Tesla Buys Michigan Auto Supplier Riviera Tool

MAY 7 2015 BY ERIC LOVEDAY 22

Tesla isn’t allowed to sell its cars in the state of Michigan, but apparently the state has no problem with Tesla acquiring a Grand Rapids, Michigan-based automotive supplier.

As the Detroit Free Press reports:

Tesla Motors is acquiring a Grand Rapids-based auto supplier, giving the Silicon Valley technology company a manufacturing presence in Michigan, the Free Press has learned.

Tesla reached a deal to acquire Riviera Tool, marking the first acquisition for the burgeoning electric-vehicle and battery manufacturer, said a person familiar with the matter.

Riviera, which makes stamping parts that are shipped to Tesla’s assembly plant in Fremont, Calif., has about 100 employees. Tesla is expected to retain those workers and eventually rename the operation Tesla Tool & Die, said the source who is not authorized to speak publicly about the transaction.

Screen Capture Of Riviera Tool Website

Screen Capture Of Riviera Tool Website

Though its acquiring Riviera Tool, Tesla is expected to continue its supply deal with the other stamping companies it currently works with.

Karl Brauer, a senior analyst at Kelley Blue Book, stated:

“Tesla’s aggressive volume goal for 2015 has the automaker working overtime to secure sufficient production capacity. Purchasing a Michigan-based tool and die company illustrates Tesla’s need for a capable and dedicated manufacturing partner. It could represent the first of many such acquisitions we’ll see in the months ahead.”

It’s long been known that Tesla has had issues with various suppliers who are unwilling to ramp up production as quickly as Tesla asks of them.ย  This move, along with others acquisitions that are expected over the coming months, could allow Tesla to expand production at the rate it requires.

Tesla joins the Detroit Three and several other automakers who have at least one manufacturing facility in the state of Michigan.

Source: Detroit Free Press

Categories: Tesla

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22 Comments on "Tesla Buys Michigan Auto Supplier Riviera Tool"

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mhpr262

Which stamped parts exactly are they producing? When I watched the various videos about the building process of the Model S at the NUMMI plant it seemed to me they are doing all that in-house. After all they have a few of the biggest stamping presses in the world. That is a long way to ship such bulky parts, from Michigan to California.

Goaterguy

The article states “โ€œTeslaโ€™s aggressive volume goal for 2015 has the automaker working overtime to secure sufficient production capacity.:
So I think is related to the Model X and eventually the III.
Shipping cost should be negligible compared to the costs of expanding the plant in California.

Good move for an American company.

Tesla should pick up another car assembly plant in Michigan too to expand production. The suppliers, workers, and know-how is already there.

ffbj

Maybe in the future, but Tesla needs to show now that they can be more cautious with their cash and not continue to spend money like a drunken sailor.

pjwood1

A stamping facility in MI can also easily be resold back into the Detroit market. No harm being a little defensive, when Morgan Stanley is out there commenting on “eyewatering” cash outflows.

Ocean Railroader

If Tesla owns a factory in Michigan that hires hundreds of workers then Michigan will be more willing to legalize sales.

G2

Concur!

Lensman

As you say, Tesla’s Fremont plant (formerly the NUMMI plant) has its own giant aluminum stamping machines, for forming the Model S bodies. Here’s a photo:

Presumably the stamped parts made at Riviera Tool are smaller parts, more suitable for interstate shipping. And altho the Model S has an aluminum body, I imagine it contains some smaller stamped steel parts.

CDAVIS

Riviera Tool is a tooling/die maker; they make the tooling/die modules that mates to the giant aluminum stamping machines at the Tesla Fremont plant. Said another way, Rivera Tool makes the parts that makes the parts.

Mike I

This. The story even says the company is to be renamed “Tesla Tool & Die”. How is it not obvious that this is a tooling maker, not a “parts that go in the car” maker?

Nate Crawford

I read this as Riviera makes the stamping dies, not the final stamped parts. Tesla would use the dies in other factories.

Steven

Not the actual parts, but the dies that do the stamping.

Hence “tool and die”.

Anon

All good things…

QCO

It’s a significant supply chain build/buy decision, but has nothing to do with selling cars in Michigan.

However, it could be used in the future to pressure Michigan to change the law blocking sales (working against local jobs, economy, etc…). A similar approach could also help in Texas where the Tesla bill has effectively died, it seems.

Kosh

Now mis-behaving Tesla employees can be transferred to Michigan for punishment… ๐Ÿ™‚

Lensman

Being sent to Detroit: NO, NO, ANYTHING BUT THAT!!

ffbj

I had an Iraqi lady I drove, once she went to visit some cousins in Detroit. When she came back she said: “Detroit No Good.” Clear simple, succinct, and too the point.

Ambulator

I wonder if the company Tesla bought is union? Most in Michigan seem to be.

I wonder if it’s just coincidence that a new Tesla Supercharger station is going in about 5 miles North of Riviera Tool.

Rick Danger

Tesla may have to adopt the Speakeasy, “Joe sent me” sales model in Michigan. ๐Ÿ™‚

CDAVIS

Lol…A side benefit of Tesla acquiring Riviera Tool:

Parent Tesla now owns an established ongoing Michigan situs business that legitimately relates back to Tesla’s core business of selling cars directly to consumers in Michigan. This provides Tesla, vis-a-vis Riviera Tool, technical “legal standing” to file a lawsuit in Michigan with regards to Michigan’s prohibition of Tesla direct selling cars to consumers. The complaint would be filed by Riviera Tool arguing that Rivera Tool is materially injured by Michigan’s prohibition of Tesla selling cars direct in Michigan.

Steven

Hmm… It would be interesting to see if they also take on T&D business for the competition.