Guest post by David Middleton
In a stunning setback to Stark Industries’ Tesla Motors’ effort to save the world from Hydra Gorebal Warming, hundreds of workers were fired in an effort to speed up production of the Iron Legion Model 3…
Tesla has reportedly fired hundreds of employees amid signs that the company is off to a slow start in manufacturing its crucial Model 3 electric car.
[…]
But the firings reportedly included engineers, managers, salespeople and factory employees.
The move comes as Tesla is aiming to rapidly expand production of its new mass-market Model 3. CEO Elon Musk had said the company would be making 5,000 cars per week by the end of the year, but that goal appears to be in jeopardy amid early stumbles.
[…]
Musk acknowledged on Oct. 6 that the company was facing “bottlenecks” in Model 3 production. He said Tesla was “diverting resources” to clear up the Model 3 production challenges, which was one factor in the company’s decision to delay its reveal of an electric semi-truck by about three weeks.
The company said in a Securities and Exchange Commission filing on Oct. 2 that “a handful” of its “manufacturing subsystems” have “taken longer to activate than expected.”
When a CEO issues production guidance that he knows to be false…
The Truth Is Catching Up With Tesla
CEO Elon Musk is a visionary, but there is a fine line between setting aggressive goals and misleading shareholders
Charley Grant
Oct. 7, 2017 2:02 p.m. ET
New revelations about Tesla Inc.’s production of the highly anticipated Model 3 sedan should shock, but not surprise, investors.
The Wall Street Journal reported Friday that Tesla has recently been building major portions of the Model 3 by hand. This comes less than a week after Tesla announced it fell short of its third-quarter production guidance of 1,500 cars by more than 80%.
[…]
The WSJ article goes on to say:
“There is a fine line, however, between setting aggressive goals and misleading shareholders.
Tesla is inching closer to that line. Tesla was making three Model 3s on an average day in the third quarter. Mr. Musk should have known in August, when production guidance was reiterated, that the company wasn’t going to produce 1,500 Model 3s by the end of September.”
When a CEO routinely issues production guidance that he knows to be false…
Elon Mush.
All you lot are taken in by omission of facts. Everyone who sought union membership are on the redundancy list.
You may be right. But, if you are, those fired will appeal to the NLRB—and win.
Disney’s reboot of Tailspin has a new character. Mark Beaks. I’m positive he a parody of Elon Musk and other such tech wizards.
I was more sure of this when the big reveal in the episode revealed that his newest project was all sizzle and not even the smell of a steak. And he had taken steps to sabotage the release so the people buying stock would not find out.
https://www.youtube.com/watch?v=XTOCSTE0Swk
Looks like a rebooted Gyro Gearloose. Gyro was/is a technical master engineer.
If anything, Musk and others are pale imitations of Gyro.
No, Gyro is still in the show as Gyro. Though they seem to have taken some inspiration from the character Sheldon on Big Bang Theory for how they portray him. Has poor social skills to say the least.
Peter:
Gyro has been a Donald Duck / Mickey Mouse denizen decades before very recent modern television.
Gyro has always been a madcap wild inventor easily crossing all boundaries between sciences and mechanics.
The base character is Gyro.
Any claims to recent inspiration still stems from the original and ongoing Gyro Gearloose.
One way to solve the UAW unionization push. Throw in a few poor performing managers and engineers for NLRB cover, as the firing to union bust tactic is blatantly illegal and has been since long before I took labor law back in 1975.
You mean the replacements to the replacements to the replacements engineers and managers.
Surely the driverless cars can do that job. Or maybe use the hyperloop to shuttle the few Model 3s back and forth on a revolving loaner basis.
I find the ill-informed Tesla-bashing on this website exasperating. They fired 400 – 700 workers out of 33,000, allegedly for poor performance. Big deal. There are a lot of people waiting for this car who don’t care a fig about CO2
…or about price …..or about delay time…or about safety issues…
Or reliability, or cost of ownership, …
There’s nothing wrong with the cars. I think the bashing is centered around the arrogance of Musk and his subsidy fishing at the peoples’ expense. I don’t care how “legal” it is and don’t buy the axiom that if he didn’t do it someone else would when I’m paying for it. Throw in a shaky economic model …. albeit common for the tech industry …. and you have a whipping post.
The Germans and Chinese will crush him on tech and cost from all sides at once.
markl – you might be right, although I am not sure if “arrogance” is fair. I wonder if the £80 billion the US government spent bailing out GM Ford etc in the noughties would have come in for the same pasting? Surely any sane person would take subsidies where they are offered, so the bashing should be aimed at the politicians doing the offering.
