(This Feb. 20 story has been corrected to fix the date of new tariffs on Mexico and Canada from March 1 to March 4 in paragraph 5)

By Kalea Hall

DETROIT (Reuters) - - Stellantis is pausing work on its next-generation Jeep Compass compact SUV including retooling a plant in Canada designated to build the vehicle, the company said Thursday. 

The nearly four-decade-old assembly plant in Brampton, Ontario, was closed for retooling in 2024, and production was due to resume in 2025 with the new Compass, according to a company fact sheet dated June 2024. 

Production is now slated to start in the first quarter of 2026, a company spokesperson said on Thursday.

The small SUV was to be built on an architecture meant for electric vehicles, with flexibility for other powertrains, including hybrids. Automotive News previously reported the pause on Thursday.

The Trump administration has created uncertainty for automakers with the threat of 25% tariffs on parts and vehicles imported to the U.S. from Canada and Mexico as soon as March 4 and plans to reverse the Biden administration's campaign to transition away from fossil fuel-powered transportation. 

Unifor, the union representing Stellantis workers in Canada, said the news was "a matter of grave concern."

"The chaos and uncertainty plaguing the North American auto industry, which is under the constant threat of tariffs and a dismantling of (electric vehicle) regulations from the United States, are having real-time impacts on workers and corporate decisions," Unifor President Lana Payne said in a statement. 

Sam Fiorani, vice president at research firm AutoForecast Solutions, said the pause is more likely related to the automaker rethinking its priorities among gas and electrified vehicles.  

Stellantis said in a statement it is continuing "to reassess its product strategy in North America to ensure it is offering customers a range of vehicles with flexible powertrain options to best meet their needs." 

The automaker has been making strategic changes to recover from a difficult 2024 in which former CEO Carlos Tavares unexpectedly left after his aggressive pricing strategy contributed to plummeting vehicle sales in the U.S.

The automaker's new leadership is quickly reshaping its product plan. In December, Stellantis moved up the launch of a new hybrid version of the best-selling Ram pickup ahead of an all-electric version.