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* I had my doubts about this project. Heck, even Gov. Rauner repeatedly belittled the idea that Rivian would amount to anything. But…
General Motors and Amazon are in talks about investing in electric-vehicle-maker Rivian Automotive, which has a manufacturing plant in central Illinois, in a deal valuing the startup at $1 billion to $2 billion, said people familiar with the matter.
The Plymouth, Michigan-based startup is working on an electric pickup and SUV that would be built at its plant in Normal. Concept versions of the vehicles debuted at the Los Angeles Auto Show in November. Talks are progressing, and a deal could be announced as soon as Friday, said one of the people, who asked not to be identified because the negotiations are private.
Trucks and SUVs are gas-guzzling cash cows for Detroit automakers. An investment in Rivian could help GM get an electric pickup to market faster and help ward off upstarts such as Tesla. For Amazon, investing in Rivian would signal an ambition to shift a portion of the massive vehicle fleet that delivers its packages to zero-emission vehicles.
“Rivian is being cast in the same light as Tesla, a startup that’s outside the inner circle of the auto industry, and that’s appealing to GM,” said Jeff Schuster, senior vice president of forecasting at researcher LMC Automotive. “GM could clearly do an electric pickup itself — it has the technology and a strong base of pickup buyers. But they don’t have Rivian’s image and separation.”
posted by Rich Miller
Wednesday, Feb 13, 19 @ 11:25 am
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Previous Post: *** UPDATED x1 *** Restaurant Association takes heat for minimum wage deal
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R1T prices expected to start at$61k for an entry level truck. Sounds like its built for the working poor and middle classes.
Comment by Blue Dog Dem Wednesday, Feb 13, 19 @ 11:38 am
I can’t find it anywhere. Has Rivian ever entered into an agreement with the UAW?
Comment by Blue Dog Dem Wednesday, Feb 13, 19 @ 11:45 am
Who cares if the idea fails if it is only private money invested in the plant? Businesses that eventually fail still generate jobs and economic activity in the time before they fail. That is just the nature of the market.
Comment by Three Dimensional Checkers Wednesday, Feb 13, 19 @ 11:49 am
The electric market has suffered from a lack of available “vehicles people want”. I applaud Tesla for their gaining of market share for sedans, but that isn’t a type of vehicle that soccer moms, tradespeople, and the general market have been clamoring for. I had my doubts about the up-till-now secretive Rivian plant too, but it looks more promising than a year ago.
Comment by Six Degrees of Separation Wednesday, Feb 13, 19 @ 11:59 am
–“GM could clearly do an electric pickup itself — it has the technology and a strong base of pickup buyers. But they don’t have Rivian’s image and separation.”–
Rivian has an image? Who knew?
Hope there’s something to it, but I’ll believe it when I see the billion-dollar investment on the barrelhead.
Comment by wordslinger Wednesday, Feb 13, 19 @ 12:12 pm
This is really great news
Comment by Dan Johnson Wednesday, Feb 13, 19 @ 12:12 pm
It’s a noble cause but no one ever wants to talk about the lithium, cobalt, and the rare earth elements needed to complete with efficient fossil fuels. The batteries in these vehicles should be vetted in the public sphere.
Let’s hope any cobalt they use doesn’t come from mines in DRCongo.
And of course, Xi is way ahead of us on this, strategically and regarding supply.
Comment by not so green Wednesday, Feb 13, 19 @ 12:17 pm
GM did well playing outsider before. Anyone remember Saturn? Played a big role in turning the company around.
Comment by Union thug Wednesday, Feb 13, 19 @ 12:30 pm
From pretty much snake oil to possibly legitimate manufacturer. Who woulda thunk?
Seriously, I hope the GM deal goes through. Would be some, maybe many, well paid central Illinois blue collar manufacturing jobs. Short straw f pouting a bunch of tax dollars into it, the State should make sure there are no unneeded regulatory hurdles in the way.
Comment by RNUG Wednesday, Feb 13, 19 @ 12:32 pm
… short of pouring …
Comment by RNUG Wednesday, Feb 13, 19 @ 12:33 pm
Electric feels like a tough road as long as gas stays below $3/gallon. Any investment of a billion is welcome in Illinois, but how far will it go if electric doesn’t grow exponentially.
Comment by SSL Wednesday, Feb 13, 19 @ 12:37 pm
From “driving on corn forever” (ADM) to driving on wind and sun forever. This will do nothing for the price of corn or making the dead, eutrophic zone in the Gulf any worse, courtesy of IL corn. Now I got to convince my electric coop to get on wind and off the coal.
Comment by vole Wednesday, Feb 13, 19 @ 12:41 pm
I don’t understand Schuster’s explanation of the strategy here. Why does GM need Rivian’s image and separation? Does Rivian even have an image? Wouldn’t GM get more buyers if it was a GM product , compared to an unknown name?
Comment by Da Big Bad Wolf Wednesday, Feb 13, 19 @ 12:52 pm
==Let’s hope any cobalt they use doesn’t come from mines in DRCongo.==
There’s a large cobalt mine in Idaho.
