By on June 24, 2020

Following reports that Rivian might decide to move a large portion of its operations out of Michigan, news has reached us that it’s all but abandoning the Mitten State for sunny California.

Starting its life as Avera Motors in Florida back in 2009, the EV startup moved to Plymouth, Michigan in 2015 to poach talent from the Big Three and lay down some roots. However, the company doesn’t appear to have wormed its way into the soil all that deeply. It now plans to move a sizable portion of its operations to Irvine, California, with some employees heading to its plant in Normal, Illinois, to prepare for production.

This has got to be a slap in the face for some Michigan residents, since many were instrumental in the development of Rivian’s first models. The business fired a gaggle of people at its engineering and design center near Detroit at the start of June, only to slot in a couple of high-paid executives. Now it’s starting to look like it may pull up stakes and skip town.

Spokeswoman Amy Mast confirmed a portion of Rivian’s product development team will be moving out of Michigan, adding that the company does intend to keep utilizing its Plymouth facility for the time being.

“Of Rivian’s 2,300 employees, approximately 1,000 are based in California and 750 in Michigan,” Mast told Automotive News in an email. “We are consolidating some engineering teams to our locations in California to improve workflows and reduce environmental impact from travel.”

“We’ve recently completed an expansion at our Michigan location, and it will remain an important presence for us,” she continued. “We are also committed to creating a vibrant and inviting manufacturing presence in Normal, where all Rivian vehicles will be produced. As we grow, we’ll keep evaluating and evolving our footprint and geography.”

While Irvine is loaded with office parks just begging to be occupied, it’s curious that the brand would snub Michigan after having built up its supplier base there. Rivian has likewise signaled that the local community was important to the firm in the past and refused a $1-million grant from from the city of Normal on ethical grounds. “The impact of COVID-19 has reminded us all of the importance of community,” CEO RJ Scaringe wrote in an April letter. “The main asset of any community is its people, and as resources stretch thinner for every community across the world, we want to do whatever is possible for a pre-production company in our position to help alleviate pressure on our home.”

Now the business risks losing Midwestern talent with a background in the automotive industry by shifting operations out West. According to one former executive, the CEO just thinks the West Coast is sexier than Great Lakes — hence the not-yet-announced move.

From AN:

Rivian CEO RJ Scaringe “believes California is a cool place to be and Detroit has an old technology image,” a former Rivian executive told Automotive News. “He thinks California represents tomorrow and Detroit is all about yesterday.”

Since moving to metro Detroit, Rivian has hired a cadre of experienced designers and engineers — many from Ford Motor Co., General Motors Co. and Fiat Chrysler Automobiles.

It also has secured around $2.85 billion in financing from Amazon, Ford, Cox Automotive and an array of institutional investors. In December, the company landed a $1.3 billion investment round led by T. Rowe Price. Autoline reported that some of Rivian’s staff were unhappy at the prospect of moving.

We can’t predict how this will work out, though this presumed style-over-substance strategy has us slightly concerned. The region is awash with EV companies, thanks to government incentives and the aforementioned cool factor, but many seem to have gone there to experience a slow death. Legacy automakers fled the state while EV firms, like Faraday Future or Fisker, struggled to get off the ground. Even golden boy Tesla is considering abandoning California for greener pastures after Elon Musk said he had had it with the state and was “the last carmaker left in CA.”

Rivian lost a development deal with Ford Motor Co. this year and stalled the launch of its all-electric R1S crossover and R1T pickup from late 2020 to the start of 2021. It also hopes to get delivery units out to Amazon within the first 12 months of assembly kicking off. For its sake, we hope it does, and that this big move to California isn’t being done on a whim.

Amazon

[Images: Rivian]

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24 Comments on “Rivian Snubs Michigan for California...”


  • avatar
    Fred

    Rivan’s reasoning is exactly how ended up moving from California to Texas with the company move some 20 years ago.

