DETROIT – Automaker Stellar The company plans to shut and sell its large vehicle testing site in Arizona at the tip of this 12 months, CNBC has learned.
The decision is the newest cost-cutting move by the transatlantic automaker under CEO Carlos Tavares, who’s under increasing pressure from Wall Street, dealers and the United Auto Workers union amid the corporate's declining financial performance, layoffs and general business decisions.
The Arizona Proving Grounds spans 4,000 acres between Phoenix and Las Vegas in Yucca, Arizona. Since then, it has been used for vehicle testing and development for the automaker – Chrysler bought the property for $35 million from Ford engine in 2007.
The closure was confirmed by three people accustomed to the plans, who agreed to talk on condition of anonymity since the matter is private.
Stellantis plans to make use of a testing site in Arizona owned by Toyota engine Implementation will begin next 12 months, in accordance with two people accustomed to the choice. Toyota opened its expensive operations to other firms Use in 2021.
Stellantis confirmed the closure Friday morning, citing the corporate's ongoing cost reductions and real estate valuations.
“Stellantis continues to seek opportunities to increase efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global marketplace,” the corporate said in an emailed statement.
The automaker also said that it’s “working with the UAW to offer special packages to the proving ground employees, or they may elect to continue their work as part of an operational shift,” but that the workers “could be laid off indefinitely, whichever is the case.” “They would be entitled to pay and benefits for two years.”
Stellantis said there are currently 41 employees working on the Arizona Proving Grounds, including 37 hourly staff represented by a neighborhood chapter of the UAW.
The UAW, which has change into increasingly critical of Tavares and such layoffs, didn’t reply to a request for comment on the planned closure.
Stellantis, like most automakers, has multiple test sites in several climates and regions to develop and test vehicles before selling them to consumers. Stellantis' other major U.S. test site is a 4,000-acre campus west of Detroit in Chelsea, Michigan.
The Stellantis complex in Arizona was one among 18 facilities The company notified the UAW It could potentially close in the course of the union's contract negotiations with Stellantis last 12 months.
Much of the opposite operations were parts and distribution centers that might be consolidated into “mega-sites,” in addition to the corporate's massive 500-acre Detroit-area campus, which formerly served as Chrysler's world headquarters.
However, the status of the opposite properties was not immediately clear, including local and state politicians Michigan Governor Gretchen Whitmerhave expressed concerns that Stellantis could close its former headquarters in Auburn Hills, Michigan.
Stellantis has significantly reduced the variety of its U.S. employees lately as a part of Tavares' cost-cutting measures.
According to public filings, Stellantis reduced headcount by 15.5%, or roughly 47,500 employees, between December 2019 and the tip of 2023, including a 14.5% reduction in North America. This doesn’t include further staff reductions and layoffs this 12 months.
The automaker only had about 11,000 U.S. employees at the tip of last 12 months. In comparison there have been 53,000 General Motors and 28,000 at Ford.
The cuts got here as Stellantis has sought to outsource much of its engineering work to lower-cost countries comparable to Brazil, India and Mexico, in accordance with several people accustomed to the moves.
Bloomberg News Stellantis reported earlier this 12 months has moved to recruiting much of its engineering workforce in countries where the associated fee per worker is about €50,000 ($53,000) or less per 12 months – far lower than similar positions within the U.S. and Europe.
image credit : www.cnbc.com