Carlos Tavares, chief govt officer of Stellantis NV, speaks to the media on the Stellantis auto manufacturing plant in Sochaux, France, on Thursday, Oct. 3, 2024.
Nathan Laine | Bloomberg | Getty Pictures
DETROIT — Automaker Stellantis plans to shutter and promote its massive car proving grounds in Arizona on the finish of this yr, CNBC has realized.
The choice is the most recent cost-cutting measure by the trans-Atlantic automaker underneath CEO Carlos Tavares, who has been more and more underneath stress from Wall Avenue, sellers and the United Auto Employees union amid the corporate’s lagging monetary efficiency, layoffs and total enterprise selections.
The Arizona Proving Grounds covers 4,000 acres between Phoenix and Las Vegas in Yucca, Arizona. It has been used for car testing and improvement for the automaker since then-Chrysler bought the property for $35 million from Ford Motor in 2007.
The closure was confirmed by three folks acquainted with the plans who agreed to talk on the situation of anonymity as a result of the issues are non-public.
Stellantis plans to make use of a proving grounds in Arizona owned by Toyota Motor starting subsequent yr, in keeping with two folks acquainted with the choice. Toyota opened its operations, that are pricey to keep up, for different corporations to make use of in 2021.
Stellantis Chrysler Arizona Proving Grounds
Supply: Google Earth
Stellantis confirmed the closure Friday morning, citing the corporate’s ongoing cost-cutting and actual property evaluations.
“Stellantis continues to search for alternatives to enhance effectivity and optimize its footprint to make sure future competitiveness in right now’s quickly altering world market,” the corporate stated in an emailed assertion.
The automaker additionally stated it’s “working with the UAW to supply proving floor staff particular packages or they will select to observe their work in a switch of operations” however that staff might be positioned on an “indefinite layoff, which might entitle them to pay and advantages for 2 years.”
Stellantis stated 41 staff at the moment work on the Arizona Proving Grounds, together with 37 hourly staff represented by a neighborhood chapter of the UAW.
The UAW, which has been more and more essential of Tavares and such layoffs, didn’t reply for touch upon the deliberate closure.
Stellantis, like most automakers, has a number of proving grounds in several climates and geographies to develop and check autos forward of promoting them to shoppers. Stellantis’ different main U.S. proving grounds facility is a 4,000-acre campus positioned west of Detroit in Chelsea, Michigan.
Stellantis’ advanced in Arizona was one in all 18 services the corporate notified the UAW it might doubtlessly shut throughout the union’s contract negotiations final yr with Stellantis.
A majority of the opposite operations have been elements and distribution facilities that have been anticipated to be consolidated into “mega websites,” in addition to the corporate’s large 500-acre campus in metro Detroit previously used as Chrysler’s world headquarters.
The standing of the opposite properties was not instantly clear, nonetheless, native and state politicians, together with Michigan Gov. Gretchen Whitmer, have expressed issues that Stellantis might transfer to shutter the previous headquarters in Auburn Hills, Michigan.
Stellantis has considerably lowered the variety of its U.S. staff in recent times amid Tavares’ cost-cutting measures.
Stellantis has lowered worker head rely by 15.5%, or roughly 47,500 staff, between December 2019 and the top of 2023, together with a 14.5% discount in North America, in keeping with public filings. That does not embrace additional head rely reductions and layoffs this yr.
The automaker had solely about 11,000 U.S. salaried staff on the finish of final yr. That in contrast with 53,000 at Normal Motors and 28,000 at Ford.
The reductions have occurred as Stellantis has tried to outsource many engineering efforts to lower-cost international locations similar to Brazil, India and Mexico, in keeping with a number of folks acquainted with the strikes.
Bloomberg Information earlier this yr reported that Stellantis moved to recruiting a majority of its engineering workforce in these international locations, the place the associated fee per worker quantities to roughly €50,000 ($53,000) or much less per yr — far lower than comparable positions within the U.S. and Europe.
