Amid trade war, automaker Stellantis explores U.S. supply chain growth

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After reporting a 14-per-cent dip in first-quarter earnings, automaker Stellantis confirmed to analysts on Wednesday it was exploring production and supply chain movement to reduce tariff costs.

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The company, which has Canadian assembly plants in Windsor and Brampton, also announced it will postpone any financial forecasts for the remainder of the year due to the uncertainty created by U.S. President Donald Trump’s tariff policies.

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“As the situation evolves, we’ll need to calibrate our North American investments, footprint and employment to ensure the profitability of our company,” chief financial officer Doug Ostermann said in a call to analysts.

He didn’t elaborate on the timelines needed to move production or supply chains to the U.S.

The global automaker reported revenues down 14 per cent to $55.2 billion in the first quarter of 2025. In scrapping its financial forecasts, Stellantis joins Mercedes and General Motors in noting tariff uncertainty makes it impossible to predict with any certainty what the rest of the year will bring.

Stellantis had suspended its European product imports as it continues trying to navigate through the 25 per cent tariff Trump has imposed on all imported vehicles to the U.S., but the company said it had resumed those imports this week.

“The tariff policies are evolving,” Osterman said.

“It’s a good sign, right? Because we have a regular dialogue with the (Trump) administration and they are modeling the tariff policies in ways, particularly the announcement that we heard (Tuesday), that are very beneficial to our transition.”

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Windsor Assembly Plant, which employs thousands of autoworkers, produces the Pacifica, Grand Caravan and Voyager minivan lineup and multiple models of the new Dodge Charger. Brampton is currently being retooled, but that operation has been paused as the company studies the tariff scenarios and market demand.

Stellantis also has extensive relationships with Canadian Tier I automotive parts suppliers such as Magna and Linamar, but also with numerous Tier IIs and IIIs in the Windsor region and southwestern Ontario.

The company is trying to bump its American parts content up about five per cent to 85 per cent in its U.S.-finished vehicles to qualify for a tariff reduction.

However, Trump’s tariffs were only a portion of the problems facing Stellantis in the first quarter.

Along with revenues, vehicle shipments also declined nine per cent (to 1.27 million units) and inventory levels remained stubbornly high.

North American revenue fell 25 per cent, to $22.5 billion, on the shipment of 325,000 vehicles. Shipments in the quarter were down 20 per cent compared to a year ago.

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European revenues declined three per cent while shipments dipped by eight per cent.

“North America is at a very early stage, with improvement in retail order intake, while we are seeing sequential improvement in EU30 (Europe) market share,” Ostermann said.

“At the same time, the company is benefiting from its diverse geographic footprint, as our ‘Third Engine’ regions delivered in Q1 2025 positive year-on-year growth in aggregate.”

South American revenue rose 19 per cent and shipments jumped six per cent.

Stellantis, which reports earnings for Asia, Africa and the Middle East every six months, blamed its declines on lower volumes, adverse regional mixes of products and price normalization.

Dwaddell@postmedia.com

Twitter.com/winstarwaddell

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