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Vroom hits brakes on ambitious plans for central Indiana

March 6, 2018

Online car retailer Vroom Inc., which announced intentions to hire more than 200 workers in central Indiana less than three years ago, has abandoned those plans.

The company has closed its 501,120-square-foot fulfillment center in Whitestown after opening the facility in December 2015.

New York City-based Vroom, founded in 2013, buys and sells cars directly to and from consumers via its website.

In September 2015, Vroom announced it would spend $13.5 million to lease and equip the massive, vacant Subaru of America building off Indianapolis Road, west of Interstate 65, for use as a reconditioning and fulfillment center—a place where workers would refurbish up to 2,500 cars at a time to ready them for resale. 

At the time, Vroom said it expected to hire 75 Whitestown employees by the end of 2015 and expand its local workforce to 220 by the end of 2020. The jobs were expected to pay a healthy average wage of $34 an hour.

The company negotiated state and local economic development agreements that could have saved it millions of dollars, but it hasn't collected on those deals.

Molly Whitehead, executive director of the Boone County Economic Development Corp., said a Vroom representative contacted her a few weeks ago to notify her they had closed the Whitestown facility.

“They acknowledged they were focusing their operations elsewhere for the time being,” Whitehead told IBJ. 

During that exchange, Whitehead said, the company left open the possibility of restarting local operations—but it did not offer specifics. “It was very general and vague. They didn’t have a timeline in place for if or when anything could happen in the future.”

Whitehead said she was unsure how many employees worked at Vroom at the time of the closure, adding that hiring expectations at the site were slower than expected.

The tech industry news site TechCrunch reported Monday that Vroom had eliminated up to half of its staff, a move that included the closures of facilities in Whitestown and in Dallas. 

According to TechCrunch story, Vroom confirmed it had had layoffs, but did not specify how many people were laid off, where they worked or how many employees the company has overall. 

In response to questions, a Vroom spokeswoman emailed IBJ a statement:

"We are always looking to align our resources to fulfill our long-term vision and deliver on our mission. In sharpening our focus on profitability, we recently made some adjustments to our geographic strategy. While decisions like this are never easy, eliminating redundancies across our facilities puts the company in a better position to become the leader in online car buying and continue to invest in future areas of growth."

Both the Indiana Economic Development Corp. and the town of Whitestown had offered Vroom economic development incentives. 

The IEDC offered Vroom up to $3.3 million in tax credits and $100,000 in training grants; and Whitestown offered a 10-year, 100-percent abatement of personal property taxes. 

But Vroom never qualified for the incentives, state and local officials said.

 

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