Rivian EV plant aims to ramp up production, with 5,000 workers, 83,000orders and a few missing parts
This article originally appeared in the Chicago Tribune Business Section on April 19, 2022.
NORMAL, Illinois — As problems go, Rivian CEO and founder R.J. Scaringe believes he has a good one.
The startup EV manufacturer has renovated a shuttered Normal factory, created thousands of jobs, raised billions of dollars and launched production of an electric pickup truck and SUV that have captured the imagination of the automotive world.
But six months after the first R1T truck rolled off the assembly line at the former Mitsubishi plant, Rivian can’t build its $70,000 EVs fast enough to satisfy customer demand — or some Wall Street analysts and industry critics. Scaringe cited the simultaneous ramp-up of several different models and the broader supply chain issues roiling the auto industry as hampering production.
“Demand is more than we can produce at peak capacity, which is good, but it’s still a problem,” said Scaringe, 39, during a recent plant tour. “Our job is to make sure that that’s not the case.”
Hoping to assuage concerns, Scaringe opened the doors to his 3.3 million-square-foot factory last week, demonstrating both the progress Rivian has made, and the urgency to increase production.
When Rivian hosted its first open house in the Normal town circle in fall 2019, the sprawling plant on the outskirts of town was still a hulking shell and empty parking lot overrun by geese, undeterred by a handful of coyote statues guarding the vacant grounds.
Two and a half years later, the geese are still there, but they have plenty of company. The parking lot is packed and the plant is buzzing with 5,200 employees and 810 massive robots building thousands of R1T pickups and R1S SUVs, along with two models of EV delivery vans for Amazon, an early Rivian investor.
California-based Rivian, which is sitting on $18 billion in cash, has orders for more than 83,000 consumer EVs and 100,000 Amazon vans, but it built only 2,553 vehicles during the first quarter. Scaringe said the plant is on track to hit a target of 25,000 vehicles this year. Rivian would be able to produce 50,000 vehicles this year, if not for supplier constraints, he said.
The people and the processes are in place to reach the plant’s 150,000-vehicle capacity by the end of 2023, but ramping up to full production has been slowed by pandemic disruptions and raw material shortages that “haven’t been seen in the history of the industrialized world,” Scaringe said.
The global semiconductor shortage has been exacerbated at Rivian by its limited production history, with suppliers earmarking computer chips for established automakers first, the company said. In addition, Rivian is having supply chain issues with wire harnesses and printed circuit boards.
“An R1 has roughly 2,000 different components. We have 1,999 of those, and that doesn’t equal a car,” said Scaringe. “So that’s the challenge. It requires the completeness of the supply chain to achieve ramp.”
When Rivian went public in November, investors were betting the EV startup would become the Tesla of trucks, pushing its valuation north of $100 billion — more than Ford or General Motors. But the stock, which hit a high of $179.47 in mid-November, has fallen sharply this year amid the slow ramp-up, closing at $38.23 per share Monday and cutting Rivian’s market cap to about $34 billion.
In February, Rivian brought in a new vice president of manufacturing operations at its Normal plant, replacing Erik Fields with Tim Fallon, both former Nissan executives.
While the company is building a second $5 billion assembly plant in Georgia to keep up with anticipated future demand, the pressure to ramp up now is on in Normal, creating a top-down mission across the entire workforce to launch the EV maker into full production.
“It’s almost like we’re trying to get to the moon,” said Victor Taylor, senior director of stamping, body and plastic at the Rivian plant, one of several executives helping lead last week’s tour.
Mitsubishi opened the Normal plant in 1988. In its heyday, it produced more than 200,000 vehicles per year, while staffing levels reached about 4,000. When the Mitsubishi plant closed amid waning production in July 2015, it left 1,100 people out of work.
Scaringe, a Massachusetts Institute of Technology graduate with a doctorate in mechanical engineering, founded Rivian in 2009, and found a production home in Normal after visiting the shuttered plant about 130 miles south of Chicago in 2016.
Having an idled auto assembly talent pool was another asset for Scaringe, who ended up buying the factory for $16 million from a liquidation firm in January 2017. The company has gone from 300 employees in Normal to more than 5,200 in about two years.
