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>How is an electric car factory an essential business? Because it's not like a restaurant that you can close and then open a month later with little consequenc
by gambler 7y ago
>How is an electric car factory an essential business?
Because it's not like a restaurant that you can close and then open a month later with little consequence to the public. If you stop production of components or cars, you will not have them later on to restart the economy.
Most of the world uses lean manufacturing. Closing down some factories will mean that entire production chains will shut down. All the companies that service those chains will shut down. And when the virus passes, you will have no cars, no components for cars, and no easy way to restart manufacturing.
Even without shutdowns the entire system will take a huge hit dues to changes in demand. (Which will drop to nothing for some thing and skyrocket for others.)
- lexs 7y agoVW is doing it [0] [0] https://www.reuters.com/article/us-volkswagen-results-2019/volkswagen-starts-shutting-down-production-in-europe-in-face-of-coronavirus-idUSKBN2140OF https://www.reuters.com/article/us-volkswagen-results-2019/v...
- stickfigure 7y agoVW is a much bigger company which can afford the slack. Tesla is a small upstart that's never turned a profit. From cold calculus it might be worth risking a few more lives to keep the concern going.
- dekhn 7y agothats not an argument for calling tesla an essential service.
- new_realist 7y agoTesla is a $100B, 17 year old company.
- bdcravens 7y agoIt was. The recent damage to the price puts it closer to $80B today.
- jsight 7y agoI'm not sure of your point here? Presumably Tesla's capital position is still significantly smaller than VW? I do not know this, though, as I am not as familiar with VW's capital structure. TBH, I'm more worried about what will happen with Ford or GM if they have even a short outage. GM has massive ongoing obligations and a relatively weak balance sheet, afaik.
- bdcravens 7y agoStrictly in terms of market cap (not the best metric, admittedly) Tesla is larger than VW. (both company's stocks have been devastated recently though)
- stickfigure 7y agoMarket cap is a psychological construct. It will not help you when you're already bleeding cash and your cash flow suddenly goes sharply negative. It's entirely possible that this calamity will kill off some very large companies (by any metric) that have been operating in the margin.
- cjhopman 7y agoSure, but it's a good argument against calling something a "small upstart".
- rurp 7y agoSo you think it's OK for a business to knowingly take actions that are likely to kill people, as long as they really need the money? Thank God most of modern society disagrees with you.
- stickfigure 7y agoI have bad news for you: Modern society not only allows business and individuals to take actions that will kill people, but it quantifies to what extent in dollar terms: https://en.wikipedia.org/wiki/Value_of_life https://en.wikipedia.org/wiki/Value_of_life Scroll down for a country-by-country breakdown. I personally don't pass judgement on it.
- nicoburns 7y ago> Because it's not like a restaurant that you can close and then open a month later with little consequence to the public. That hits a nerve. A lot of restaurants are going to close and never reopen again as a result of this lockdown.
- falcolas 7y agoYeah, the idea that all of these businesses shutting down has little consequence to the public (regardless of whether they open again) is incredibly tone deaf, with somewhere around 15% of the US population impacted by these closures. Worse, this population likely overlaps with the most at-risk when it comes to both health and financial standing.
- jfkebwjsbx 7y agoHN is not US-only. In Europe, losing your job does not mean losing your health nor your finances.
- bdcravens 7y agoSure, but we're discussing a shutdown in the Bay Area, so the American reality is the proper context.
- nicoburns 7y ago> In Europe, losing your job does not mean losing your health nor your finances. It does if you're freelance, which a lot of the events industry is. Or if you work for a small business that folds as soon as it has no business.
- tssva 7y agoIt sounds cold but the reality is that other restaurants will open to replace the ones that never reopen because a demand for them will exist thanks to places like Tesla staying open and pumping revenue into the local economy.
- 7y ago
- morelisp 7y ago> Most of the world uses lean manufacturing. This applies just as much to anything food-related (grocery or restaurant); maybe moreso because most of what a restaurant needs (or farm/ranch/fishery could produce) is not as shelf-stable as most car parts.
- TeMPOraL 7y agoStill, restaurants are commodities. Even in normal market conditions, there's plenty of churn in gastronomy. It's harder to restart a factory, and consequences on the supply chain might be more profound.
- miscPerson 7y agoArguing that cars aren’t a commodity but social institutions are comes across as satire. At best.
- rad_gruchalski 7y ago> Because it's not like a restaurant that you can close and then open a month later with little consequence to the public. If you stop production of components or cars, you will not have them later on to restart the economy. Interesting. VW, Daimler, Lamborghini, Ferrari, FCA, PSA all are stopping production.