Canada will seek to recover hundreds of millions of dollars from Stellantis (NYSE: STLA) after the automaker moved Jeep Compass production from Ontario to Illinois, Industry Minister Mélanie Joly announced Tuesday.
The government provided over $1 billion to Stellantis earlier this decade to reconfigure its Brampton, Ontario plant and maintain production in Canada. Stellantis canceled those plans in October, eliminating approximately 3,000 jobs.
“We’re going to get our money back from Stellantis and from GM,” Joly told reporters. She said she would provide more details in the coming days.
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Canada formally served Stellantis with a notice of default in December and reduced the company’s tariff-free import quota by 50% in October. The government stated the production changes violated Stellantis’ contractual obligations to Canada and Canadian workers.
Canadian officials and Stellantis representatives have held talks since at least November. Nearly 240 employees from the Brampton factory accepted transfer offers to work at a company facility in Windsor, Ontario.
General Motors faces similar action after cutting 500 jobs by eliminating the third shift at its Oshawa, Ontario, plant and abandoning electric van production in Ingersoll. The federal and Ontario governments each pledged up to C$259 million in 2022 for those facilities.
The compensation push comes as major US automakers’ share of Canadian auto production dropped to 23% last year from 56% in 2016. Honda and Toyota now account for 77% of production.
Read: Toyota Starts $1.1 Billion RAV4 Production in Ontario
Joly contrasted the pullbacks with Toyota‘s recent launch of sixth-generation RAV4 production at its Ontario plants. Toyota invested $1.1 billion in the new model and maintains over 8,500 employees at facilities in Cambridge and Woodstock.
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