Ottawa serves Stellantis with default notice over Brampton plant; 30 days to comply or repay funding

Industry Minister Mélanie Joly wrote on Thursday (November 12) to Stellantis Canada chief executive Trevor Longley, formally notifying the automaker that it is in default of a 2022 federal funding agreement and giving it 30 days to correct the breaches, or the government may terminate the agreement and claw back all or part of the funding. Joly also terminated the resolution process the two sides had been holding over the future of the Brampton plant.

The breaches: halted production, no replacement vehicle, sale of the plant

The letter lists four breaches: halting Jeep Compass production, failing or refusing to identify a replacement vehicle, maintaining no production at the facility, and closing the plant. Joly wrote that Stellantis's plan to sell the Brampton plant to armoured-vehicle maker Roshel shows the company is "no longer diligently working in good faith to prepare a satisfactory plan," and she therefore ended the resolution process. The minister said she may supplement the notice with further breaches related to the sale.

$529 million in federal funding; 3,000 workers affected

Under the 2022 agreement, the federal government committed up to $529 million to Stellantis plants in Brampton and Windsor to help retool them to build electrified vehicles, while the Ontario government committed a further $513 million. The Brampton plant was idled in 2023, laying off about 3,000 workers, and about 1,800 remain on layoff. Stellantis said last year the Jeep Compass would instead be built at its idled plant in Belvidere, Illinois; in September it signed a memorandum of understanding to sell the Brampton plant to Roshel, and on November 9 it signed a formal asset purchase agreement, with the deal expected to close by the end of the year.

Carney called it a "betrayal"; Stellantis says it will repay

Prime Minister Mark Carney on Tuesday called the plan to sell the plant "a betrayal." Stellantis said this week it will voluntarily repay the money it received, without saying how much. Joly is set to hold a four-way meeting in Toronto on Thursday with Stellantis, the Unifor union and representatives of the Ontario government. Notably, Joly had promised nearly a year ago that the government would serve a default notice on Stellantis. Sources: Canadian Press, The Globe and Mail, Automotive News.