July 4, 2022

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Stellantis suspends car production in Russia

Stellantis suspends car production in Russia

  • The Kalugavan plant in Russia employs 2,700 people
  • The company will continue to pay salaries
  • Factory co-owner Mitsubishi has already halted operations

MILAN (Reuters) – Carmaker Stylantis (STLA.MI) On Tuesday, it said it would suspend production at its plant in Russia due to logistical difficulties and sanctions against Moscow.

The fourth largest automaker in the world, which produced and sold the Peugeot, Citroen, Opel, Jeep and Fiat brands in Russia, owns only 1% of the country’s car market.

It operates an auto plant in Kaluga, about 125 miles (201 kilometers) southeast of Moscow, that is jointly owned by Japanese automaker Mitsubishi. (7211.T)which halted production at the facility earlier this month. Read more

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“Due to the rapid daily increase in cross-sanctions and logistical difficulties, Stylantis has suspended its manufacturing operations in Kaluga to ensure full compliance with all cross-sanctions and the protection of its employees,” Stellantis said in a statement.

The plant employs 2,700 people.

Stylantis told Reuters the company would continue to pay salaries through a local disruption plan and using projected vacation periods.

The Stellantis logo appears on a company building in Velizy-Villacoublay near Paris, France, February 1, 2022. REUTERS/Gonzalo Fuentes

She said she did not know how long the halt would last, adding that her priority was her staff and the return of peace.

Stellantis had already halted all vehicle exports and imports with Russia, after Moscow’s invasion of Ukraine, and moved production to Western Europe. It also said it would freeze its plans for more investments in the country. Van production in Kaluga remained intended only for the domestic market. Read more

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Dozens of foreign companies have announced temporary closure of shops and factories in Russia or said they are leaving the country for good since Russia launched what it called a “special military operation” in Ukraine on Feb. 3. 24.

Stellants CEO Carlos Tavares said in late March that the group would have to close the Kaluga plant soon because it was running out of parts. Read more

Separately on Tuesday, General Motors (GM.N) It said it was extending the suspension of its business in Russia due to the conflict and international sanctions.

The US automaker, which initially suspended imports into Russia and commercial activity on February 3. 28, said it is laying off most of its 66 employees and providing them with severance packages. GM has no factories in Russia and only about 3,000 cars were sold annually there before the suspension. Read more

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Additional reporting by Ben Klayman in Washington. Editing by Mark Potter and Mark Porter

Our criteria: Thomson Reuters Trust Principles.