Resourceguy: the Chinese might but the Germans won’t. One of the VW heads admitted in July 2017 that to reach their stated goals on EVs they need about 20 battery gigafactories er, like the one Tesla started building in, er, 2014. You cannot scale EV production without a source of cells far larger than any conventional western automaker currently has available.
You are right about the Chinese though. By 2020 on present trends they will utterly dominate lithium cell production
There is something wrong with the M3. The off set touchscreen with all controls is inherently unsafe. I would not drive nor ride in an M3. Indeed, they should all be painted day glow orange to warn other drivers to stay well away from them, or outlawed altogether.
Ill informed? Tesla S is a $120,000 toy with huge subsidies attached. Solar roof tiles that do not practically exist, financially diverting from EV sizzle to bail out cousin’s failed Solar City. No volume Model 3 yet at a base price of $35k and a likely ‘real’ price over $50k. A Nevada subsidized gigafactory building an obsolete LiIon cylindrical metal form factor instead of pouch cells.
You need to learn the difference between sizzle and steak. Musk is a VC reincarnation of P.T. Barnum. who tried but failed to distinguish humbuggery (his word and book) from outright deception. For publicly traded Tesla, humbuggery is violation of longstanding securities laws.
Yes ristvan: ill-informed
Well, for sure one of us is. Time will tell which. My short is now firmly in place. And your long?
It was Tesla that made it public. These “firings” were just an act of desperate distraction. With the shareholders now sedated, the agony of a non-selling car may continue for a while.
I find it fascinating how any criticism is dismissed as “bashing”.
A trollop wanders in,
slinging ad hominems,
dropping condescension and aspersions,
spreading misinformation,
completely without facts.
A) GM received a loan from the Federal Government.
• The total was far less than johnson’s specious £80 billion claim.
• GM turned over 61% equity in stock to the Federal Treasury as compensation and took a loan for the remainder.
• GM paid off the loan, early.
• Obama’s Treasury dumped the remaining GM stock on the market in December 2013. Taking a bath in the process.
U.S. Treasury’s final loss due to bad stock management was $10.2 billion in dollars, not pounds.
B) GM sold 275,552 light vehicles in the USA, during August.
For that matter GM sold an additional 164,996 vehicles in China. GM’s Cadillac brand alone, sold 15,014 vehicles in China.
Tesla is effectively a Ponzi scam; selling stocks to suckers; while spending investor and subsidy cash incredibly fast.
Tesla makes money by selling EV tax credits to other car companies.
Tesla allegedly sell cars by extensive use of subsidies.
Meanwhile Tesla is:
Grossly absurd negative P/E ratios; over five years.
Astounding lopsided debt ratios.
Negative earnings per share.
“TSLA has not issued dividends in more than 1 year”
Heavy anti-Tesla success stock bets.
TSLA Shares Sold Short = 27.06 M
Change from Last Report (issued 2X per month) = -9.74%
Percent of Float = 22.25%
For example; 2.88% of GM’s shares available for trade (float) were sold short for the same period.
Tesla is following the classic robbing Peter to pay Paul pyramid scheme.
Tesla model S; a car driven by rich folk, paid for by middle class folk, driven for FREE on roads paid for by middle class and poor folk, often recharged on the backs of the middle class. ( see your local government building with the “free” charging station)
Kpar commented: “….That seemed to start with jack Welch at GE, but I think the number was 10%. Works OK for the first or second cut, but then you’re getting rid of good people. Long range, very damaging to all but the largest companies…..”
+1, accurate description of the forced regular attrition. Once started the moral goes absolutely in the toilet while people are doing everything to make themselves look good and others look bad. Hard to bring on new hires as the word gets out they’re just looking for fodder to make their 10% goal. It’s part of the “New Age” business ethics to increase productivity. Tesla has always had a history of over promising and under delivering. It’s part of the Silicon Valley culture. Tesla has to succeed on it’s own as there’s no reason for anyone to buy it for its’ manufacturing ability or technical innovation. Over priced cars relying on subsidies to attract/bribe easily infatuated buyers. Their constant hype keeps them alive but eventually catches up with their bottom line and they’ll join the legion of tech companies in the area that have gone from cream of the crop to “what was the name of the company that…..”.
Another factor is that a lot of your best people start quietly shopping there resumes.
Meanwhile the world awaits to hoover up solid state replacements for a box of incendiary 18650s, All s’miles.
