3 days Ago By Josh Eidelson Bloomberg News
Under Rivian and the UAW’s confidential pact, the automaker would adopt a neutral stance toward efforts to organize workers at the factory in Normal where its vehicles are made, according to people familiar with the matter. The neutrality commitment will only take effect once the company reaches certain criteria including profitability metrics, said the people, who didn’t elaborate on what those metrics were and spoke on condition of anonymity to describe the private terms. The previously unreported neutrality commitment could help pave the way for the UAW to organize workers at Rivian, a longtime target in the union’s uphill struggle to unionize the EV industry.
But that opening could still be far off: Rivian has never posted a quarterly adjusted profit. That goal has been elusive as the company struggled with supply-chain snags and a broader slowdown in EV demand. Rivian did not provide a comment.
The UAW declined to comment. By securing a pledge from Rivian that the automaker wouldn’t oppose a unionization effort by its workers, the deal could prove particularly important for the UAW under President-elect Donald Trump’s incoming administration, which is expected to be less friendly to unions than President Joe Biden’s. Unions often mount pressure campaigns to convince companies to adopt "labor peace" or “neutrality agreements” to circumvent the variety of legal and illegal ways companies can dissuade workers from organizing.
The accords can restrict both union-busting tactics by management, and disruptive or embarrassing protests by organizers. “When there are neutrality agreements, workers are much more likely to choose union representation because workers feel safer in making the decision,’’ said Sharon Block, executive director of the Center for Labor and a Just Economy at Harvard Law School, who served in Biden’s White House. “Neutrality just communicates to the employees ‘make the decision you want to make, and we’re going to abide by the law.
’” Such private agreements can also help companies get unions’ support — or avoid their opposition — as they seek government funding or approvals. But they can be hard to enforce if the two sides come to disagree on how their terms should be interpreted, or whether each other are in compliance. Longtime target For Rivian, the deal helped pave the way for a conditional loan of as much as $6.
6 billion from the US Energy Department to help fund construction of a new EV plant in Georgia, according to people familiar with the matter. Rivian still needs to satisfy technical, financial and other requirements to finalize and receive the loan from the department. Rivian is looking to the factory to help ramp up production of more-affordable electric vehicles.
But its hostile relationship with the UAW was said to be a point of contention in funding discussions with the pro-labor Biden administration, Bloomberg News reported in July. A representative for the Energy Department declined to comment. Still, there’s no guarantee Rivian will perform well enough to trigger the new union-friendly commitments.
In a November call with investors, Rivian confirmed it’s on track to reach a longstanding goal of “positive gross profit” this quarter, in part fueled by the sale of regulatory credits. Chief Financial Officer Claire McDonough said at the time that the company expects to see a positive gross profit margin in 2025 as a whole, though it does not expect to do so in each quarter. Unionizing Rivian would be a major coup for the UAW’s push to hike labor standards in the evolving EV industry and organize non-union auto factories.
Last fall, coming off a six-week strike that secured record contracts with the three big Detroit carmakers, UAW President Shawn Fain announced a campaign to organize the plants of 13 other automakers, including Rivian and Elon Musk’s Tesla Inc. Despite an early victory at Volkswagen AG, that effort has lost momentum following a failed vote at Mercedes' Alabama complex in May. Rivian has been a longtime target for the UAW, which has recruited employees for a committee to organize its plant in Normal.
The union has also helped staff file safety complaints with the U.S. Occupational Safety and Health Administration.
In a September statement about safety issues at the plant, Fain urged governments not to subsidize the company unless it improved its working conditions. In January, the National Labor Relations Board issued a complaint accusing Rivian of illegally firing an employee in Virginia because they engaged in collective action about workplace issues; Rivian later settled that case. The agency, which enforces employees’ right to organize at work, is currently investigating UAW allegations of illegal threats, retaliation, and surveillance by Rivian management in Illinois, agency spokesperson Kayla Blado said.
If the UAW eventually prevails in a unionization vote at Rivian, the company would be required to collectively bargain over issues such as pay and working conditions. Workers would have a formal say in more company decisions, and management would have less discretion over aspects of the business such as benefits, scheduling and safety matters. For some customers, a unionized workforce could help solidify Rivian’s brand as the alternative to Tesla and Musk.
With assistance from Kara Carlson, Ari Natter and Kiel Porter..
