Just two years ago, Rivians' all-electric cars were just blueprints. American carmakers Ford & GM wanted to invest. Now, Ford has become one of Rivians largest partners along with Amazon. Ford almost lost its spot to GM, but that is what most people don't know.
This Wall Street Journal report reveals some of the clandestine deals in cinematic detail. It also explores how Rivian CEO RJ scaringes bonds with Joe Hinrichs (Fords former president of global operation), and how that bond became the foundation for Fords investment in this company.
According to the WSJ Hinrichs met Scaringe for the first time in 2018. Rivian was not ready for Ford to invest because it had just missed its earnings targets. This allowed GM to continue its work on electric vehicles. According to The WSJ, Rivian's leaders were skeptical about a deal with GM.
After Rivian was bought by Amazon for $700 million, Hinrichs met Scaringe in 2019. After Scaringe claimed that his company was close to a deal, Hinrichs attempted to convince Scaringe to reconsider a Ford deal.
M. Hinrichs expressed concern for the young executive's hesitancy regarding GM and urged him to reconsider. He said that just because you are engaged doesn't mean you have to marry them.
Scaringe was given another opportunity to talk with Hinrichs. They had met in Seattle and Hinrichs offered Scaringe a ride in Ford's Gulfstream jet back to Detroit. Scaringe had not yet signed a contract with GM. Hinrichs and Scaringe made a deal during the flight. Scaringe was able to keep out of the sights of nearby GM executives when they landed.
The plane was heading towards a Ford-GM hangar when executives noticed another jet with two GM-made black Cadillac Escalades nearby as it taxied. Mr. Hinrichs stated that he felt Mr. Scaringe did not want to be seen or photographed by GM executives so Mr Hinrichs asked for a Lincoln Navigator to be pulled alongside the plane. As the door opened, Mr. Scaringe raced down the steps to the Navigator while Mr. Hinrichs loaded their bags.
According to the WSJ, Rivians and Ford continued their talks overnight and reached a deal at 4 AM. Ford announced in April 2019 that it would invest $500m in the startup. Since then, it has invested $1.2 billion.
Stories about how deals work together don't always have the same twists and turns that stories about how they fail. The Wall Street Journal's great piece is a mixture of both and it's a fascinating read. This dramatic story is as captivating as a novel or movie.
