Stellantis Ready To Make Big Changes To Dodge Tariffs On Pickups

Stellantis is the latest automaker to provide details on potential shifts in its production aimed at reducing the impact of the Trump administration’s tariffs on vehicles and related parts.

Stellantis Chief Financial Officer Doug Ostermann, in a conference call with analysts held on April 30, said the automaker may move production of some pickup trucks from a plant in Mexico to the U.S. Specific models weren’t mentioned, but Stellantis currently builds the Ram 1500 light-duty truck in Mexico. It also builds heavy-duty Rams in Mexico, such as the 2500 and 3500.

Suppliers May Also Be Affected

It’s not just the Mexican plant that may be affected. Stellantis may need to shake up current parts supply deals with plants located in Canada, Mexico, the U.S., and abroad in order to increase the U.S. content in its vehicles, Ostermann said.

“As the [tariffs] situation evolves, we’ll need to calibrate our North American investments, footprint, and employment to ensure the profitability of our company.”

– Doug Ostermann, Stellantis Chief Financial Officer

His comments came a day after the Trump administration announced changes to the tariffs program that could provide automakers with credits for up to 15% of the value of vehicles built in the U.S., based on how much of their parts fall under the previous USMCA free-trade agreement between Canada, Mexico, and the U.S. These rebates, which would only last for two years, could then be used to offset tariffs on vehicles and parts that are imported.

Ostermann said Stellantis’ U.S.-made vehicles could become tariff-free in the first year if it manages to increase the USMCA content from the current 80% to 85%.

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The Globe and Mail reported on April 30 that Ford CEO Jim Farley told journalists the tariff changes were a positive step, but that more assistance was still needed.

Work Already Paused At Some Stellantis Plants

Due to the uncertainty, Stellantis in April paused production at some Mexican plants and at the Canadian plant building Chrysler minivans and the Dodge Charger. Stellantis has also halted work at another Canadian facility that was being prepared for the production of the next-generation Jeep Compass.

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Nissan is another automaker that may shift production to the U.S. The company is expected to move some production of its top-selling Rogue compact crossover from Japan to the U.S., and may also begin producing a new electric SUV at a U.S. plant.

Source: The Global and Mail