Will Rivian quit fleecing taxpayers now?

Correction:  Ford invested $500M not $400M.

By:  Diane Benjamin

Since Rivian now has $500,000,000 from Ford, will they continue to accept subsidies from taxpayers?  PDF Page 4 and following:  https://www.normal.org/ArchiveCenter/ViewFile/Item/2258

December 8, 2016

rivian property tax

riv ec incent

What are the details that “will be negotiated at a later date“?

I’m sure they still want the property tax rebate – everybody in Illinois wishes they had one.  Can they at least agree to stop forcing taxpayers to fund for #4?  Every month the cost is at least $5,000.

25 thoughts on “Will Rivian quit fleecing taxpayers now?

  1. I still can’t believe that Normal still mows their yard and plows their snow! They are the black hole of money who without shame or reservation take and take and take….as the Koos leadership hopes and prays that someday a car/truck/SUV that someone will want to buy will emerge from the back of the plant.


  2. I remember the “giveaways” to Mitsubishi, years ago, to build in our area. I question whether any significant income to BN has ever generated from this plant . Maybe in “pockets”, but unlikely to the cities or McLean county.


    1. The car making business is not for amateurs and these boys are amateurs. They will never mass produce a car/truck/SUV in that plant.


    1. That would have been a good option before Rivian scammed them, but now? This is not a new plant with new equipment in it. Everything is OLD technology. In spite of what people who don’t know, the plant was a big machine with people feeding it and maintaining it. It is now a big old machine that has not been run for many years now. What would you expect from a car that sits in your driveway for years without ever being started? Whole areas of the plant need to be radically changed before anything can happen in that plant. Plants like this are designed to produce 1 platform only. They must be completely redesigned to do anything else. This costs a LOT of money. We are talking 1 billion plus for a mass production platform change. This is before you make even 1 production vehicle! And no one talks about the fact that the plant is a JIT (just in time) plant with NO warehousing!

      The chance for selling this to a real auto maker is now past. I think retooling a JIT plant was a major problem that most auto makers would not want to tackle. Ford had a perfectly good F-150 plant that could have been retooled but they decided to build a new plant to produce the new all aluminum bodies of the new 150s. Once Rivian fails the plant will have a lot of scrap value.


  3. Rivian is business, it’s not their fault they know how to cut a deal. They are trending in the right direction and we should be excited about their recent success. The whole thought process behind tax incentives is that by providing the cash the company can grow and if the company grows then the town will benefit. Come on Diane, you should know all about trickle down economics.


  4. Hey Tom, you pick up all the bills that the citizens of Normal pay for Rivian upkeep and see if it’s better for you.


  5. Instead of supporting the community by hiring a private firm to mow their lawn, Normal taxpayers get to pay city workers to mow Rivian expansive property, which OF COURSE they are not paying property tax on. Hey Koos… is that SUSTAINABLE GOVERNMENT????


  6. There are plenty of stories out there about what’s going on with Rivian. The best are in the automotive trade news sources. A simple Google search will clue anyone in to what is going on to the best of everyone’s knowledge. Don’t waste your time with local outlets because they are just cheerleader articles. That said, Rivian is getting some props at auto shows but means nothing when it comes to evaluating what they will eventually deliver as a long-term local employer. The investors have invested money because they are interested in the skateboard battery technology for different reasons, not the actual production of Rivian’s truck or SUV. Rivian needed Ford or GM on board because they are neophytes in mass producing vehicles. Ford eventually obliged because they want to make their own electric trucks using the skateboard undercarriage. The auto industry is savagely competitive and unpredictable. Will Rivian make a go of it? Even they don’t know. How many customers will buy in to electric vehicles that of right now, are just a drivel of the automotive market? They will likely become more popular but will it be to a mass audience that is willing to shell out $60,000 and above for a vehicle. Right now, the target market is very narrow and the dependability of the product unknown. If I were to guess, Rivian will eventually be bought out for the battery tech by larger operations. There is a lot of work to do to make this operation long-term viable for even ten years.

