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Local Unions Raise Concerns Over Out-Of-Town Workers At Rivian Plant

RJ on stage
Ryan Denham
Rivian founder and CEO RJ Scaringe introduces the company's first two electric vehicles at the LA Auto Show in November 2018.

If all goes as planned, in a few years Rivian will be one of McLean County’s largest employers. Around 1,000 employees at its Normal manufacturing plant will be cranking out Rivian electric vehicles and skateboard platforms for other automakers.

But for now, local unions say Rivian isn’t being a good neighbor.

Several union leaders told GLT that Rivian is using out-of-town workers for some of the major remodeling underway at the Normal plant.

"We were hoping this would be the start of a relationship with Rivian."

“Shame on Rivian for taking tax incentives from the Town of Normal and using those incentives to hire workers from the Chicagoland area,” said Mandy Jo Ganieany of Normal, a district council organizer for the Painters District Council No. 30.

“They’re actually painting the whole inside of that plant—the deck, walls, columns, and all. They’re painting it white,” she said. “What that boils down to, with product and labor, you’re talking about $3 million worth of work going on right here in Normal, with Chicagoland workers.”

Ganieany said any company that’s receiving local tax breaks—like Rivian does—should hire locally whenever possible.

“I have 16 highly skilled, highly trained workers that are taxpayers to the Town of Normal, who put their children through Unit 5, onto Illinois State. They’re completely invested in this community, and they’re watching this work go on,” she said.

The painters aren't alone. Union leaders say out-of-town workers are also doing floor polishing work inside the plant. They're also say a lot of the tearout and demo is being done by nonunion low-wage workers hired through a local staffing firm.

“Any demolition can be performed by the Laborers trade. The contractors they have in there are from out-of-state, doing work that we obviously feel we can do if given the chance,” said Ronnie Paul, secretary-treasurer with the Laborers Local 362.

Pat Hardesty with the Plumbers and Pipe Fitters Local 99 in Bloomington said it's not a union vs. non-union issue. It's local vs. non-local.

“We were hoping this would be the start of a relationship with Rivian, to help them much like we did when Mitsubishi came to town, to integrate them into the community,” Hardesty said.

The tricky part is that Rivian isn't required to hire locally for its remodeling and tearout inside the plant it bought for $16 million. Fresh off big investments from Ford and Amazon, Rivian plans to begin production on vehicles, batteries, and skateboard platforms next year.

The agreement Rivian signed with local governments to win millions in tax breaks—plus a $1 million one-time grant from the Town of Normal—doesn't require the painters and floor polishers and laborers be Bloomington or Normal residents.

Hardesty said hiring local workers would've been a good way to offset any tax revenue perceived to be lost as a result of the incentive agreements.

“By hiring the local workforce, that money stays in the community,” he said. “And therefore, the taxes that the workers would pay then go for fire, police, and the teachers. That which makes up a little bit for the loss of revenue they incurred by giving the tax incentives.”

To be fair, Rivian has hired local union members for some of the work, specifically a major remodel of the office areas of the plant. The first phase of that work—valued at $1.3 million—went to Central Illinois-based contractor PJ Hoerr.

Rivian spokesperson Michael McHale said the company has talked with union leaders and that local contractors can bid on its remodeling work. He said contracts are awarded based on many factors, including quality, price, and delivery time.

McHale said Rivian has to get the plant ready for production in the most cost-effective way possible. And he encouraged community members to look at the long-term benefits of Rivian's permanent full-time hires, which could reach 1,000 by 2024.

Normal Mayor Chris Koos said he helped arrange a meeting between local unions and Rivian a few weeks ago, to address these concerns.

“We work pretty closely with labor—I do, anyway—to try and resolve these issues,” Koos said.

Koos said he'd encourage private companies to hire locally on projects like this.

“That’s a valid issue. That’s definitely a valid issue,” Koos said.

Rivian secured local property tax breaks before buying the former Mitsubishi Motors plant in early 2017. It got around $561,000 in taxes abated last year. It won't get any this year because it failed to meet the $10 million minimum capital investments in the plant that it promised to taxing bodies. Rivian said that was due to equipment procurement delays.

If it hires 1,000 workers and invests certain amounts in the plant, Rivian will also get up to $49 million in state tax credits.

Project Labor Agreement?

Several union leaders told GLT they wish local taxing bodies had helped secure a project labor agreement (PLA) with Rivian.

Inside the plant
Credit Mike Miletich / WGLT
A major remodeling effort is underway inside the Rivian plant.

Those are pre-hire collective bargaining agreements with one or more labor organizations that set the terms and conditions of employment for a specific construction project. They can help avoid strikes, lockouts, or other work stoppages. 

A PLA could have required local workers for this initial remodeling at Rivian. 

“If we could’ve sat down at the beginning and been given a little information … I realize this is a startup, and a lot of this technology is brand new. And you want to keep it under wraps as much as possible. But I feel that if when Rivian bought the facility, if they would’ve sat down with Building Trades, we could’ve worked something out to alleviate their fears and help integrate them into the community by being there as one of their partners in this operation,” Hardesty said.

The plant itself has a history with labor agreements. When it was built in the late 1980s, the general contractor signed a landmark agreement that guaranteed the work would be done exclusively with union labor. It was signed by 16 local unions.

Project labor agreements are now common for public projects, and can be used for private projects too, said Robert Bruno, professor of labor and employment relations at the University of Illinois at Urbana-Champaign.

“The research that’s been done indicates that … PLAs really perform quite well and are very efficient mechanisms for making sure that investment of that tax dollar really generates good value for the citizens, for the village, for the project owner (or) developer,” Bruno said.

Ronnie Paul with the Laborers said hiring local union workers doesn't necessarily mean it'll cost more. He said union shops can sometimes complete work faster, cutting down overall costs. He said they can do the job skilled, safe, and on-time.

“We don’t necessarily feel that just because our union contractors pay our workers more, that we’re not competitive. Because we can be,” Paul said. “You get what you pay for.”

Despite this bump, Paul and other union leaders say they hope to have a positive relationship with Rivian moving forward.

“Originally, it started off with maybe they didn’t know what we had to offer as far as contractors. Hopefully in the future they can feel comfortable calling on our contractors that employ our local labor,” Paul said. 

It's also unclear whether the United Auto Workers union will return to the plant once more full-time employees are hired. Rivian has around 60 employees in Normal, but that’s expected to increase soon. A report filed by Rivian with the state says Rivian expects to have 325 employees in Normal by the end of 2019.

The UAW once represented Mitsubishi employees in Normal. During a visit to Bloomington-Normal last fall, Rivian founder and CEO RJ Scaringe was asked if they’ve had any talks with the UAW.

“We’ve not. That’s something we’ll have to do over the course of the next year, start those discussions,” Scaringe said. 

The UAW did not respond to requests for comment. A UAW spokesperson previously told GLT they normally we do not comment on organizing strategy ahead of time.

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Ryan Denham is the digital content director for WGLT.