Even though this lady is a gay leftie who loves EV’s. This is a fairly well researched media piece.
She gave Tesla’s employee-count as 33,000. If that includes merged-in Solar City employees, as I suspect, it’s misleading.
Solar City is not affected. My old extensive multi national company did not simply remove “dead wood” across the whole board. Neither did it pick on one subject matter while choosing who leaves. So any complaint to the NLRB (as yours is) would be moot in law.
.
Tesla will have issues in the future which will make this niggle pale into insignificance. Due to their operating structure, the unreliability record, the closed servicing/resale ethos, the humongous depreciation and competition. All affecting the fandom.
“Solar City is not affected. … So any complaint to the NLRB (as yours is) would be moot in law.”
I didn’t say or imply anything about complaining to the NLRB. My point was that the presenter in the video upped that Tesla employee count by including SC workers, making it look (misleadingly) as though the firings of 700 were only a small percentage of the workforce, instead of a large one.
Vv
Shameful that Tesla would fire employees when it receives government subsidies for this electric car. Seems counterintuitive when they need experienced workers to meet their 5000 per week production quota. Close the operation down. A electric car many of us simply cannot afford. Stupid and silly to prop-up this sort of wasteful government spending. Let the venture capitalist come in and provide these operating funds.
Enron Musk?
That’s his big brother. He has a sister named Jovan Musk who has her own line of fragrances.
(sorry, couldn’t stop myself)
Looks like Tucker all over again.
Tucker:
https://youtu.be/9lphrw69lcQ
Naw.
Tucker had a great idea and was far ahead of his time, it was the Industry that managed to shut Him down fearing that he could shut them down by producing a better car.
Consider that of 51 cars made, 47 are still on the road.
Interesting, I didn’t know that. Also interestingly, if you go to Cofer Brothers in Tucker GA you can see three of them, all still running.
There has always been a huge problem at Tesla. Anyone can build a single car. hell, I could build a car. people have been doing it for years, building new cars out of assorted parts.
The problem is this – to reduce costs cars must be built and sold in bulk – then the costs for the company can be amortized out over a lot of product. However, there is a lot of stuff that goes into the supply chain, so you need to bulk up everything. You know who is really good at bulking up supply chains? Existing car companies.
Tesla is trying to beat ford, GM, and Toyota at a game they mastered a century ago. They may have better tech, but seriously, the tech is the easy stuff. Build cars in bulk is very, very hard.
What Tesla needs to do, right now, is stop trying to build mass numbers of cheap cars, and focus only on expensive cars built in small numbers to exacting standards. Then license your technology to any and all car companies. Sell them batteries, drive trains, whatever. Become the Motorola or AC Delco of the car industry. Focus on the charging network and making sure all new electric cars are serviced by it.
If they do that, quickly, maybe they have a chance.
In the world of gross revenue (do auto companies even make money?) there is a simple equation.
Price per car x number of cars = gross revenue
At 3 cars per day Tesla will never make enough money to be a major auto manufacturer, which I believe is their goal.
3 x 365 x $30,000 = $32,850,000
“Steve from Rockwood October 16, 2017 at 3:56 pm”
Note sure, as it costs vast amounts to tool up for car making. When in the early 90’s Vauxhall (GM) in the UK tooled up to make the Corsa (Holden Barina in Australia) they spent GBP6mil before they sold a single car. I know Nissan received substantial Govn’t subsidies in the 80’s to setup shop, Honda probably did too. Toyota here in Aus during the Kevin Rudd years received over AU$75mil to help develop an Australian made hybrid. That year, IIRC, Toyota made a profit of about the same amount. So I am sure car makers make money one way or another.
Yes, these guys (Jaguar) made an EV Jaguar E Type which is an abomination in many ways but also a work of art. Certainly not cheap!
http://media.jaguar.com/news/2017/09/jaguar-e-type-zero-most-beautiful-electric-car-world?q=&start=0&brand=jaguar
exactly – make fewer, better, more unique cars. This idea of competing in mass manufacturing…not going to happen.
