The employee parking lot at Stellantis NV’s car assembly plant near Toronto sat mostly empty on a recent winter day. Inside the sprawling Brampton, Ont., factory, work on a new assembly line has been halted and the cluster of chimneys atop the building no longer belches emissions. It’s as if the factory – like the auto industry itself – is holding its breath.
The plant, built in 1986, has been closed since the end of 2023, its workers sent home to wait out a retooling for the next-generation Jeep Compass.
Then came more bad news. First, U.S. President Donald Trump warned of 25-per-cent tariffs on Canadian products, including automobiles. He vowed to “permanently shut down the automobile manufacturing business in Canada.”
In December, Stellantis chief executive officer Carlos Tavares departed the Netherlands-based company amid a reported rift with board members, who were unhappy with falling profits and Mr. Tavares’s plans to transition to a lineup heavy with electric vehicles.
And then on Feb. 20, Stellantis said it was pausing the retooling work at the Brampton factory amid “today’s dynamic environment,” laying off for eight weeks the 400 electricians, millwrights and other workers rebuilding the assembly line. Stellantis says it remains committed to the project, part of a $3.6-billion revamp of its Ontario assembly operations.
But add in slowing growth in sales of EVs and Mr. Trump’s move to kill the Biden administration’s EV mandates, and the plant’s employees are worried, says Vito Beato, president of the Unifor union local at the plant.
Mr. Trump said on Wednesday automobiles and some auto parts imported to the U.S. from around the world will face 25-per-cent tariffs starting on April 3. Vehicles – and soon auto parts – imported under the Canada-U.S.-Mexico trade agreement will be taxed at the same amount based on their non-U.S. content.
The headwinds could affect all Ontario vehicle assembly plants, “but Brampton especially,” says Mr. Beato, whose local represents 3,000 Stellantis workers and another 5,000 at parts suppliers and other businesses in the region northwest of Toronto. About 85 per cent of his members work in the auto industry.
“Members are concerned. Our plant is idle right now,” Mr. Beato says over coffee. “We’re vulnerable.”
Stellantis is reviewing the powertrain options for the Jeep, and it could move away from electric power to focus on gasoline and hybrids, Mr. Beato said. A Stellantis spokeswoman did not address that question in an e-mail.
On Feb. 20, Stellantis said it was pausing the retooling work at its Brampton factory, laying off the 400 electricians, millwrights and other workers rebuilding the assembly line for eight weeks.Andres Valenzuela/The Globe and Mail
Despite the pause, Stellantis has not changed its factory restart date from late this year, Mr. Beato said. For that to happen, the 400 Unifor workers doing the retooling need to be at work now, Mr. Beato said, instead of being on layoff.
Industry experts say a restart of May or June of next year is more realistic. Stellantis did not address questions about the restart date, but said the cars will be available in North America in 2026.
“As we navigate today’s dynamic environment, Stellantis continues to reassess its product strategy in North America to ensure it is offering customers a range of vehicles with flexible powertrain options to best meet their needs,” the company said in February.
The expected delay worries Mr. Beato.
The laid-off workers receive as much as 70 per cent of their wages for two years and time is running out. The 1,000 Unifor members who work at suppliers to the plant have no such backstop, and their benefits ended after 52 weeks. Mr. Beato and the union are pushing the company and governments to support the workers, and to extend wage protections for plant employees. “Those members are dear to my heart,” he said. “All members are, but especially those ones.”
Ontario is home to seven auto and two truck assembly plants owned by five auto manufacturers: General Motors Co., Ford Motor Co., Stellantis, Honda Motor Co. Ltd. and Toyota Motor Corp. Almost all the vehicles the companies make are exported to the United States and made of parts that cross borders several times. It’s a highly-integrated business built on decades of free trade and interwoven supply lines.
The Canadian auto industry employs 125,000 people, including about 71,000 who work for parts suppliers concentrated around vehicle assembly plants in Southern Ontario, according to Unifor.
“It’s principally located in Ontario, but is still incredibly important to the overall economy,” said Fraser Johnson, a professor at Western University’s Ivey Business School.
Not including GM’s BrightDrop electric parcel van, the five Ontario plants run by Ford, GM, Stellantis, Honda and Toyota made a total of 1.6 million cars in 2024, compared with 2.4 million in 2016. The rise of manufacturing in Mexico and other low-cost countries are partly to blame, as is declining car sales in Canada and the U.S.
Meanwhile, production by Detroit’s Big Three automakers at their plants in Ontario has slipped to about 400,000 vehicles.
“That’s not much. That’s a big assembly plant,” said Greig Mordue, a professor of engineering at McMaster University and co-editor of The North American Auto Industry since NAFTA.
Toyota’s production in Ontario exceeds the Big Three’s total, with 533,000 cars. Honda, at 420,550, is not far behind.
The North American auto industry fears U.S. tariffs will smother the supply chain in costs that cannot be passed on to buyers. North American car sales will sag. The industry could face shutdowns because of the imposition of tariffs, as cars and the parts that make them quickly become unaffordable for buyers and money-losing for the manufacturers.