Comment by Da Big Bad Wolf Wednesday, Feb 13, 19 @ 12:54 pm
I’d be surprised if the net emissions from mining a small amount of lithium outweigh the emissions from replacing one gas guzzling SUV or truck with an electric vehicle.
This is good for Central Illinois. As long as Rivian follows the law and does not create some huge externality, the state should stay out of the way and let them do their thing.
Comment by Three Dimensional Checkers Wednesday, Feb 13, 19 @ 1:02 pm
Back in the 1930’s, Southern states also argued for a lower federal minimum wage for Southern states because of differences in cost-of-living.
As business groups love to point out, Florida, Texas, Tennessee and South Carolina are doing just fine under the current system.
Everyone - including especially proponents - seem to be missing out on the point that while we are discussing raising the minimum wage, the reason is fundamentally different than the rationale for the minimum wage 90 years ago. Roosevelt wanted to establish a base wage to purchase necessities like food, shelter and clothing so people didnt starve to death and freeze to death while holding a job, and the 35 hour work week was meant to expand employment by requiring companies to hire more people.
The purpose of the current push is to establish a lving wage that puts the American Dream within reach for working families. That’s more than just a loaf of white bread or can of soup, the kinds of purchases the CPI is based on. It also means being able to save enough out of your paycheck each week to afford a downpayment on a house some day, or send your kids to college, or retire with dignity. Last time I checked, retiring to Florida costs the same no matter what part of the state you live in, so does sending your kid to U of I, and if you are buying a House they dont give you a discount just because you are from Peoria.
Comment by Thomas Paine Wednesday, Feb 13, 19 @ 1:19 pm
I still have my doubts about the project. Rivian’s actual product still remains so much vaporware, there’s no real insight into their technology or developmental milestones (say, as compared to VW’s MEB platform), they’ve leveraged incentives, the story cites purely anonymous sources and leads with the dollar amounts as a pretty obvious buzz-generator…
I want Rivian to be viable, and I think this is probably a net positive development. But even if they’re totally legitimate I still wouldn’t invest in them at this stage, and I won’t be stunned if they dry up.
Comment by Threepwood Wednesday, Feb 13, 19 @ 1:39 pm
GovJunk did not “belittle” the car maker. He paid so little attention to his many media stunts that he could not remember them.
Comment by Annonin' Wednesday, Feb 13, 19 @ 1:55 pm
First
1. Why does Rivian HAVE to sign an agreement with the UAW? Maybe a lil free enterprise is good for the auto sector
2. The State is exactly why this project stayed here and they chose Normal. Incentives were all built upon investment and job numbers
3. Rich I agree, I had doubts, but like our new Gov, let’s not bash something that is visionary and breaking the mold. Illinois needs this
Comment by Beacon of Hope Wednesday, Feb 13, 19 @ 2:43 pm
The SJR calling Tesla a startup is a poor characterization. They sold 245,000 vehicles in 2018 in the US, they are established, not a startup anymore.
https://www.cnbc.com/2019/01/08/teslas-model-3-was-2018s-best-selling-luxury-car-in-us.html
Rivian is a startup.
Comment by Siriusly Wednesday, Feb 13, 19 @ 3:53 pm
Beacon@2:43 “Why does Rivian HAVE to sign an agreement with the UAW? Maybe a lil free enterprise is good for the auto sector.”
So I assume you are ok with each investor bargaining separately with each employee for how much of the investor-dividend should be given to the worker in salary or wages?
Oh I thought not. Why do governments grant a privilege of incorporation to capital but leave labor to bargain as individuals who can be whip-sawed at will?
That’s just a blatant double standard. What’s “free enterprise” for the goose should be “free enterprise” for the gander.
Actually, if you wanted equal free enterprise you would require corporations to bargain for labor ONLY with likewise incorporated labor Unions, which is close to the German system. If you don’t want to be regulated in this manner, that’s ok too. You can simply forgo the privilege of incorporation and operate as a partnership. You can pay the individual tax rate too.
Oh speaking of Germany and its labor unions, which economy is more productive, which produces a higher standard of living, and which creates happier people?
Comment by histprof Wednesday, Feb 13, 19 @ 3:59 pm
I remain skeptical, but this is potentially really good news.
Comment by Chicago Cynic Wednesday, Feb 13, 19 @ 4:38 pm
This won’t hurt Illinois, so good news.
Comment by Anonymous Wednesday, Feb 13, 19 @ 5:08 pm
HistProf. I dont disagree with much of your argument, but life in Germany is not utopia. 40 to 45% income tax. 19% vat. Happiness is very arbitrary. Especially when you have never seen an alternative. I will take the usa all day and everyday.
Comment by Blue Dog Dem Wednesday, Feb 13, 19 @ 8:54 pm
==Why does Rivian HAVE to sign an agreement with the UAW?==
Only if Rivian’s fifty or so employees vote to have UAW represent them.
==Maybe a lil free enterprise is good for the auto sector==
Maybe. Rivian’s should return their one million dollar grant, their five year tax abatement and their 49.2 million tax credits and give it a whirl.
Comment by Da Big Bad Wolf Thursday, Feb 14, 19 @ 6:14 am