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This is an insightful, thought-provoking article. It mentions Billy Durant, the exciting, visionary entrepreneur who raised goads of money and built GM from a
by cs702 9y ago
This is an insightful, thought-provoking article.
It mentions Billy Durant, the exciting, visionary entrepreneur who raised goads of money and built GM from a disruptive startup in 1906 into a company with $10 billion (in today's dollars) in annual car sales by the early 1920's... but who was nonetheless fired by GM's board because, despite the company's rapid growth, it was burning cash and remained dependent on continued capital-raising. The board concluded GM needed someone who could execute a business model, not someone with grand visions who would perpetually need fresh capital to turn them into reality.
The parallels to Tesla's current situation are obvious.
The person who replaced Durant, Alfred P. Sloan Jr., ran GM for three decades with incredible success, turning it into the world's largest automaker.[a] This is the same Sloan as in the Alfred P. Sloan Foundation, MIT's Sloan School of Management, Stanford's Sloan program, and Sloan/Kettering Memorial Cancer Center. (Durant died poor, managing a bowling alley in Flint, Michigan.)
PS. The most interesting aspect of this article, for me, is the fact that it was written and published in the first place. It makes me wonder if the mindset of investors with regards to Tesla is changing from "show me an exciting vision" to "show me profitable execution of a business model."
[a] https://en.wikipedia.org/wiki/Alfred_P._Sloan https://en.wikipedia.org/wiki/Alfred_P._Sloan
- dogma1138 9y agoThe only problem I have with the GM analogy is that GM benefited greatly from WW2, not to mention the reconstruction years after it. In fact GM has essentially even benefited form the German rearmament after the Nazi’s rose to power until essentially the US declaration of war or at least until the revenue payments from Opel stopped crossing the pond.
- cs702 9y agoWhen Sloan took over, GM was 3x smaller than Ford. When Sloan retired, GM was 2.3x bigger than Ford.
- dogma1138 9y agoI’m not saying that Sloan didn’t do wonders he clearly did what I’m saying is that it’s hard to estimate if without WW2 would he had the opportunity to achieve the same outcome. “During World War II, GM led the largest commercial-to-military war production effort in American history. In 1942, the company converted all of factories to produce $12 billion worth of airplanes, trucks, tanks, guns, and shells for the US military.” Before the US got into the war GM supplied a 3rd of the trucks used by the Wehrmacht. https://en.m.wikipedia.org/wiki/Opel_Blitz https://en.m.wikipedia.org/wiki/Opel_Blitz
- iabacu 9y agoWell, the same macro economics / historical factors that helped GM, could’ve helped Ford and others. In particular, other 2/3 of trucks must have come from somewhere.
- dogma1138 9y agoFord didn’t own 2 major subsidiaries in Europe. While GM was buying every company they could get their hands on Forde was too busy with building Fordlândia in the middle of the Brazilian rainforest the best they managed to get is to enter into a partnership with a Russian car company after the Bolsheviks have already gotten into power. I think GM was much better positioned and it much more decisively went all out on war production Ford made cars and engines during the war GM made everything from bullets to machines guns to tanks and bombers.
- sfifs 9y agoMars, Solar city, Boring company, Hyperloop...
- anonu 9y agoThe articles premise is that Durant was prescient enough to turn his horse carriage company into a car company because he knew it was the future.... Then the author tries to make a parallel with cars propelled by gas vs electricity. It's not really a perfect parallel. Don't get me wrong, I'm massively rooting for Elon and Tesla. But it seems to be that the original success of GM was because they were in an industry building things that were 1000x better than the old way of doing things. Tesla doesn't seem to be 1000x... Maybe 10x... Until they have fully self driving cars. So my conclusion is that the electrical car aspect of Tesla is not really the game changer... It's the AI which we have yet to prove out...
- loceng 9y agoCould we argue in comparison that Tesla is benefitting from global warming concerns? In fact Elon's foundation and stated mission is based on this.
- dogma1138 9y agoI don’t think so, GM made billions from the Nazi war machine then made even more at home when the US woke up it transferred all of its production capacity to support the war effort and was paid well for it for years still after the war has ended. I’m simply not seeing the same opportunity for Tesla to make the analogy truly work.
- loceng 9y agoFair enough, perhaps not close or a singular enough source of funds (e.g. the war).
