Stellantis (STLA.US) halts Jeep Compass production and development in Canada due to uncertain tariff outlook.

Stellantis(STLA.US) said on Thursday it would suspend development of its next-generation Jeep Compass compact SUV, including a revamp of a dedicated factory in Canada that builds the model. The Ontario, Canada, plant, which has been in operation for nearly four decades, was scheduled to close in 2024 for a retooling and reopen in 2025 with the launch of the new Compass, according to a company presentation in June 2024. The company said production would start in the first quarter of 2026, according to a spokesperson on Thursday. The compact SUV was to be built on a platform designed for electric vehicles and be flexible enough to accommodate other powertrains, including hybrids. The uncertainty created by the Trump administration's threat to impose 25% tariffs on auto parts and vehicles imported from Canada and Mexico as early as March 1 and its plans to unwind President Joe Biden's efforts to wean transportation off fossil fuels has been weighing on automakers. Unifor, the union that represents Stellantis workers in Canada, called the news "deeply troubling." "Lana Payne, president of Unifor, said in a statement: "The North American auto industry is facing chaos and uncertainty, with the industry constantly under threat of tariffs and the threat of the U.S. relaxing (electric vehicle) regulations, which is having an immediate impact on workers and business decisions." Sam Fiorani, vice president of AutoForecast Solutions, a research firm, said the production pause was more likely to be related to automakers rethinking their priorities between gasoline vehicles and electric vehicles. Stellantis said in a statement that it was continuing to "reassess its product strategy in North America to ensure that it offers a range of vehicles with flexible powertrain options to best meet customer needs." The automaker has been undergoing a strategic overhaul to get out of a 2024 jam, after the surprise departure of former chief executive Carlos Tavares, who had pushed a radical pricing strategy that led to a collapse in U.S. vehicle sales. The company's new leadership is moving quickly to adjust its product plans. Last December, Stellantis brought forward the launch of a new hybrid version of its top-selling Ram pickup truck ahead of an all-electric version.