Given Canada’s relatively high costs compared to Mexico, China and other countries, why do the automakers carry on here? Why didn’t the North American Free Trade Agreement, which made low-cost Mexico an auto manufacturing centre, bring about the death of the Canadian auto industry? Why haven’t automakers – which have closed plants here, slashed production and laid off thousands – abandoned Canada altogether?
“It’s because starting an assembly plant is hard,” Prof. Mordue said. “And they’ve been here for a long time. There are political considerations, and there are the practical considerations of how do you start a new assembly plan when you’re trying to launch new products and get another eight million vehicles out the door every year.”
Other factors in Canada’s favour are a reliable work force, government-provided health care and skilled technicians, even though much of the technology-intensive work is done closer to the automakers’ headquarters.
“We have good people and they come to work every day,” Prof. Mordue says. “But when you’re paying $60 an hour all in, in terms of benefits and pensions and everything else, and your competition in Mexico is $4 an hour plus, it’s tough to compete.”
Auto executives peg the costs of moving production to the U.S. at billions, and say it could take years to untangle and rebuild the supply chains. They view the tariff dangers as short-term. Although automakers have put some new investments on hold, they are not pulling up stakes and moving plants to the U.S.
The same goes for the large Canadian auto parts makers: Magna International Inc., Linamar Corp. and Martinrea International Inc. All three have operations that span North America and the globe, and their U.S.-based customers – and auto buyers – will have to pay the Trump tariffs.
Those costs will also be borne by Canadian car buyers, given the back-and-forth flows of auto parts before final assembly, not to mention any retaliatory tariffs.
U.S.-based customers of Canadian auto parts maker Linamar Corp., whose operations span North America and the globe, will have to pay the Trump tariffs.Glenn Lowson/The Globe and Mail
Analyst Chris Murray of ATB Capital Markets estimates the tariffs will add as much as $5,000 to the price of a car in Canada. This is at a time when consumer confidence is starting to wobble and stock markets are falling. “Does this end up damaging the North American market relative to other markets in the world?” Mr. Murray asks by phone.
Patrick McCann, finance chief at parts maker Magna, said at a recent investors’ conference the company has no plans to move its factories and does not expect the automakers Magna supplies to do so, either.
“There might be some short-term situations, smaller pieces that they can move,” Mr. McCann said. “But we’re not really seeing customers come up with [requests] where they’re changing the sourcing of where they are going to produce or where they expect us to produce.”
One of Magna’s biggest programs is supplying GM with aluminum frames for its full-sized trucks and SUVs, he said.
“Every single one of those frames are produced in either Canada or Mexico. And these are one-million-square-foot facilities,” Mr. McCann said. “These are the size of the decisions people are talking about. And the capital related to it is so significant. We’re probably talking three years to relocate the product. But this is driving a lot of costs and it’s going to drive a lot of costs for North American consumers.”
Prof. Johnson estimates its costs US$2-billion to US$3-billion to build an auto assembly plant, with a lead time of five to eight years. “So, these are not things that move around,” Prof. Johnson said.
Near the Brampton Stellantis plant, Mr. Beato, an employee since 1992, talks about the pride workers have in the cars they put together. The Dodge Charger and Challenger, and the Chrysler 300C, were beloved muscle cars albeit with small markets; before that there were Intrepids, Concordes, Magnums and more.
Mr. Beato's local represents 3,000 Stellantis workers and 5,000 workers at parts suppliers and other businesses northwest of Toronto. About 85 per cent of his members work in the auto industry.Andres Valenzuela/The Globe and Mail
He talks about the union’s meeting with Detroit Big Three executives and the importance of governments supporting workers and Stellantis keeping its commitments. “We’ll do whatever it takes to protect our industry,” he says. Brampton, he says, will build cars again.
The April 3 tariffs on autos will be followed by levies on auto parts on May 3 or later. Mr. Trump has also promised “reciprocal” tariffs against a list of countries.
Mr. Trump campaigned on levying tariffs, saying the taxes would bring home jobs and balance trade. But his love of tariffs upends a global march toward liberalized trade and rising standards of living, and it ignores more than a century of economic history.
Canada and the U.S. decided decades ago that free trade benefited both countries. It allowed companies to build efficient supply chains that linked far-flung resources with skilled and available work forces. Free trade also fostered competition and spurred employers to pare costs and pursue business where it was most profitable.
“When you’re protected by tariffs,” says Prof. Mordue, “it makes you less efficient over time because you get fat and sloppy.”
U.S. steel and other industries, and American labour unions, might be comforted by tariffs as ways to protect their markets and jobs, but this will not last, Prof. Mordue says. Rather, the tariffs erect a wall around the U.S. that will make its industries less efficient, innovative and productive, while limiting its markets.
Says Western’s Prof. Johnson, “The economic literature is very clear. Countries that allow free trade of goods and services with other nations have a higher standard of living.”