Stellantis might make a best-selling Ram pickup in Mexico

Stellantis (STLA) may be moving production of the Ram 1500 pickup truck to Mexico to lower costs — at the risk of further alienating union autoworkers.

The Wall Street Journal, citing people familiar with the matter, reported that the company behind brands such as Jeep and Chrysler is adding capacity at its factory complex in Saltillo, Mexico, to build the Ram 1500s. The Journal reported that two buildings about a third-of-a-mile long have been constructed in recent months; it’s unclear whether an electric or gas-powered Ram 1500 model would be made in Saltillo.

Stellantis already makes the Ram ProMaster vans and other vehicles in Mexico, including the Ram 2500 and 3500 pickups.

In a statement to Quartz on Wednesday, Stellantis said that “no other announcements have been made about” the Ram 1500, besides the company’s investment in a facility in Sterling Heights, Michigan. Some $235 million will be invested to support building the electric Ram 1500 REV and the Ram 1500 Ramcharger at that plant.

Any production move out of the country would likely inflame tensions between the automaker and the United Auto Workers (UAW), which represents 43,000 Stellantis autoworkers. The other Detroit Three automakers are expected to hike labor costs, which analysts have suggested may push companies to transfer production elsewhere.

Last fall, the UAW won contracts with Stellantis. But recently, several UAW locals have filed contract grievances over a reported plan to transfer production of the Dodge Durango to Ontario from Detroit; Stellantis has said it has no plans to move production elsewhere. The union has also alleged that Stellantis has failed to keep the promises it made in its 2023 contract. At least two UAW locals have authorized a strike.

Stellantis has fired back against the UAW with at least nine lawsuits against the organization and 23 local chapters and has denied the union’s claims. Last week, Stellantis said it was contesting a Denver-based local’s strike authorization vote and filed another two lawsuits against the UAW.

“Stellantis has declared war on the American working class,” UAW President Shawn Fain told members last month. “The company has decided to respond to our support by abandoning their workers, their dealers, their consumers, and the American taxpayer.”

Building vehicles in Mexico has become an attractive option for U.S. automakers, partially due to the North American Free Trade Agreement (NAFTA). Foreign automakers have taken advantage of Mexico’s other free trade deals to avoid export taxes and lower labor costs.

Several companies, including Tesla (TSLA) and China’s BYD (BYDDY), are looking to make cars in Mexico, although some plans have been put on ice until the U.S. election is settled.

Former President Donald Trump, the Republican nominee, has repeatedly touted the benefits of tariffs, promising to raise duties on foreign vehicles. Tuesday, he proposed a 2,000% tariff on such goods — which is likely hyperbole — as well as a 100% or 200% tariff. President Joe Biden has authorized tariffs of 100% on Chinese-made vehicles.