LDN - Business

Rivian production lines reduced due to supply shortage

[October 09, 2024] By Catrina Barker | The Center Square contributor

(The Center Square) – Rivian production lines have reduced production due to supply shortages, but there have not been any layoffs ahead of the November election.

According to Rivian employees, the R1 production lines are down to three days a week, which means employees aren’t making electric vehicles on Mondays and Fridays.

Rivian confirmed the production disruption of both the R1 and RCV lines. Rivian said it was due to a supply shortage of a shared component. Rivian would not confirm if the component is copper wire used to make the electric motors.

Wirepoints President Ted Dabrowski said the Illinois-backed tax incentive package valued at $827 million over 30 years for Rivian is Gov. J.B. Pritzker gambling with taxpayer funds.

“He’s promised a lot of state money to the company [Rivian]. Just like Gotion and Stellantis and a whole host of others where the governor is playing king with taxpayer money,” Dabrowski said. “This is money that has to be raised from a whole bunch of small companies so he can give it to a select few companies and he has no idea whether they will survive or not.”

Dawbrowski said that in order to receive tax incentive packages, Rivian has to hire workers and keep workers working.

"This latest news of them cutting back production is worrisome because it’s hard to employ people if you’re cutting production,” he said. “We’ve seen all the bad news when it comes to the EV industry, the soft sales, the lack of infrastructure, are there enough people who can afford EVs? All that stuff is hitting hard and you see Rivian’s stock price go down and that’s a clear reflection that the market is worried.”

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Illinois Gov. J.B. Pritzker during an announcement at Rivian in Normal. - Governor JB Pritzker / Facebook

Rivian spokesperson Kelli Felker said they are working to resolve a supplier-related issue to return to normal production as quickly as possible. Felker said all employees have the opportunity to work 40 hours a week.

Illinois’ unemployment rate for August tied for the second-worst in the U.S. Dabrowski said the American electric vehicle industry is struggling, but in Illinois it could be even worse.

"We don’t know what the idling of the plant for a certain amount of time does to their promised job creation, but it certainly deserves a lot of scrutiny to make sure if we are going to hand out taxpayer money that the companies we give it to meet those [job creation] goals,” said Dawbrowski.

Illinois companies announced 1,183 mass layoffs in August, according to the Illinois Policy Institute. Dabrowski said a Rivian layoff is something to watch for.

"This is a highly-political period and you never know if things like that get held until after the election, but we will see,” said Dabrowski.

A Rivian spokesperson denied a report about potential layoff discussions.

In June, Rivian confirmed “a small number of salaried positions” were eliminated. The June layoffs impacted less than 1% of Rivian’s employees. About 8,000 people work at the Rivian plant in Normal.

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