I hope not. Tesla model S; a car driven by rich folk, paid for by middle class folk, driven for FREE on roads paid for by middle class and poor folk, often recharged on the backs of the middle class. ( see your local government building with the “free” charging station)
Hilariously, the other day the Washington Post was proclaiming that the Tesla 3’s would help usher in the end of the combustion engine https://www.washingtonpost.com/news/innovations/wp/2017/10/11/why-2017-will-go-down-as-the-beginning-of-the-end-of-the-internal-combustion-engine/
The model 3 using 120 volt service requires 54 hours to fully charge the battery. More than9 hours with 240 service. Better have more than 120 volt service available……
Most people have 240V service.
but the demographic Tesla is aiming at for its mass market push are those people living in multi-unit dwellings in the gentrified cities, those are the places where people do not have 240V service, much less having 120V outlets nearby to where their Model3 will be parked. Can all those folks conveniently take their cars to a public charging station? And where is the cost savings for them if they have to pay at a charge station rather than through their own electric bill?
If you want to truly recharge overnight, you will need either 480V or two parallel 240v services.
For many people 9 hours may not be enough
The faster you charge the battery, the shorter it’s life will be.
This is what happens when a bunch of millennials are hired to build cars. Should have made it in China. They would pump out thousands of those cars with no problem and no Complaints.
No complaints? My car won’t start. Oh stop complaining.
But who wants a car with “Made in China” stickers all over it
Probably the same people who a generation ago eagerly bought cars with a Made in Japan sticker.
Here’s a brief news article about the event on the financial site Seeking Alpha. There are 676 comments on it, so there are likely a few pearls among them.
https://seekingalpha.com/news/3301056-report-tesla-fired-hundreds-california-employees-past-week
Here’s an article from just before the news (3 days ago), “Elon Musk Appears To Be Taking Investors For Fools”. It has 435 comments, again likely including a few pearls.
https://seekingalpha.com/article/4113381-elon-musk-appears-taking-investors-fools
6 months ago…
https://seekingalpha.com/article/4056331-tesla-bankruptcy-chances-increased-exponentially-capital-raise
@roger and David. Interesting Seekingalpha articles. Why do I keep thinking of John DeLorean?
Why do I keep thinking Tony Stark?
The main problem with DeLorean was where and who he chose to build the thing.
Why do I think of Ken Lay?
http://monopoly.wikia.com/wiki/Go_to_Jail_(card)
“Didn’t pass Go, do not collect 200 subsidies.”
USA TODAY
“Tesla has reportedly fired hundreds of employees amid signs that the company is off to a slow start in manufacturing its crucial Model 3 electric car.”
So much for all those new green jobs the green goblins promised.
(Isn’t Telsla in CA? What has Governor Moonbeam said about this? All those fired were not illegal immigrants so no problem?)
PS If that is not USA TODAYS exact quote, sorry.
Earlier this year bought a 2012 Mitsubishi MiEV with 12k miles at an auction. Living in rural Michigan, very few bid on it so I got it for a song with 5 years left on the battery warranty. I use it to drive to work and back to save miles and wear on my 2016 Ram 1500, but it’s also cheap to drive and fun actually. If it doesn’t work out I could always sell it for a nice profit to a more planet loving person than me in Ann Arbor who wants to save the planet. For now it’s a fun experiment.
If Tesla flops perhaps that will diminish enthusiasm for otherwise purported green breakthroughs. It should cause a pause in the current green bandwagon toward EVs.
I for one want to believe in Elon Musk being a true forward thinking entrepreneur. However when one spreads themselves (and their shareholders money) so thinly, and when the Model3 is screaming “big out of control problems”, I think South Seas Bubble, Ponzi etc. It looks like the “old treat you like a Mushroom” as in keep you in the dark and feed you s**t.
I hope his next investment is not a Snake Oil Farm!!!
Elon has schemed lots of money from taxpayers and investors (read: suckers) to tackle the hard wall limits of physics. The wall is winning…
Elon Musk may have a lot of great ideas. They look wonderful on paper, don’t they? Yeah, but production is reality. Daydreams are cheap. Reality costs real money, and producing the daydreams is reality.
So far, Elon Musk hasn’t done a whole lot more than act like a sideshow carney barker. His production rate is a fail. He’s ditched people because they cost money to keep on the line (reality), which may mean he’s looking at cheaper labor (less or no experience), but he has NOT met his obligations to people who put a deposit on a vehicle and are now wanting their deposits returned to them (reality).
I’m glad that so much research has been done on improvements in internal combustion engines because gas prices at the pump are not going to return to the 1960s levels of $.259 to $.359/gallon (for regular) and it does save me money. This is a big plus for me.
But Elon Musk doesn’t seem to understand that the real world is like me: we expect results and he is not providing them.
When you factor in inflation, gas prices have gotten pretty close to the level they were in the 60’s several times in the last decade or so.