Carlos Tavares, CEO of Stellantis NV, spoke to the media on Thursday, October 3, 2024, at the Stellantis car manufacturing plant in Sochaux, France.
Nathan Lane | Bloomberg | Getty Images
Detroit — car manufacturer Stellantis plans to close and sell its large vehicle proving ground in Arizona at the end of this year, CNBC has learned.
The decision is the latest cost-cutting move by the transatlantic automaker, led by CEO Carlos Tavares, amid the company’s weak financial performance, job cuts and overall management decisions. There is increasing pressure from the city, dealers and the United Auto Workers union.
The Arizona Proving Ground is located on 4,000 acres between Phoenix and Las Vegas in Yucca, Arizona. The land was purchased by then-Chrysler for $35 million and has since been used for vehicle testing and development by the automaker. ford motor In 2007.
Three people familiar with the plan confirmed the closure and agreed to speak on condition of anonymity because the details are private.
Stellantis plans to use an automotive proving ground in Arizona. toyota motors The move will begin next year, according to two people familiar with the decision. Toyota opened up its expensive-to-maintain business to other companies in 2021.
Stellantis Chrysler Arizona Proving Ground
Source: Google Earth
Stellantis confirmed the closure Friday morning, citing the company’s continued cost-cutting efforts and real estate evaluations.
“Stellantis continues to explore opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global market,” the company said in an email. said in a statement.
The company also said it was “working with the UAW to provide special packages for test site employees, or they may choose to take over and transfer operations,” but that employees “will not be offered an indefinite period of time.” They will be furloughed and will be entitled to wages in that case.” A benefit will be given for 2 years. ”
Stellantis said there are currently 41 employees working at the Arizona Proving Grounds, including 37 hourly workers represented by local chapters of the UAW.
Mr. Tavares and the UAW, which has been increasingly critical of such cuts, did not respond to requests for comment on the planned closures.
Stellantis, like most automakers, has several proving grounds in different climates and regions to develop and test vehicles before selling them to consumers. Stellantis’ other major test site facility in the United States is a 4,000-acre campus in Chelsea, Michigan, west of Detroit.
Stellantis’ complex in Arizona was one of 18 facilities the company notified the UAW of possible closure during union contract negotiations with Stellantis last year.
Most of the other operations were parts and distribution centers that would be integrated into “megasites,” similar to the company’s massive 500-acre campus in metro Detroit that once served as Chrysler’s world headquarters. .
The status of other facilities was not immediately clear, but local and state politicians, including Michigan Governor Gretchen Whitmer, could move to close Stellantis’ former headquarters in Auburn Hills, Michigan. They have expressed concern that this may be the case.
Stellantis has significantly reduced its U.S. workforce in recent years as part of Mr. Tavares’ cost-cutting efforts.
Stellantis will reduce its workforce by 15.5%, or about 47,500 people, from December 2019 to the end of 2023, including a 14.5% reduction in North America, according to public documents. This does not include any further layoffs or layoffs this year.
At the end of last year, the company had only about 11,000 salaried employees in the United States. compared to 53,000 at the time. general motors and 28,000 at Ford.
The cuts come as Stellantis seeks to outsource much of its engineering work to low-cost countries such as Brazil, India and Mexico, people familiar with the move said.
Bloomberg News reported earlier this year that Stellantis has moved to hire the majority of its engineering workforce in these countries, where costs per employee are around 50,000 euros (50,000 euros) per year. 3,000), much lower than similar positions in the US and Europe.
