4 ms·

Weeellll, except for that $30B loss from 2006-2008 [1] leading to them taking a $5.9B government "loan" in 2009. (It should also be noted that while not directl

Weeellll, except for that $30B loss from 2006-2008 [1] leading to them taking a $5.9B government "loan" in 2009. (It should also be noted that while not directly dipping into the $80B bailout pot, Ford told Congress that not bailing out other companies threatened Ford's continued existence. [2]) Plus they were second only to Toyota in the amount of money they drew from cash-for-clunkers - not exactly standing on their own two feet. The ship has been righted for now, but it was pretty good in 2000 as well. [1] http://mobile.reuters.com/article/idUSTRE70R0S420110128 http://mobile.reuters.com/article/idUSTRE70R0S420110128 [2] http://www.factcheck.org/2011/09/ford-motor-co-does-u-turn-on-bailouts/ http://www.factcheck.org/2011/09/ford-motor-co-does-u-turn-o...

kartD 10y ago
Well Tesla also relies on government subsidies as well a loan (which it paid back early, as did Ford). Also Ford is more than a 100 years old, so it's bound to have a bad period. We'll have to see what happens when tech companies are that old ( or will they even survive)
- sp527 10y ago
  So what we're concluding is that a company has difficulty remaining competitive unless it fully abuses the system within which it operates? Hmm...
  - jkestner 10y ago
    Abuses? How about "utilizes"? The subsidy is there to get more electric vehicles on the road.
    - sp527 10y ago
      I don't trust the government to manipulate the free market efficiently. It's comprised of hapless morons who don't know what they're doing and whose favor is for sale to the highest bidder. Case in point are the tremendous number of bankrupt alternative energy companies built upon favorable treatment by the government. Market intervention doesn't suddenly become justifiable simply because the outcome of advancing the sustainability agenda is positive.
      - danhak 10y ago
        > Case in point are the tremendous number of bankrupt alternative energy companies built upon favorable treatment by the government That's like saying the top VC firms are all inept because most of the startups they fund fail. It has often been the role of our government to make risky bets in order to advance step-changes in our society's progress. Those bets have resulted in such things as spaceflight, modern telecommunications, lasers and the internet to name just a few. If Tesla indeed transforms the world as they are poised to do, their success will far exceed the cumulative failures of Solyndra and the like. Not to mention, Tesla's competition are subsidized in many ways, most of which are more subtle than the tax credits for alternative fuels that you allude to. Failure to price in the health and climate externalities of fossil fuels amounts to subsidy, as do the trillions of dollars spent on overseas entanglements to secure fossil fuel supplies.
        sp527 10y ago
        DARPA et al do not represent an analogous scenario. As for portfolio theory: I'm not questioning something that fundamental. I'm saying the government has little to no hope of deploying it efficiently. If you had a technocracy of highly intelligent people perfectly resilient to corruption, then this might be a different story. And if you know anything about VC, you know that there's a long tail of failing ones that underperform standard benchmarks (you probably do know; that's why you said "top VCs"). Also, if you want to view USG market interventionism as an aggregate portfolio, guess which way that's going to go. I love it when people champion entities like Tesla benefiting from incentive structures when it's conveniently aligned with their personal beliefs about the superiority of the tech industry, their political agendas, and/or the idolzation of people like Musk, but forget that there's a far broader and more insidious reality here. Reply to Below: Not libertarian. I believe strongly in government regulations where appropriate and that limiting our personal liberties in certain ways is essential to guaranteeing economic and physical security. I happen to agree with the sustainability agenda as well. I disagree with the mechanism being employed to advance it. USG should instead focus on taxing/penalizing for carbon emissions as a negative externality, which would have an ancillary benefit of making alternative energy companies overall more competitive. Asking the government to make decisions about structuring incentives, by contrast, is positively asinine (you get things like ethanol). Furthermore, I have a serious problem with the government deploying tax dollars to directly benefit corporations when there is no immediate and tangible return, regardless of the context.
    - deleted 10y ago
      [deleted]
    - ams6110 10y ago
      More electric vehicles will get on the road when there is a realistic economic rationale to buy them. Without the subsidy, an $80,000 car that can only go 200 miles is a lot less appealing.
      - sgc 10y ago
        Hence they are subsidized. People with a bit of forward vision realize that without an economic incentive today, there may not be an economic rationale tomorrow, since the technology will not miraculously develop itself.
        tigroferoce 10y ago
        What I think people do not realise is that incentives to adopt cleaner car are just one side of a coin. The alternative would be making petrol-car drivers paying for the actual costs of cars including healthcare for diseases related with pollution, possibly at any level of the production chain and so on. Hidden costs are often cut away and offloaded on community (I couldn't find anything specifically related with cars (didn't have time to look for), but for comparison here's a short video that shows the real costs of meat https://www.youtube.com/watch?v=uZDsSnpYZrw https://www.youtube.com/watch?v=uZDsSnpYZrw). Incentives make it a little bit more explicit. While it may be true claiming that Teslas cost would be higher without incentives, for sure Ford's car would be way more expensive if everything had been taken into account.
        sp527 10y ago
        Exactly. Maybe I should have been more clear earlier that I'm referring to incentives- driven intervention. Penalizing companies for the negative externalities they inflict on society is practically a first principle of good governance, and USG has failed dramatically. What's sad is that so many people seem to take an all-or-nothing stance on this politically. Either laissez faire or nanny state. Moderation is a dying art.
        tigroferoce 10y ago