    Liked by 2 people

    1. I agree MPeabody. Auto making takes experienced people that Rivian would have to hire away from other auto makers to make this have a prayer of working. One only has to look at Tesla to see how deep the pockets need to be to enter and compete in this market. Even with the money and the experienced players this is a big dice roll. There are huge design, technical and engineering challenges to make this skateboard idea viable for mass production. This is not something that amateurs are going to accomplish with limited budgets. And no one talks about where they will get these massive batteries? Tesla had to make a battery plant for their production needs. This is why I don’t see vehicles rolling out of that plant anytime soon if ever.


  7. I heard from former paint shop people that the dip tanks were out in the yard and headed for recycling. These tanks were for the application of the ED undercoating before final painting. The ED coating is an electrostatic painting of all the surfaces on the raw bodies before the colors and clear coats are applied. This prevents modern cars from rusting very quickly. So they appear to be working on the paint shop… a massive undertaking considering it’s size and complexity. Then again they could be just scrapping the plant slowly…. who would know? These tanks have to be replaced with something to make a modern vehicle.


    1. The cynic (conspiracy theorist?) in me thinks scrapping the plant slowly. It costs X to take those tanks out, and they get Y for scrap. In theory, they’ll spend Z on replacements. If you start with tanks and continue with various other high-scrap-value equipment, one could argue all those Xs add up to the town’s prerequisite $20M ‘investment’ without them actually spending any replacement money. Rivian pockets all the scrap value, plus a cool mil from their pal Koos (paid for by taxpayers) and they are free to walk away from a stripped-down building with nicely mowed lawns.
      I make no claims that this is what’s actually going on, but given local governments’ financial track records of late, it would not be surprising…

      Liked by 1 person

  8. I have always thought their intention was ultimately to scrap the plant from the inside slowly. The amount of steel and copper is tremendous. I can’t even imagine how much copper is in that plant? I know that the body shop had 440 amp service to power the robotics and I would assume 440 amp service was throughout the plant. This means big wires and lots of them. I wont go into the amount of steel inside but there is a lot… tons and tons.

    The problem has always been the fact the people who made the decisions (Fuhrer Koos and his ministers) know nothing about manufacturing in general and they are really really gullible. It doesn’t help that they are also desperate to put something they can tax back in that plant. In spite of their public (hear no evil, see no evil, speak no evil) position, it must be apparent to them that the future economic outlook for Normal is not very positive. Normal’s reliance on ISU as its sole economic driver is problematic to say the least. Higher education is headed for a big market correction that is not going to be pretty for communities across the country. Fuhrer Koos has bet the farm that things at ISU will stay the same for the next decade or two. He is now doubling down with Uptown 2.0. Normal went from zero debt to 90 million (I don’t know the exact number)? The bell is tolling for Normal and its one industry economy.

    Liked by 1 person

  9. My assessment of this stays the same – R.J. Scaringe is one of the top “flim-flam men” to ever walk this earth. He and his cohorts/partners in crime are doing a fleece job extraordinaire on a WHOLE LOT of people, some who SHOULD know better. He is a charlatan and Rivian is one of the biggest scams to ever exist. Unfortunately, I believe he, and his close circle of unethical little dorks will skate off into the sunset with even MORE money and within 3 to 4 years the entire thing will be but a bad memory, Rivian will go bust again, change their name again and this area will never recoup their losses, Amazon and Ford may rue the day they allowed him into their lives as well, but “R.J.” will be JUST fine and dandy, maybe working on a hovercraft of some kind or a flying car or maybe selling ice to the Greenlandic people, but I doubt they are as easily fooled as the people he buffaloed in Normal – who knows – I will be VERY surprised if I am incorrect. I honestly can not see how anyone would even give him a dollar and a little change for a cheeseburger to be perfectly honest let alone “invest” in him.

