Rivian Snubs Michigan for California
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.
[Images: Rivian]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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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.
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.