kartD 10y ago

Well Tesla also relies on government subsidies as well a loan (which it paid back early, as did Ford). Also Ford is more than a 100 years old, so it's bound to have a bad period. We'll have to see what happens when tech companies are that old ( or will they even survive)

sp527 10y ago
So what we're concluding is that a company has difficulty remaining competitive unless it fully abuses the system within which it operates? Hmm...
- jkestner 10y ago
  Abuses? How about "utilizes"? The subsidy is there to get more electric vehicles on the road.
  - sp527 10y ago
    I don't trust the government to manipulate the free market efficiently. It's comprised of hapless morons who don't know what they're doing and whose favor is for sale to the highest bidder. Case in point are the tremendous number of bankrupt alternative energy companies built upon favorable treatment by the government. Market intervention doesn't suddenly become justifiable simply because the outcome of advancing the sustainability agenda is positive.
    - danhak 10y ago
      > Case in point are the tremendous number of bankrupt alternative energy companies built upon favorable treatment by the government That's like saying the top VC firms are all inept because most of the startups they fund fail. It has often been the role of our government to make risky bets in order to advance step-changes in our society's progress. Those bets have resulted in such things as spaceflight, modern telecommunications, lasers and the internet to name just a few. If Tesla indeed transforms the world as they are poised to do, their success will far exceed the cumulative failures of Solyndra and the like. Not to mention, Tesla's competition are subsidized in many ways, most of which are more subtle than the tax credits for alternative fuels that you allude to. Failure to price in the health and climate externalities of fossil fuels amounts to subsidy, as do the trillions of dollars spent on overseas entanglements to secure fossil fuel supplies.
      - sp527 10y ago
        DARPA et al do not represent an analogous scenario. As for portfolio theory: I'm not questioning something that fundamental. I'm saying the government has little to no hope of deploying it efficiently. If you had a technocracy of highly intelligent people perfectly resilient to corruption, then this might be a different story. And if you know anything about VC, you know that there's a long tail of failing ones that underperform standard benchmarks (you probably do know; that's why you said "top VCs"). Also, if you want to view USG market interventionism as an aggregate portfolio, guess which way that's going to go. I love it when people champion entities like Tesla benefiting from incentive structures when it's conveniently aligned with their personal beliefs about the superiority of the tech industry, their political agendas, and/or the idolzation of people like Musk, but forget that there's a far broader and more insidious reality here. Reply to Below: Not libertarian. I believe strongly in government regulations where appropriate and that limiting our personal liberties in certain ways is essential to guaranteeing economic and physical security. I happen to agree with the sustainability agenda as well. I disagree with the mechanism being employed to advance it. USG should instead focus on taxing/penalizing for carbon emissions as a negative externality, which would have an ancillary benefit of making alternative energy companies overall more competitive. Asking the government to make decisions about structuring incentives, by contrast, is positively asinine (you get things like ethanol). Furthermore, I have a serious problem with the government deploying tax dollars to directly benefit corporations when there is no immediate and tangible return, regardless of the context.
  - deleted 10y ago
    [deleted]
  - ams6110 10y ago
    More electric vehicles will get on the road when there is a realistic economic rationale to buy them. Without the subsidy, an $80,000 car that can only go 200 miles is a lot less appealing.
    - sgc 10y ago
      Hence they are subsidized. People with a bit of forward vision realize that without an economic incentive today, there may not be an economic rationale tomorrow, since the technology will not miraculously develop itself.
      - tigroferoce 10y ago
        What I think people do not realise is that incentives to adopt cleaner car are just one side of a coin. The alternative would be making petrol-car drivers paying for the actual costs of cars including healthcare for diseases related with pollution, possibly at any level of the production chain and so on. Hidden costs are often cut away and offloaded on community (I couldn't find anything specifically related with cars (didn't have time to look for), but for comparison here's a short video that shows the real costs of meat https://www.youtube.com/watch?v=uZDsSnpYZrw https://www.youtube.com/watch?v=uZDsSnpYZrw). Incentives make it a little bit more explicit. While it may be true claiming that Teslas cost would be higher without incentives, for sure Ford's car would be way more expensive if everything had been taken into account.
        sp527 10y ago
        Exactly. Maybe I should have been more clear earlier that I'm referring to incentives- driven intervention. Penalizing companies for the negative externalities they inflict on society is practically a first principle of good governance, and USG has failed dramatically. What's sad is that so many people seem to take an all-or-nothing stance on this politically. Either laissez faire or nanny state. Moderation is a dying art.
        tigroferoce 10y ago