- Stellantis to close 4,000-acre test site in Arizona
- The company hopes to move testing to Toyota-owned testing grounds in Arizona
- Stellantis amid US cost-cutting campaign to help reverse big losses
After recently suffering huge losses in the US market, Stellantis is looking to cut costs and one of the items at risk is the automaker’s sprawling testing ground in Yucca, Arizona.
Citing three sources familiar with the matter, CNBC reported on October 18 that Stellantis has already decided to close the site ahead of a planned sale and in the future will use a Toyota test site in Arizona, which Toyota opened to other companies in 2021.
Stellantis confirmed to CNBC in a statement that the site will be closed and said the remaining staff, 41 of whom, will be relocated or receive severance packages.
The Yucca site was purchased by the Stellantis Chrysler brand in 2007 from Ford, for approximately US$35 million. It covers more than 4,000 acres and is where a lot of durability and NVH testing is done.
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Stellantis has been slowly reducing its U.S. staff since the company was formed in 2021 from the merger of Fiat Chrysler Automobiles and French group PSA. According to CNBC sources, the reductions came as Stellantis increased outsourcing of jobs to lower-cost countries like Brazil, India and Mexico. Some factory workers are also being laid off, including 1,100 who are currently being laid off at a plant in Warren, Michigan, where Stellantis was 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 discarded if they continue to underperform. His warning came after the company earlier this month reported a 48% year-on-year decline in net profit.
The decline was mainly due to falling sales in the US, where dealers are also angry about some of the strategies Tavares has been executing. Many of their complaints were listed in an open letter to Tavares issued in August by the Stellantis National Reseller Council. The letter included complaints about “reckless short-term decision-making” to ensure record profits in 2023, as well as the “rapid degradation” of Stellantis’ U.S. brands, which include Chrysler, Dodge, Jeep and Ram.
Tavares only has a little over a year to try to turn things around, as Stellantis announced in October that it will retire in early 2026 after your current contract expires. The company is already looking for a successor, who will likely be appointed at the end of 2025.