    Liked by 1 person

      1. Yes they did. It’s just a matter of time before they leave in the middle of the night with the Normal taxpayers and Fuhrer Koos holding a bag full of nothing.


    1. I completely agree. Nice job summing it up! And yes there are a whole lot of people who should know better and should not be such easy pickings for snake oil salesmen like R.J. (Clark Kent) Scaringe.


  10. Two good articles yesterday in USA today on TESLA

    It talks about how much it costs a start up company and the cash flow needed to keep it going. Tesla is struggling with good sales.

    Point is Rivian will need a lot more cash to open, and a lot more cash to maintain operations.

    Sure they have Amazon and Ford stating they will invest. It all speculative investing. For example Tesla stock value at $224 per share means they are valued more than GM $38 when GM has sales over $8.0M annual.

    Ford I would assume it a part supply agreement as Tesla will need someone to make Engines and Transmissions.

    I also would assume Rivian didn’t have the $10M to invest for save the taxes for this year as both of these companies offers cam to late.


    How much it costs for a start up

    What other car companies have failed
    As Tesla Inc. co-founder Elon Musk would be happy to tell you, building a successful car company from scratch is one of the most challenging and complicated entrepreneurial endeavors – and despite its success, the electric car company is still bleeding massive amounts of cash.

    If Tesla succeeds in becoming a profitable mass producer of cars, it will stand out among a graveyard of failed ventures — brands that were successful for years in some cases but eventually disappeared.

    Nearly every aspect of the business is a complicated, expensive task. A common industry estimate is that it costs about $1 billion to develop a new vehicle and up to $6 billion if all parts of the vehicle – the platform, the engine, the transmission, the body style – are also brand new. And that assumes a company already has a factory, which itself can cost at least $1 billion to construct from scratch. Even then, the most well-made and stylish vehicle is not guaranteed a commercial success.

    With so many factors at play, starting a car company today without any support from an existing major auto industry player is almost impossible. Yet, this is exactly what many tinkerers did over a century ago when all it took to build and sell a car was a blacksmith shop and a modest amount of seed capital.

    Tesla posts big earnings loss as worries about cash flow grow

    Tesla said Wednesday that it has made progress in boosting production of its first mass-market electric car, but questions remained about whether the automaker can maneuver its way through a potential cash crunch.

    While its quarterly loss was less than analysts has predicted, investors weren’t pleased: After initially rising, Tesla shares dropped about 4.5% in after-hours trading.

    Tesla said it was able to make more than 2,000 Model 3 cars a week during three weeks in April, a big boost from past production levels. It is aiming to hit at least 5,000 a week by summer.

    In releasing its quarterly earnings, Tesla reported another massive, though expected loss. It said it lost $567.9 million in the first quarter, or $3.35 a share. It beat the expectations of consensus of analysts by Thompson Reuters I/B/E/S, which predicted a loss would be $3.58 a share.

    Still, the loss is up from $3.04 a share in the last quarter and $1.33 in the same quarter a year ago.

    Tesla also did better on revenue than expected. It took in $3.4 billion during the quarter, besting the $3.2 billion that had been forecast.
    The losses aren’t due to lack of demand. Tesla said it had more than 450,000 reservations at the end of the first quarter. Buyers plunk down $1,000 to reserve a Model 3. Rather, the losses are blamed on a huge ramp up in hiring and production.

    Tesla is losing $6,500 a minute, Bloomberg News reported last week, based on an analysis. On Wednesday, Tesla said it had a cash balance of $2.7 billion at the end of the first quarter.

    He said he is dead set on making Tesla profitable, with positive cash flow expected in the third and fourth quarters.

    The Model 3 is priced to start at about $35,000, about half the cost of the least expensive Model S luxury sedan that Tesla also produces at its factory in Fremont, Calif. In addition, Tesla makes the Model X luxury electric SUV.


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