  • avatar
    indi500fan

    Wonder if they plan on picking up Tesla folks who don’t want to relo to Texas?
    However, having your engineering peeps 2000 plus miles from the startup plant is a recipe for problems.
    Enjoy the Pacific coast, RJ.

  • avatar
    SCE to AUX

    “losing Midwestern talent with a background in the automotive industry”

    That’s funny. Critics of the Big 3 might differ with that generalization.

    Tesla hired many of them away already, and maybe it’s this California automotive talent that Rivian hopes to poach. But they will need to look elsewhere for a paint expert, because Tesla doesn’t seem to have any.

    • 0 avatar
      indi500fan

      The continuing Tesla paint problems are a bit hard to understand.
      Paint process, while difficult, is well understood for at least the last two decades and typically the suppliers of the equipment and of the paint products are happy to assist.

      My take from 2000 miles away is that they have the same cultural approach as GM did in the early 80s…people are gonna buy these things no matter what so just get them out the door and on the truck. The shabby detail work I’ve seen on pics of the new Y models looks much like the GM X-cars at launch.

  • avatar
    geozinger

    Start the deathwatch. I guess if you’re trying to hide from your troubles, albeit temporarily, the West Coast is a nice place to do it.

  • avatar
    Master Baiter

    California is full of Asian and Indian engineers who you can work to death, while the state provides living conditions that only need to exceed those of China and India, which is a pretty low bar. Of course the factory will be located in red state America, free of unions and environmental regulations requiring the paint used on your cars to be indistinguishable from water color.

    • 0 avatar
      indi500fan

      IIRC Rivian is going into the abandoned “Diamond Star” Chrysler / Mitsubishi jv plant in Illinois. It was a UAW organized plant and Illinois is not rtw. However if RJ is as skillful as Elon, he may pull off a non-union operation similar to what Tesla has done in Cali.

  • avatar

    All the top talent from the entire planet is concentrated in California. Detroit is so yesterday. Weather in CA is also much nicer than in Michigan, add here ocean and beautiful beaches, National parks, California cuisine and wines.

    • 0 avatar
      stuki

      “All the top talent from the entire planet is concentrated in California”

      Which is make or break in the entertainment industry, where there is only room for a few hundred name brand stars.

      In any other field, perhaps outside of bleeding edge pure science at Nobel track schools, the “top talent” is at most 2% more productive than the 100X larger cohort second from the top. And in California, assuming the “top talent” is even there in automotive relevant areas which is extremely doubtful, you have to pay a 100% upcharge for those 2%. Which is why you don’t have automakers in California anymore. Just as you don’t have sneaker makers, cellphone makers nor makers of much of anything there anymore, no matter how “top” the local talent may consider themselves.

      Much more relevant for makers of pie-in-the-sky pure futurism, California does sound more Silicon-Valleyish-like-Steve-Jobs-kinda-you-know-like-invest-yeahh when time comes to sell the product these guys are really in the business of selling: Stocks, bonds and empty promises of a future which will always remain just that. With at most a smattering of beggar-thy-less-fortunate-neighbor tax-transfers from buyers of real cars thrown in for good measure. Noone does Flash Gordon, nor flying cars, nor pipedreams in gegeral, better than Hollywood, after all.

  • avatar
    gasser

    “The West Coast is sexier than Great Lakes”. Yes, if by sexier you mean horribly crowded, very expensive and heavily taxed. Whatever those engineers can earn in California will go toward housing where $1M is a tear down, commutes are the longest, gas is $3.50/gallon due to our “smog formula” and there’s an 11% maximum state income tax. I’ve been here 50 years, but the glow of the sun setting into the Pacific is fading….. and rapidly.

    • 0 avatar

      The top tax bracket in Cali is now 13.3% for $1mil+ incomes(single),$1.18mil for married.
      Gas tax is supposed to go up another 3.2 cents/gallon for a gas tax of 50.5 cents/gallon. Can’t wait to see what the Dem run state will do if they get their wish and a significant chunk of population moves to electric cars. The state beginning July 1 is imposing a $100 road improvement fee on all new(2020 model or newer) zero-emission vehicles.

