OTTAWA--The union representing more than 9,000 Stellantis employees said Thursday it could be in a strike position in the coming weeks unless the carmaker changes course on its plan to sell a Toronto-area factory to a defense firm.

Unifor president Lana Payne said union officials are weighing their next steps, as the current labor deal with Stellantis expires on Sept. 20. She said at a press conference in Toronto that Unifor's goal is to reach a tentative settlement with Stellantis without a strike. "However, bargaining remains extremely challenging right now, and we are at an impasse. Therefore, strike action remains a real possibility," she said.

Under labor laws in the Canadian province of Ontario, the union would have to a vote among its members to pursue a strike mandate.

Unifor declared an impasse after Stellantis confirmed it is in advanced talks with Canadian armored carmaker Roshel about the sale of its auto-assembly plant in Brampton, Ontario. The Brampton factory has been idle since 2024, when Stellantis began retooling to produce its Jeep Compass model. That plan was set aside last year, when Stellantis - under strain from U.S. tariffs on foreign-made cars - said it was transferring production to a plant in Illinois.

Payne said the Brampton factory would represents an important moment for Canada, because it will underscore whether business leaders, workers and government officials are willing to save the country's auto sector. Automobiles made in Canada face a 25% U.S. tariff, and President Trump has threatened a heftier 50% duty on vehicles and auto parts on Jan. 1 unless Washington and Ottawa come to a satisfactory trade deal.

Talks between the U.S. and Canada broke off last month, in part because the Trump administration were intent on undermining the domestic auto sector, Prime Minister Mark Carney has said.

In a letter sent this week to its employees in Brampton, the chief executive of Stellantis's Canadian unit said the business case for producing the Jeep Compass is no longer valid, citing U.S. trade policy and market conditions. Trevor Longely said Stellantis evaluated options to return automotive production to Brampton, but "none provided a sustainable long-term business case that would support continued operations at the facility."

Longely said Stellantis is exploring a sale to Roshel, but no deal has been finalized. The transaction, however, "could support future operations at the site."

Roshel has said it is willing to make job commitments to affected Stellantis employees in the event a transaction is finalized. Payne said the sale to a defense firm is a nonstarter.

Defense firms "exist by government procurement. It is and cannot compare to a commercial enterprise building vehicles, hundreds of thousands of them, into the market," she said.

Payne on Wednesday sent a letter to Canadian Industry Minister Melanie Joly calling on her to block any Stellantis-Roshel deal, and demanding to know what her government would do to save auto production. Payne said she has yet to receive a response.

In a statement late Wednesday, a spokesman for the industry ministry said officials are in discussions with Stellantis and Unifor about the future of the Brampton factory, and are ready to take measures to protect workers and secure manufacturing work at the plant. Joly had previously threatened to sue Stellantis to recover taxpayer-backed financing provided to the automaker for factory retooling.