Fitch Cuts Stellantis as Automaker Pauses Some Factory Work

Stellantis NV was downgraded to two steps away from junk by Fitch Ratings, becoming the first major automaker to experience a ratings hit in the wake of President Donald Trump’s sweeping tariffs announcement.

Author of the article:

Bloomberg News

Ethan M Steinberg

Published Apr 03, 2025  •  1 minute read

The Stellantis Windsor Assembly Plant in Windsor, Ontario, Canada, on Tuesday, Feb. 4, 2025. US President Donald Trump's proposed tariffs against Canada and Mexico would threaten production at automakers across North America and send record vehicle prices even higher, with about a quarter of a trillion dollars in trade that would be disrupted. Photo by Emily Elconin /Bloomberg

(Bloomberg) — Stellantis NV was downgraded to two steps away from junk by Fitch Ratings, becoming the first major automaker to experience a ratings hit in the wake of President Donald Trump’s sweeping tariffs announcement.

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The owner of car brands including Chrysler, Fiat and Jeep had its long-term issuer default rating lowered one notch to BBB by Fitch. The bond grader cited elevated cost pressures tied to newly imposed tariffs on the automotive sector.

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“The effect of the tariffs is hard to quantify as USMCA-(United States-Mexico-Canada-Agreement) compliant companies should find exemptions and pass on modest price increases to customers,” the ratings firm said in a statement. “However, Stellantis has exhausted its rating headroom to absorb related short-term shocks and a potential decline in production volumes.”

Earlier on Thursday, the automaker said it was pausing work at some factories in Canada and Mexico as the 25% tariffs on imported cars goes into effect. About 900 workers, including some from facilities in the US, will be temporarily laid off. Shares of the automaker fell more than 8% Thursday.

Fitch said is expects the import duties to hurt Stellantis’ US production and sales, as the price of raw materials rises alongside cost pressures from suppliers. The company manufactures about 40% of the cars it sells in the US outside the country, Fitch said, making it one of the most vulnerable automakers to a profit squeeze from the new trade policies.

The company could shift more of its production to the US by tapping currently idle facilities, but doing so would demand more upfront spending and could take close to two years, Fitch said. 

The ratings change follows an identical one from S&P Global in early March. Moody’s Ratings has the firm at Baa1, the equivalent of a step above Fitch and S&P. Fitch had about €25 billion, or $27.6 billion, of long-term debt outstanding as of the end of December.

(Updates with details from Fitch statement and on worker layoffs and debt outstanding.)

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