Rivian set to become BN’s 3rd largest employer, creating challenges for growth

As of July 12, Rivian announced that it would employ 2,000 workers at its Normal plant. This is an increase from zero several years ago, and much of the hiring has only been in the past year and a half.

It also positions Rivian’s workforce as roughly equivalent to the 2,034 workers at Country Financial, the third largest employer in the Bloomington-Normal area. That’s according to Economic Development Council data for 2019, the most recent year available.

Over the next year, Rivian’s plans call for a hiring that could exceed 3,319 employees at Illinois State University, currently second on the list of largest community employers behind State Farm.

When a community workforce grows so quickly, most people think growth is positive, but it can come with challenges. The story of Bloomington-Normal can be a guide. The last time the community experienced this level of expansion was when State Farm built its Corporate South complex from 1992-2001, and when production and employment at Mitsubishi Motors peaked in the mid-1990s.

labor

Retired Normal City manager Mark Peterson said labor shortages arose as State Farm and Mitsubishi grew.

“We’ve heard for years that this was a hardship at Bloomington-Normal. Everything from service jobs to more responsible, higher paying jobs, companies have struggled to find employees and then keep them,” said Peterson, adding that this created pressure to raise wages. .

Even that was sometimes not enough.

“A good friend of mine who ran a restaurant said to me, ‘I’m going to get an employee to call and say I need time off Friday night. And he looks like you can’t, you have to work. “OK, I quit. And he’s” I’m going to look for another job on Monday. It was so competitive for the workforce, “Peterson said.

Rivian has already had some impact on the employment situation in the Twin Cities. A significant number of people hired by Rivian were already in the community. Peterson said this also happened during the boom years at State Farm and Mitsubishi. Peterson is currently Acting General Manager of Connect Transit, Bloomington-Normal’s public bus service.

“We have great difficulty in hiring employees. And he’s a good employer; pays well, great benefits. We have lost a number of current employees to Rivian. Good for them. made it difficult to hire. For example, we are still looking for drivers. We recently hired four or five and they were due to start and only one of them showed up. We know some of them got the call from Rivian, ”Peterson said.

Rivian said last month it could reach 3,000 to 4,000 employees by the end of 2022.

“This is going to have a profound impact on our local workforce as well as the regional workforce,” said Peterson.

Municipal service

Growth creates demand for urban services. As new homes are built, water, sewage, and other utilities need to be expanded.

“You felt it in some departments, the inspection department for example, the enforcement of the code. But it has spread to all kinds of things – engineering, everything to do with land use planning. had an impact, ”Peterson said.

The town of Normal reported considerable time commitments from inspectors who had to approve the 800,000 square foot expansion of the Rivian plant. The old Mitsubishi plant was approximately 200,000 square feet.

Education

Peterson said schools also faced challenges during these years of State Farm expansion when the student population grew.

“They don’t benefit from increased economic activity like municipalities do. They do not collect sales tax. It has actually become more difficult for schools to manage this growth than for other local governments, ”said Peterson.

Districts such as Unit 5 built new schools around this time. That in itself has created a challenge, deciding where to place buildings that will remain relevant for generations, as the makeup of neighborhoods changes as families age and move. Peterson said he believes Unit 5 was absolutely right in this planning process. At one point, there was even serious talk of a third high school, although this declined as the community’s expansion slowed.

Currently Unit 5 has no plans for expansion, although secondary schools may be near capacity limits depending on whether you talk to teachers or administration. Peterson said the district could potentially consider expanding its facilities if Rivian’s growth continues or if other growth occurs in the community associated with the electric vehicle industry.

“At some point you have to do something,” he said.

The political landscape

The idea of ​​municipal debt has been a hot political topic during the last two rounds of municipal elections in Normal. But its significance as a political issue may have been heightened by unusual expectations for any town and city created during the happy days of State Farm and Mitsubishi’s employment.

“The standard hasn’t been in debt for a while and it’s not financial science fiction. We have seen 10-12-14% growth in sales tax revenue each year. keeping our pension obligations where they needed to be and that was being boosted by this economy which was only buzzing and growing, ”said Peterson. “Now when Mitsubishi closed and State Farm started to contract, we saw it.”

Culture

Peterson said the Mitsubishi plant brought the necessary diversity to the county due to the Japanese-based multinational corporation that owned the plant. State Farm’s expansion has created demand for music, art, and other cultural offerings and the resources to invest in them. Peterson noted that the addition of the Bloomington Center for the Performing Arts, Children’s Discovery Museum and downtown to the community can be attributed to the expansion of State Farm.

“This provides resources for communities and other groups to invest in cultural facilities and programs, and then when the going gets tough, these are some of the first places businesses cut. Certainly, this is an area where city governments have cut, ”said Peterson, who hopes the community will return to a growth pattern, this will generate additional resources that communities can reinvest in cultural opportunities.

Uncertainty

Mitsubishi has played a “huge and positive” role in the regional economy for more than three decades. Peterson recognized that the auto industry is cyclical. The electric vehicle component of this industry is growing rapidly around the world, but it is also very competitive and the long-term successes remain to be written.

Peterson said the lesson from Mitsubishi’s growth is that communities should take this opportunity to diversify the economy as much as possible.

“And I think Rivian offers an opportunity to attract industries which may be technological in nature, but which are not as cyclical as the auto industry, which may have similar labor needs, but that belong to different industries, so we don’t all have our eggs. in one, two or three baskets, ”Peterson said.