopardise the future of its Brampton factory.
In a statement on Wednesday, Mr Filosa it was the largest investment in the company’s history, and “would drive our growth, strengthen our manufacturing footprint and bring more American jobs to the states we call home” – but did not mention its Canadian operation.
Responding to the announcement, Joly said the car maker and the Canadian government had “built a strong and enduring partnership”.
“We were there for the company in 2009 to pull it back from the brink of bankruptcy, and now we expect you to be there for Canadians,” she added.
Canada’s Prime Minister Mark Carney said the government was working with the company to protect Stellantis staff at the Brampton site and try “to create new opportunities” for them locally.
A Stellantis spokesperson said it was expanding its operations at its Windsor plant in Canada, which would create 1,500 new jobs to “support increased demand” for its Chrysler Pacifica and new Dodge Charger Scat Pack models.
“Canada is very important to us. We have plans for Brampton and will share them upon further discussions with the Canadian government,” they said.
Reuters reported that the car maker had paused retooling of the factory in February after US President Donald Trump announced tariffs against Canadian goods.
Stellantis owns 14 car brands, including Alfa Romeo, Maserati, Jeep, Fiat, Citroen, Chrysler and Dodge.
While the car maker has manufacturing plants in the US, it also produces vehicles in the UK, Europe, Canada, Mexico and South America.
In July, the company said tariffs imposed by the Trump administration had cost it $349.2m (£259.6m).
Trump introduced car tariffs to boost the American car manufacturing industry, but within a month he eased tariffs on foreign car parts.
On Tuesday, Trump’s new 10% tariff on softwood lumber came into effect. It means products from Canada – the second largest producer globally and a major US supplier – now face levies of more than 45%.
Most Canadian producers already faced a combined 35% in US tariffs due to a long-running trade dispute between the two countries over the product.
By BBC News
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