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Tesla and SpaceX are businesses and I never understood the public fandom behind them and Elon Musk. 3,500+ people losing their jobs is pretty significant for a
by stevievee 8y ago
Tesla and SpaceX are businesses and I never understood the public fandom behind them and Elon Musk. 3,500+ people losing their jobs is pretty significant for a leader who touts altruism as one of his top motivators.
- jblow 8y agoYou are not going to count all the jobs he created in the first place, and the years of gainful employment those 3500 people had? It’s just all negative in your estimation?
- stevievee 8y agoWhat an oversimplification of my comment. I'll oversimplify it for you so you can't misinterpret it: "This decision he just made is poor and Elon is human just like everyone else"
- djrogers 8y ago> "This decision he just made is poor and Elon is human just like everyone else" How on earth could you possibly know that? It's entirely possible (likely) that not laying off those 3000 people would endanger the ability of Tesla to continue employing the other 30,000 people. Life (and business) is sometimes messy...
- stevievee 8y agoNo, the company has been operating in the red forever. He is bowing to the public markets to make the company's life easier. It was never going to die if he kept these employees.
- rdgthree 8y agoWow, this is huge information. Can you link your source?
- btilly 8y agoThose same public markets were recently trading at 87-88 cents on the dollar. (See http://markets.businessinsider.com/bonds/tesla_incdl-notes_201717-25_regs-bond-2025-usu8810laa18 http://markets.businessinsider.com/bonds/tesla_incdl-notes_2... for verification.) If the markets were assuming that they would recover half of what was owed in bankruptcy, that corresponds to about 1/4 odds of bankruptcy in the next few years. Given that historically markets have been more accurate than any individual commenter, the risk of bankruptcy was quite real. No matter how many Monday morning quarterbacks like you think otherwise.
- stevievee 8y agoSorry, to clarify I am talking equity. Please provide examples now. The snark in this thread is unbelievable.
- btilly 8y agoHere is a quick explanation of how markets work, and why equity is the wrong thing to look at to answer the question asked. Equity prices give you a share in future success. They therefore predict expected future value, pro-rated by the odds of getting there. Bonds give you back money if the company remains in business, and nothing more. Therefore they represent a prediction of odds of going out of business, with no regard to how wonderful the possible upside in the company might be. Tesla's combination of high equity value and low bond value represents a company that has a real chance of becoming dominant in its sector, and also a good chance of cratering instead. You shouldn't invest in a company like that unless you understand why there is a real risk, and are willing to take it.
- jblow 8y agoCan you explain why the decision is poor? Because it results in fewer jobs (but still the same number of jobs Tesla had in early 2018)? Is number of jobs the only metric that determines whether a decision is good or bad? If so that would lead to an entire system of economics that is very different from the one economists know. So if you hold the secret to this vast trove of knowledge, you would be doing a disservice to humanity by not sharing your wisdom.
- stevievee 8y agoI gloss over it in another comment. You may be exaggerating with your sarcasm a bit.
- the_cat_kittles 8y agothe value of those jobs rests on the premise that they created something good. i think the jury is still out on how great tesla's actual products are (aside from entertainment value, which they clearly succeed at)
- TomMarius 8y agoThe value rests on the premise of them getting paid, which I assume they did.
- the_cat_kittles 8y agowhats incredible is the consistency i see this attitude here. you really think the value of job working for a predatory payday lender is the same as a public defender or teacher if they pay the same? i really doubt you do
- joshl32532 8y agoMorality =/= Quality. Working for a company that produces bad products is way better than a company whose product prey on the weak.
- r00fus 8y agoI don't know about you, but I prefer to not to reply to concern-trolling posts - just ignore stevievee.
- vkou 8y agoIt also speaks of a colossal failure in management. Either they were way off the mark in their hiring, or in performance management, or they have unreasonable expectations of their employees. If you are smart at hiring good people, there no way that 9% of them are producing negative value.
- JoshTko 8y agoNot necessarily. Could be a function of the need to scale very quickly, which invariably allows some mediocre people to slip in. A 9% cut sounds reasonable given how fast and how much Tesla needed to scale up in the first place.
- compiler-guy 8y agoOr the world changed around them in unpredictable ways. Or you took a risk that didn't pan out, but if it had, you needed these people.
- vkou 8y agoThat's possible - but has it, though? Are external factors really to blame? Tesla isn't exactly in a Blackberry vs iPhone situation.
- deleted 8y ago[deleted]
- soperj 8y agoYou never understood the fandom behind a company privately launching rockets and landing the boosters? Surely you jest...
- Alwaysbanned 8y agoBut Tesla does neither of those things.
- gniv 8y agoTrue, but the previous comment can be adapted to Tesla: "You never understood the fandom behind a company making cars that can do 0-60 in 2.5s?"
- randysavage 8y agoThey did make electric cars sexy. What would be the state of the EV market today sans Tesla?
- jimmaswell 8y agoIt's been particularly trendy to bash corporations/CEOs lately.
- sbov 8y agoI'm not a huge Elon fan, but he is pretty unique when it comes to rich people. Most people in his position would invest their money wisely and live off it forever. Instead he put everything he had into several moonshots. Society could use a couple more people like him.
- nickik 8y agoStrange statement. Why would a business guy be judged on firing people. Its not like he is running a charity. I like SpaceX because of what they do, not because they 'provide jobs to the community'.
- Semirhage 8y ago"Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us." So they’re not a profitable business, and not a charity. What are they exactly?
- gowld 8y agoA mission-driven organization, that wants to make enough money to continue its mission.
- deleted 8y ago[deleted]
- aarondf 8y agoAn unprofitable business.
- ericsoderstrom 8y agoThe very next sentences after that one are: "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla's history to date."
- Semirhage 8y agoIt’s a valid criticism they seem unable to tackle without massive layoffs, which seems problematic. Taking credit for clean energy is good PR though... maybe they’re a PR company?
- 8y ago
- agumonkey 8y agoI think Musk perception is indeed inflated, but at the same time you can't blame him for refusing to die.
- rz2k 8y agoElon Musk as manager of a firm or manager of a household? There is social utility in the efficient allocation of labor. While there are plenty of justifications for devoting resources to help people find new jobs, and reduce frictional unemployment, keeping people in jobs where their compensation is not cost effective relative to their output impoverishes an economy and the people in it. If on the other hand Elon Musk as a household were maximizing his personal return on equity in Tesla for the sake of purely wasteful personal consumption that would be another thing. However, he seems to invest almost all of his wealth into his companies.
- Diederich 8y ago> a leader who touts altruism as one of his top motivators. His stated motives are altruistic (making humans interplanetary, accelerating transition to clean energy, others), but that's quite different from altruism as a top motivator. In this case, it was decided that laying off >3000 employees would best serve the goal of accelerating transition to clean energy. Does that make more sense?
- jseliger 8y agoI never understood the public fandom behind them and Elon Musk If this is a serious comment, see https://waitbutwhy.com/2015/05/elon-musk-the-worlds-raddest-man.html https://waitbutwhy.com/2015/05/elon-musk-the-worlds-raddest-... and the other parts of the series.
- ksk 8y agoThe answer is simple: Your personal definition of how an altruistic business operates is not the agreed upon definition.