Construction has begun to expand the 3.3 million-square-foot factory to 4 million square feet by the fourth quarter, which will increase production capacity to 200,000 vehicles per year, Scaringe said. It will also require more assembly workers.
Cindy Nicola, vice president of talent acquisition at Rivian, said the company plans to hire as many as 1,500 additional manufacturing employees at the plant by the end of the year. The starting salary is $20 an hour, and the assembly line already includes dozens of former Mitsubishi autoworkers, Nicola said.
Floyd Cunningham, 63, and his wife, Erin Cunningham, 59, of Mackinaw, a small town near Peoria, met while working as electricians at the Mitsubishi plant. They married, he stayed on for 22 years, and she went home to raise their kids.
When the Mitsubishi plant closed in 2015, he briefly found work commuting to the Belvidere Jeep plant, but returned to Normal in 2017 as one of Rivian’s first employees.
“When I came back, this place had been shut down for two whole years,” Cunningham said. “It was dark, cold, wet, you name it, and nothing ran. I’ve seen it go from that mess to where we’re at right now.”
Cunningham, whose wife and daughter have also landed jobs at the Rivian plant, said he feels more invested in the EV startup than with Mitsubishi.
“When I was at Mitsubishi, I came in to work my 12-hour shift, I went home, that was it,” he said. “This is a different story. I was given a lot more responsibility in the very beginning, and so sometimes at home, I’m thinking about my job, what needs to be done. And I’ve never wanted a place to succeed as much as I wanted this one to.”
Stacy Cameron, 60, of Bloomington, took a job with the Mitsubishi plant in 1988 after she was laid off at the General Motors Wentzville Assembly plant near St. Louis. She worked at the Normal plant for 27 years, raising her two sons and building a career she thought would eventually take her to retirement.
Cameron remembers the day in July 2015 when those retirement dreams were dashed.
“They stopped the line, built a podium and told us that they were closing the plant,” Cameron said. “It was kind of devastating for me.”
She went back to school for a computer networking degree after the plant closed and took an office job with Bloomington-based insurance giant State Farm. Cameron discovered she “wasn’t a desk person” and returned to the factory as a quality-control technician for Rivian in November 2020.
Cameron, whose son has also joined her at the Rivian plant, said employees have been “putting in a lot of hours” as production ramps up and the processes evolve.
“The biggest part of coming to work for Rivian is that we’re trying to figure out that process every day, trying to figure out what works and what doesn’t work,” she said. “It’s been a little different working for a startup company.”
Decked out in a blue Rivian button-down shirt, gray baseball cap and signature black-frame glasses, Scaringe led a golf cart caravan through the complex production operation. One of the first stops was the massive stamping equipment, a holdover from the previous tenant at the heart of the manufacturing process.
“The stamping presses were going to get disassembled,” Scaringe said. “We were lucky we’re able to reuse the stamping.”
The R1T pickup, which launched production in September, was the dominant species on the plant tour, spotted in various stages of assembly, along with EDV 700 and EDV 500 Amazon delivery vans. Sightings of the R1S pickup, which began production in December, were somewhat rare.
The tour wrapped up with a meal at the vehicle delivery center prepared on a $6,750 slide-out camp kitchen accessory hooked up to an R1T, and a test drive on the adjacent on-road/off-road track.
The Rivian R1T was named the MotorTrend Truck of the Year for 2022, which reviewers called “the most remarkable pickup truck” they had ever driven. A run on the Rivian test track showed it equally adept at rock climbing, traversing a creek bed or accelerating with such G-forces it required a signed waiver to take the wheel.
Watching his EV truck surmount a steep hill from a couch in the delivery center — a stand-alone building where only a trickle of customers have been able to pick up their new vehicles — Scaringe reflected on the road ahead.
“We’ve had really hard times at Rivian since I started the company. This is a hard time, but this is not the hardest of the times,” Scaringe said. “We have to ramp. It’s a short-term push, it’s going to be painful, we have a lot of people making a lot of noise about it, keep our heads down and focus.”
©2022 Chicago Tribune. Visit at chicagotribune.com. Distributed by Tribune Content Agency, LLC.
Copyright 2022 Tribune Content Agency.