  • avatar
    thegamper

    Probably a smart move since California will likely be a huge initial market for these vehicles. If you live in Michigan, being relocated to California isn’t much of a threat. Michigan is a beautiful place outside the big city, but weather alone is all you need to pack your bags.

    • 0 avatar

      Living in California you have very different, I would say more progressive, futuristic worldview than if you live in Michigan. That’s why companies open offices in Silicon Valley. BTW my former coworker works for Rivian in Irvine, CA.

      • 0 avatar
        thegamper

        I’d just go for the weather, I’m quite sure I can find smug in all 50 states, though you are probably right, it is especially abundant in California.

  • avatar
    SuperCarEnthusiast

    Rivian played State Of Michigan it seems!

  • avatar
    Jerome10

    Gotta get in on those sweet sweet tax incentives for these save the world vehicles.

    Being in a place where people thinking buying them turns them into Jesus Christ himself will probably help move the metal.

    Not to mention all these same people LOVE burning billions in cash in their attempt to save the earth/become Jesus Christ. Perfect place for a worthless startup with no future but makes investors feel great getting involved in the cult.

    Agree with starting the Deathwatch.

    Tesla is an aberration. It will not be repeated.

    • 0 avatar
      la834

      Good Lord, people buy EVs for reasons that go well beyond environmental benefits. Maybe they also like massive instantaneous torque, a low center of gravity, reduced maintenance, a front trunk, quietness, and being able to refuel at home.

  • avatar
    FThorn

    Stupid move.

  • avatar
    redapple

    Cali People wont buy one because the engineering is there. People dont know Nor care where their car is built – much less engineered,

    2- It s a play to gobble up Tesla employees as tesla decamps. Rivian can play a scam and scale this up or down based on what Tesla really DOES.

    3- Detroit really is where you need to be if you are a car company. The engineering talent, tool shops, prototype shops, suppliers and so forth is staggering. You are at a major disadvantage if you are not located here.

    4- Talent. You better get them all in Cali. Outsiders wont move in great numbers. Cost of living, housing, taxes, and so forth are staggering. You cannot pay the staff a 40-50% premium to live there. You cant run a business that way.

    4b- I ve been to both Cali Tesla plants working on projects. The employees from out of state commonly said- ‘ I m not coming out ahead. I make more- but it doesn’t cover the added costs.

    4c- I was NOT impressed with tesla engineering & purchasing. Not knowledgeable. Learning as they go? (and I ve been in over 100 car plants. A 1000 engineering & -or purchasing meetings including GM, Ford, FCA, Caterpillar, International, Cummins, Mercedes, Freightliner, Borg Warner, Magna, Valeo-you get the idea.)

    • 0 avatar
      mcs

      “I was NOT impressed with tesla engineering & purchasing. ”

      If you’re talking about the design engineers, they have both good and bad. The cooling systems and battery cell engineering is great. The 3’s body design was terrible, but they’ve improved with the Model Y.

      If the engineers you met with were the manufacturing people, I’d definitely agree with you there and you confirm my suspicions. I’ve never met them myself and it’s been decades since I’ve been in auto plants, but I can’t understand why they haven’t solved the quality problems.

  • avatar
    Paul Alexander

    Why do people take this obvious self-enrichment, PR scam as a real going concern? Shouldn’t they actually produce something before actually being taken seriously? Replaced engineers with high-priced executives? I wonder if those new team members are politically connected and can help in finding more subsidies and tax credits to help continue paying high salaries to those at the head of this scheme. The more likely reason for ‘moving’ from Michigan and Illinois to California is they’ve likely tapped out on the money they’re going to get from those former states and the latter has indicated it’s willing to play ball.

  • avatar
    SoCalMikester

    its basically to stroke the CEO’s ego. wouldnt surprise me if he was from the area. fremont is 400 miles north of irvine, and probably a lot cheaper. i live near cypress, and there are a lot of headquarters there as well. took a pic of my yamaha scooter in front of their HQ down the street.

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