Rivian shares drop after electric vehicle maker slashes its production target

Rivian Automotive shares tumbled after the automaker cut its annual production target, citing a worsening supply crunch at its lone U.S. assembly plant.

The Irvine-based company now expects production to drop as much as 18% this year, due to an ongoing shortage of a component used to make its electric pickups, sport utility vehicles and commercial vans. Third quarter output and deliveries both came up short of analysts estimates.

Rivian’s stock fell 3.2% on Friday and are down about 54% already this year.

The tempered production goal marks the latest setback for a company that’s already been contending with multiple supply chain snags and a broader slowdown in consumer demand for EVs. A component shortage forced the manufacturer to pause production of the commercial van it makes for Amazon.com Inc. in August.

Rivian said it now expects to make 47,000 to 49,000 EVs this year, down from an earlier projection of 57,000 that was roughly in line with last year’s output. The company still expects to increase annual deliveries by a low single-digit percentage.

Chief Executive Officer RJ Scaringe last month acknowledged the company was contending with “a couple” of challenging supplier issues and specifically referred to EV motors that Rivian makes internally.

Rivian delivered 10,018 vehicles during the quarter, its lowest total in a year and a half. The company continues to expect 50,500 to 52,000 deliveries this year.

Spirit Airlines struggles to reach rescue deal

Spirit Airlines’ efforts to restructure its debt and avoid filing for bankruptcy have hit a snag after months of talks with bondholders failed to result in a deal, according to people with knowledge of the matter.

The struggling air carrier is seeking new financing from its creditors, as well as an exchange that would extend its current debt, said the people, asking not to be identified because the talks are private. Terms that still need to be worked out include which assets bondholders would have a claim on and how much new financing would be provided, one of the people said.

Without a deal, the company would be forced into bankruptcy, said the people. While a Chapter 11 filing isn’t imminent, a near-term filing would pose challenges as it would be unclear who would take control.

The Wall Street Journal earlier Thursday reported that Spirit and bondholders have held discussions over the terms of a potential bankruptcy.

Representatives for Spirit as well as advisers Davis Polk Wardwell and Perella Weinberg Partners didn’t respond to requests seeking comment after normal business hours Thursday.

Spirit’s shares sank as much as 38% Friday morning to a record low. The firm’s so-called loyalty bonds about $1 billion of 8% notes due 2025 briefly declined as much as 6 cents on the dollar to 45 cents, according to pricing source Trace.

Boeing machinists to resume negotiations

Boeing Co. is set to resume mediated negotiations on Monday with its largest union in a bid to end a crippling three-week strike by 33,000 factory workers.

The talks will resume at 9 a.m., the International Association of Machinists and Aerospace Workers said in a statement on Friday. The company and the union have been at an impasse since negotiations broke down on Sept. 27.

Compiled from Bloomberg reports.