- Stellantis to close 4,000-acre Arizona proving grounds
- Company expected to move testing to Toyota-owned proving grounds in Arizona
- Stellantis in midst of U.S. cost-cutting drive to help turn around major losses
After recently suffering huge losses in the U.S. market, Stellantis is looking to cut costs and one of the items on the chopping block is the automaker's sprawling proving grounds in Yucca, Arizona.
Citing three sources familiar with the matter, CNBC reported on Oct. 18 that Stellantis has already decided to close the site ahead of a planned sale, and in the future will use a Toyota proving grounds in Arizona which Toyota opened up to other companies in 2021.
Stellantis confirmed to CNBC in a statement that the site will be closed, and said remaining staff, of which there are 41, will be relocated or offered severance packages.
The Yucca site was purchased by Stellantis brand Chrysler in 2007 from Ford, for approximately $35 million. It covers more than 4,000 acres and is where a lot of durability and NVH testing is done.
Stellantis brands
Stellantis has been slowly reducing its U.S. staff since the company was formed in 2021 from the merger of Fiat Chrysler Automobiles and France's PSA Group. According to CNBC's sources, the reductions have occurred as Stellantis increased outsourcing of jobs to lower-cost countries like Brazil, India, and Mexico. Some factory workers are also getting laid off, including 1,100 that are currently being let go at a plant in Warren, Michigan, where Stellantis had been building the Ram 1500 Classic. The plant will continue to build Jeep's Wagoneer and Grand Wagoneer.
CEO Carlos Tavares also warned in July that some of Stellantis' 14 brands could be dropped if they continue to underperform. His warning came after the company reported earlier in the month a decline of 48% in net profits year-over-year.
The decline was mostly due to falling sales in the U.S., where dealers are also angered by some of the strategies Tavares has been executing. Many of their grievances were listed in an open letter to Tavares issued in August by the Stellantis National Dealer Council. The letter included complaints about "reckless short-term decision-making” to secure record profits in 2023, plus the “rapid degradation” of Stellantis' U.S. brands, which include Chrysler, Dodge, Jeep, and Ram.
Tavares only has a little more than a year to try and turn things around as Stellantis in October announced he will retire in early 2026 after his current contract expires. The company is already looking for a successor, one that will likely be named in late 2025.
