Carlos Tavares, chief government 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 automobile proving grounds in Arizona on the finish of this yr, CNBC has realized.
The choice is the newest cost-cutting measure by the trans-Atlantic automaker beneath CEO Carlos Tavares, who has been more and more beneath stress from Wall Road, 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 automobile testing and improvement for the automaker since then-Chrysler bought the property for $35 million from Ford Motor in 2007.
As of July 2019, the operations employed 69 folks, together with employees represented by a neighborhood chapter of the UAW, in accordance with the automaker.
The closure was confirmed by three folks accustomed to 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 accordance with two folks accustomed to the choice. Toyota opened its operations, that are pricey to take care of, for different corporations to make use of in 2021.
Stellantis confirmed the closure Friday morning, citing the corporate’s ongoing cost-cutting and actual property evaluations.
“Stellantis continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global market,” the corporate mentioned in an emailed assertion.
The automaker additionally mentioned it’s “working with the UAW to offer proving ground employees special packages or they can choose to follow their work in a transfer of operations” however that staff may very well be positioned on an “indefinite layoff, which would entitle them to pay and benefits for two years.”
Stellantis, like most automakers, has a number of proving grounds in several climates and geographies to develop and check automobiles forward of promoting them to customers. Stellantis’ different main U.S. proving grounds facility is a 4,000-acre campus situated west of Detroit in Chelsea, Michigan.
Stellantis’ complicated in Arizona was one in every of 18 services the firm notified the UAW it may doubtlessly shut through the union’s contract negotiations final yr with Stellantis.
A majority of the opposite operations had been components and distribution facilities that had been anticipated to be consolidated into “mega sites,” in addition to the corporate’s huge 500-acre campus in metro Detroit previously used as Chrysler’s world headquarters.
The standing of the opposite properties was not instantly clear, nevertheless, native and state politicians, together with Michigan Gov. Gretchen Whitmer, have expressed considerations that Stellantis may transfer to shutter the previous headquarters in Auburn Hills, Michigan.
Stellantis has considerably diminished the variety of its U.S. staff lately amid Tavares’ cost-cutting measures.
Stellantis has diminished 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 accordance 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 Common Motors and 28,000 at Ford.
The reductions have occurred as Stellantis has tried to outsource many engineering efforts to lower-cost nations equivalent to Brazil, India and Mexico, in accordance with a number of folks accustomed to the strikes.
Bloomberg Information earlier this yr reported that Stellantis moved to recruiting a majority of its engineering workforce in these nations, the place the associated fee per worker quantities to roughly €50,000 ($53,000) or much less per yr — far lower than related positions within the U.S. and Europe.
