Stellantis to shutter and sell large testing facility amid cost-cutting efforts

DETROIT — Automaker Stellantis plans to shutter and sell its large vehicle proving grounds in Arizona at the end of this year, CNBC has learned.

The decision is the latest cost-cutting measure by the trans-Atlantic automaker under CEO Carlos Tavares, who has been increasingly under pressure from Wall Street, dealers and the United Auto Workers union amid the company's lagging financial performance, layoffs and overall business decisions.

The Arizona Proving Grounds covers 4,000 acres between Phoenix and Las Vegas in Yucca, Arizona. It has been used for vehicle testing and development for the automaker since then-Chrysler purchased the property for $35 million from Ford Motor in 2007.

The closure was confirmed by three people familiar with the plans who agreed to speak on the condition of anonymity because the matters are private.

Stellantis plans to use a proving grounds in Arizona owned by Toyota Motor beginning next year, according to two people familiar with the decision. Toyota opened its operations, which are costly to maintain, for other companies to use in 2021.

Stellantis confirmed the closure Friday morning, citing the company's ongoing cost-cutting and real estate evaluations.

"Stellantis continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today's rapidly changing global market," the company said in an emailed statement.

The automaker also said it is "working with the UAW to offer proving ground employees special packages or they can choose to follow their work in a transfer of operations" but that employees could be placed on an "indefinite layoff, which would entitle them to pay and benefits for two years."

Stellantis said 41 employees currently