- dogma1138 9y agoit's also important to note that GM managed to make money because of it's production capacity not because of it's technology. So this is essentially the complete opposite of Tesla if you fully buy in into their technological superiority which I'm not entirely sure is actually there, production is their main problem. Gigafactory or not there are many more players that simply dwarf them in this capacity, GM was also a huge company by the 1930's with world wide logistical channels, production facilities and subsidiaries which is exactly what allowed it to take advantage of the war, it helped build the Nazi war machine through Opel, it supplied the Brits through Vauxhall and then it supplied Uncle Sam. If i'll have to imagine some near future ecological disaster that forces us to push even more for solar and energy storage I don't see SolarCity or Tesla I see billions of panels and batteries produced by China and maybe India if it wakes up and decides to stop being just the world's call center and chemist.
- lucas_membrane 9y agoGovernment money is the common component; everything he has done has benefited considerably from government money.
- jammi 9y agoTesla could still benefit greatly from WW3, and so could SpaceX. The tricky thing about future is that nothing's certain.
- dogma1138 9y agoSpaceX is utterly irrelevant to this discussion, Tesla is in no position to benefit from WW3 and I've explained it here: https://news.ycombinator.com/item?id=16893284 https://news.ycombinator.com/item?id=16893284 so I'm not going to type it again, but they have nothing similar to offer to what GM had during WW2.
- cfadvan 9y agoThe beneficiaries of any WWIII would be whatever plants and animals survive the nuclear holocaust, as well as rock and stick vendors.
- gumby 9y agoAs well as "stick as a service" vendors who will make money on both sides of the conflict :-(.
- carlivar 9y agoBut didn't all auto manufacturers benefit from WW2? And didn't GM overtake Ford in market share well before WW2 contracts? If this is just timing, why did GM thrive when Hudson, Packard, Studebaker, and others did not?
- dogma1138 9y agoFord didn’t have 2 major European subsidiaries, one in each side so Henry’s fondness for the Nazi’s was under much bigger scrutiny. Ford also didn’t shift all of their production to war production regardless of type. GM made everything from canned food, helmet liners and ammunition to bombers heck half of the M1919 browning machine guns were produced by GM, same goes for the M1 carbine, GM produced 3.4M out of the 6M produced in WW2 and same goes for nearly every other small arms. To put into perspective IBM yes IBM produced more guns during WW2 than Ford.
- sabareesh 9y agoI am not sure how Tesla's current situation is obvious. There is more demand and not much on inventory. No one has a decent autopilot (Driver assist) close to Tesla and they have hardware ready for level 5 autonomy(or close to) . I feel this is the real luxury to have. They have largest fleet of vehicles passively collecting all the data to achieve self driving.
- dangrossman 9y agoTesla's Autopilot seems to be little more than the same lane keeping and adaptive cruise control everyone else has with the safety tolerances lowered a whole lot, to the detriment of several dead drivers. You can readily buy other cars with the same EyeQ3 board that powered AutoPilot until Tesla's breakup with Mobileye, and their new Nvidia-based clone of it does little more than the original. The _hardware_ for level 5 autonomy is nothing proprietary or impressive, and they've shown zero evidence that the _software_ for level 5 autonomy exists in any state beyond the demo Nvidia hands its DRIVE PX2 customers essentially "out of the box". You're taking their marketing at face value while their EAP/FSD packages have largely been vaporware for 2.5 years now.
- maratd 9y ago> Tesla's Autopilot seems to be little more than the same lane keeping and adaptive cruise control everyone else has with the safety tolerances lowered a whole lot, to the detriment of several dead drivers. It seems that way to you because you haven't used the system. It is not operating with "tolerances lowered a whole lot" or really, at all. > You can readily buy other cars with the same EyeQ3 board that powered AutoPilot until Tesla's breakup with Mobileye, and their new Nvidia-based clone of it does little more than the original. It's quite silly to talk about the hardware when it's obvious that it's the software that will truly differentiate the systems. Tesla's system is much more impressive than anything else on the market because of the software involved for both hardware revisions. It is able to operate in environments where other systems fail and is able to do so reliably on more roads than their competition. > You're taking their marketing at face value while their EAP/FSD packages have largely been vaporware for 2.5 years now. You're correct here, but then again, the same can be said of their competitors.