(Bloomberg) — Stellantis NV has signed a memorandum with a Canadian armored vehicle manufacturer that outlines steps toward the sale of an idled car factory near Toronto — a move that represents yet another ripple effect of US tariffs on the Canadian auto sector.
Roshel Inc., which is headquartered near the Stellantis plant in Brampton, Ontario, is trying to get a Canadian military contract worth as much as C$4.9 billion ($3.5 billion) to build light utility vehicles. The company has told Prime Minister Mark Carney’s government it could reactivate the facility quickly if it lands that contract.
Roshel Chief Executive Officer Roman Shimonov said his company is the only serious potential buyer for the facility, and described the memorandum as the first step in a “very complicated” process.
“It’s a document that clearly specifies the plan, the responsibilities, the framework and everything else,” Shimonov said in an interview. “We have a clear plan and this MOU is outlining the whole process.”
LouAnn Gosselin, a Stellantis spokesperson, confirmed the two companies have signed the document.
“Following consideration of a number of potential opportunities, Stellantis believes that Roshel represents a strong path to restoring sustainable operations at Brampton Assembly, preserving the site’s strategic role in Canada’s advanced manufacturing sector and helping to avoid a prolonged period of inactivity,” Gosselin said in a statement.
The Stellantis plant employed about 3,000 unionized workers when it was making vehicles, but it hasn’t been in production since late 2023. A plan to build the Jeep Compass SUV there was scrapped last year after US President Donald Trump announced plans to impose tariffs on foreign-made vehicles.
The canceled production sparked a furious reaction from the Canadian government, which had given hundreds of millions of dollars in financial help to Stellantis. The automaker is currently at the bargaining table with Unifor, which represents the plant’s workers.
Unifor said last month it’s been informed Stellantis may close and sell the plant. The mayor of Brampton, Patrick Brown, told Bloomberg News recently that his office has received a number of inquiries about the plant, including one from China’s BYD Co.
Gosselin said Stellantis has a 100-year history of operations in Canada and remains “committed to supporting Canadian jobs, innovation and the long-term competitiveness of the country’s automotive sector.”
The company won’t comment further due to the ongoing bargaining with Unifor, she said. The union did not respond to a request for comment for this story.
Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said he wishes Roshel the best as a company but does not support the plant being sold to them. The scale of a Stellantis vehicle production line pales in comparison to what Roshel can do, he said.
“That plant is the nerve center of 60 years or so of volume automotive manufacturing,” he said in an interview. “That means 500 to 1,000 vehicles a day. That means 3,000 people in the plant, and 9,000 to 12,000 people outside the plant in suppliers and supporting services.”
He said Stellantis still has unassigned production lines for its future vehicle plans, and it can still eventually use the plant again.
“I really think we need Roshel in this country, and we need a lot of Roshels, but we don’t need Roshel in Brampton at that plant,” Volpe said.
Roshel’s pitch is that it would still work with partners in the automotive sector to bring new vehicle business to the plant, alongside its own plans to build armored vehicles there and attract other defense work.
“This proposal is not about creating a substitution to an automotive plant, but rather adding defense on top of the automotive production capabilities,” Shimonov said.
Still, the military contract Roshel is bidding for is a crucial part of its pitch to the government. Roshel has outlined a series of partnerships with other Canadian firms, including the Algoma Steel Inc. mill in Sault Ste. Marie, Ontario, that would feed into the plant’s production of armored vehicles.
Last year Roshel partnered with Swedish steel producer Swebor Stal Svenska AB to establish Canada’s first facility entirely dedicated to producing ballistic-grade steel.
Shimonov said if Roshel gets this contract, it could quickly bring back about 1,000 workers at the Brampton plant.
He said it’s also shown Industry Minister Melanie Joly’s office a study that estimates the Roshel bid would support an average of 4,530 direct and indirect jobs annually for the three years of vehicle construction, and a further 574 jobs annually in support services over 15 years.
Joly’s office did not respond to a request for comment.
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