According to what CNBC has learned, Stellanatis is continuing to cut costs as it implements a major reorganization. The latest change comes in the form of the closure of its testing center, located in Arizona. The choice will certainly have a very significant impact on the area, as well as on its economy, employment and local community. Apparently then, it appears that the group remains focused on maximizing short-term profit, just as the UAW claims.
Closure of the Arizona test center
The Stellantis test center in Arizona covers a very large area that has been able to accommodate all testing and development activities for more than a decade. Now, this site will be replaced as a result of an agreement made with the Toyota brand, which will provide its own test center. Although the choice is certainly very difficult for the workers who were part of it, it is still seen as something necessary for Stellantis and its competitiveness within the global market. Now then, this closure will surely cause a situation that is not at all pleasant for the workers, who will soon face layoffs and transfers. The company has also announced that support packages will be made available in this regard for those affected, but there still remains great uncertainty for the future.
The Stellantis automaker, led by Carlos Tavares, has therefore decided to close and sell its vast test center located in Arizona. This move is in addition to the many others put in place by the company to succeed in cutting costs. The decision also came as a result of the strong pressures that Wall Street is exerting, as well as those coming from all the dealers and especially the unions, such as UAW. At this time, Stellantis is still trying to optimize its financial resources, so costs continue to be cut through drastic actions.
Stellantis decreases staff over the years
The decision made by Stellantis to close its Arizona test center is obviously set in a context that is not about a single cost-cutting event that has been characterizing the company for the past few years. In fact, Stellantis has already made personnel cuts for thousands of people in the United States, moving its operations to some countries where production costs are significantly lower. In detail, we can say that the automotive group has reduced the number of employees by 15.5, which amounts to about 47,500 employees, in the period from December 2019 until the end of last year, 2023. Also included is a 14.% reduction in North America, according to what has been extrapolated from public data. But this, unfortunately, does not rule out the possibility that Stellantis may continue layoffs this year.
The issue of Stellantis’ declining stock has caused great concern among labor unions, who fear the worst for thousands and thousands of workers. Also of concern are local and state politicians, who are witnessing a steep decline in employment, something that seriously threatens the overall economy. The coming weeks will surely give us more clarity on what will be the fate of so many other Stellantis employees, who now have no certainty.