Stellantis to close Arizona Proving Grounds and sell the property

October 19

Stellantis will close its Arizona Proving Grounds this year as it works to sell the property.

It was one of numerous facilities, including the Auburn Hills headquarters and technology center, that the automaker, which has been facing numerous challenges related to sales and financial guidance in recent weeks, had negotiated during last year’s contract talks with the UAW for the ability to unload.

The company, which will maintain its proving grounds in Chelsea, Michigan, confirmed its plans for the 4,000-acre property in western Arizona on Friday.

“Stellantis continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global market. As agreed to during 2023 UAW negotiations, the company is continuing to market the Arizona Proving Grounds for sale and therefore, will cease use of the facility by the end of the year,” according to a statement provided by spokeswoman Jodi Tinson.

The upcoming closure, reported earlier by CNBC, will affect 37 employees, Tinson said.

More: Stellantis reports 20% drop in global vehicle shipments as automaker faces scrutiny

“The company 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. Alternatively, employees could be placed on indefinite layoff which would entitle them to pay and benefits for two years,” the statement said.

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Stellantis plans to sell its Arizona Proving Grounds.

The year-round facility was purchased in 2007, according to the company, and includes 70 lane miles of road surface and an 18-acre “vehicle dynamics area.” It provides durability testing for high temperatures and dust and other functions.

The UAW, which has been highly critical of CEO Carlos Tavares and is in a fight with the automaker over the possibility of a national strike, was asked for comment Friday.

What about the Auburn Hills complex?

Recently, speculation has ramped up over the fate of the company’s 5.4-million-square-foot Auburn Hills complex, with Gov. Gretchen Whitmer saying earlier this month she was in discussions with the automaker about its Michigan footprint, without providing specifics.

This week, the Michigan Economic Development Corp. responded to questions about whether Stellantis had asked for or been offered any incentives related to the Auburn Hills complex or other Michigan operations.

More: Fain letter urges UAW Stellantis members to be ready to OK strike

Spokesman Otie McKinley said in an email that “Stellantis has a longstanding history in Michigan as a significant employer, and as such, the MEDC is in regular communication with the company about how Michigan can be a core location for them for generations to come.”

Story continues

Asked how the state would assist if Stellantis chooses to downsize or leave Auburn Hills, McKinley wrote that “if an unanticipated decision were to occur, collectively, Team Michigan would work to ensure that any adverse economic impact would be minimized and that innovation continues to occur, leaning into our Make It in Michigan economic development strategy.”

The Free Press reported in 2022 that the company was weighing its real estate portfolio in light of changes to work culture brought on by the pandemic, including the possibility of leasing out a portion of the Auburn Hills property. At that time, the company said the complex would continue to be its North American headquarters.

On Friday, Tinson referred a reporter to a prior statement when asked about the Auburn Hills complex:

“As part of our company’s evolution to a more flexible work environment, we continue to evaluate how we work to enable our teams to be their most innovative, creative and efficient. That analysis has included potential adjustments to our real estate portfolio. That said, Stellantis has made its home in Michigan for more than 100 years and we expect the Auburn Hills complex will continue to play a critical role in the company’s global operations.”

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This article originally appeared on Detroit Free Press: Stellantis closing Arizona Proving Grounds

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