Stellantis halts vehicle production in Russia

Stellantis (STLA.MI) announced that production at its Russian plant would be halted owing to logistical issues and sanctions placed on Moscow.

In Russia, the world’s fourth-largest carmaker, which produces and sells the Peugeot, Citroen, Opel, Jeep, and Fiat brands, has only 1% of the market.

It co-owns a van-making plant in Kaluga, some 125 miles (201 kilometres) southeast of Moscow, with Japanese automaker Mitsubishi (7211.T), which shut down operations earlier this month.

“Given the rapid daily increase in cross sanctions and logistical problems,” Stellantis said in a statement, “Stellantis has paused its production operations in Kaluga to ensure full compliance with all cross sanctions and to protect its employees.”

The plant has a workforce of 2,700 workers.

Stellantis told media that the company will continue to pay salaries using a local downtime programme and scheduled vacation periods.

It said it didn’t know how long the strike would run and that its primary priority was the safety of its employees and the restoration of peace.

Following Moscow’s invasion of Ukraine, Stellantis had already halted all vehicle exports and imports to Russia, shifting manufacture to Western Europe. It also announced that it was halting plans for more investments in the country. Kaluga’s van manufacture had been limited to the local market.

Since Russia began what it calls “a special military operation” in Ukraine on February 24, a slew of multinational corporations have announced temporary retail and factory closures or stated they are leaving the country permanently.

In late March, Stellantis Chief Executive Carlos Tavares announced the company will have to close the Kaluga plant due to a shortage of parts.

Separately, General Motors Co (GM.N) announced on Tuesday that it was extending its commercial halt in Russia due to the crisis and international sanctions.

The American manufacturer announced it was cutting off the majority of its 66 employees and provided them with separation packages after suspending imports and commercial activities in Russia on Feb. 28. Prior to the suspension, GM did not have any plants in Russia and only sold roughly 3,000 automobiles there each year.

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