5 ms·

Additional sad part is that Musk has been pulling that stuff for a long long time. Tesla is known for having very unhealthy relationships with suppliers (that i

Additional sad part is that Musk has been pulling that stuff for a long long time. Tesla is known for having very unhealthy relationships with suppliers (that includes not paying bills), factories have management approved racism running rampant, etc. And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently.

phpisthebest 3y ago
>>Tesla is known for having very unhealthy relationships with suppliers That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times.
- plagiarist 3y ago
  I don't know why any supplier ever agreed to net 30 (or more!) without something like the board members' personal finances as guarantees. Companies can just declare bankruptcy, then you're lucky if you're towards the front of the line of creditors.
  - davidjytang 3y ago
    Was in a local bid for a tender. Foxconn was demanding net 180 or off the program if supplier can’t stomach it.
  - phpisthebest 3y ago
    So you believe every vendor that supplies a screw or push pin to Ford or GM has a personal guarantee from a Ford or GM Board Member? Really?
    - plagiarist 3y ago
      Strawman argument, we aren't talking about single screws. We are talking about lots of tens or hundred of thousands of screws. But, yes, if you want the supplier to loan you money there should be collateral. I don't know why suppliers allowed it to become industry practice.
      - phpisthebest 3y ago
        Because Unsecured debt has been a thing forever, at every level of the economy. I mean a huge part of the population carries around an unsecured line of credit with them every where they go, aka a credit card. I have been in the business for decades, having bought millions of dollars worth of equipment, never once have I had any vendor ask me to get a board members person guarantee to give me a line of credit, nor do I believe have I ever heard of my company asking any of our customers do to anything of the sort. It is very strange that you (and seemingly others given the downvotes) think it is a common practice or should be a common practice.
        plagiarist 3y ago
        Your credit card is guaranteed by your personal finances and there are actual consequences for you if you default or declare bankruptcy. It is weird to have a completely unsecured loan that is dischargeable by bankruptcy that won't cause personal loss for the owners. You can be angry that people think it is weird, but if the best you can come up with is, "I am a big important person and it is industry practice because it is industry practice," you're not going to convince me it is good for the suppliers to have historically allowed this to come about.
        phpisthebest 3y ago
        >>our credit card is guaranteed by your personal finances and there are actual consequences for you if you default or declare bankruptcy. These are the same consequences a business face if they do not pay vendors on net 30 terms... >It is weird to have a completely unsecured loan that is dischargeable by bankruptcy that won't cause personal loss for the owners. Having been through personal bankruptcy, its not.. In Chapter 7 Bankruptcy a person can discharge many unsecured debts while keeping their primary home, and most personal possessions, this is a common. There are several ways you can come through Chapter 7 with secured debt being protected / excluded (meaning you still owe) from the bankruptcy and all unsecured debt being discharged. it is common myth that to be "bankrupt" means you have nothing and are homeless, because of this myth people often wait far far far too long to seek legal advice around their rights under the bankruptcy laws and often do something stupid like paying off unsecured debt with secured 2nd mortgages, or HELC making their situations FAR FAR worse >>you're not going to convince me it is good for the suppliers to have historically allowed this to come about. If ti was not good for the suppliers they would not do it To be clear I am not even sure what you are on about, my orginal comment about Automotive Companies being predatory to vendors has NOTHING to do with net 30 terms, or unsecured debt in the form of accounts payable. Hell every supplier I know would be happy with Net 60 terms.. large Auto suppler agreements have all kinds of provisions about quality, On time delivery, and various other performance metrics that the companies can use in very creative ways to claw back money already paid to the vendor, then there are the changes to production forecasting that requires suppliers to spin up or down capacity, staffing ect, only to have it then change soon after. i could go on and on listing abusive practices that have NOTHING AT ALL to do with the very common practice of invoicing customers for goods sold
  - SkyPuncher 3y ago
    Because another supplier will happily agree to the "riskier" terms. Competition baby.
    - black_puppydog 3y ago
      You mean non-competition on the buyer side. Oligopoly baby!
      - DenisM 3y ago
        A better term in this case is monopsony.
  - formerly_proven 3y ago
    Net payment terms really are not part of the problem here.
  - hyperbovine 3y ago
    Monopsony. So you make, say, seatbelt buckles? Congratulations there are like basically six companies that buy those in meaningful quantities. The power imbalance is inevitable.
- deleted 3y ago
  [deleted]
- HumblyTossed 3y ago
  > That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times. So? Is it okay then? It's only common because of this type of acceptance.
robertlagrant 3y ago
> And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently. No, it wasn't in response to that. I don't understand this sort of deliberate misinterpretation. It happened because the world rewards production. For example, Tesla jump-started the world's EV movement, and leads it by volume. SpaceX means the US aren't currently trying to get a Russia that it's in a proxy war with to take its astronauts to the ISS.
- sangnoir 3y ago
  > It happened because the world rewards production. The world rewards anticipated production - I find Tesla's P/E absurd.
  - FireBeyond 3y ago
    Because it was (and to me still is) absurd. At one point, Tesla was worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Plus several Chinese manufacturers: SAID, Geely, Changan, Dongfeng).
    - tim333 3y ago
      The hypothesis is Tesla becomes like Apple in cell phones vs all the other manufacturers. Apple may not have all the sales but it has most of the profits. Not saying that will happen with Tesla but it's a possibility.
  - robertlagrant 3y ago
    Well, not exactly. It rewards current production, i.e. people buy Teslas, as well as future production, i.e. we think you can make us money based on your track record. I should say more precisely that the world doesn't reward Tesla; it thinks it can get more out of Tesla than it gives it. Which is probably the least worst system.
  - therealdrag0 3y ago
Slava_Propanei 3y ago
[dead]

phpisthebest 3y ago

>>Tesla is known for having very unhealthy relationships with suppliers That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times.

plagiarist 3y ago
I don't know why any supplier ever agreed to net 30 (or more!) without something like the board members' personal finances as guarantees. Companies can just declare bankruptcy, then you're lucky if you're towards the front of the line of creditors.
- davidjytang 3y ago
  Was in a local bid for a tender. Foxconn was demanding net 180 or off the program if supplier can’t stomach it.
- phpisthebest 3y ago
  So you believe every vendor that supplies a screw or push pin to Ford or GM has a personal guarantee from a Ford or GM Board Member? Really?
  - plagiarist 3y ago
    Strawman argument, we aren't talking about single screws. We are talking about lots of tens or hundred of thousands of screws. But, yes, if you want the supplier to loan you money there should be collateral. I don't know why suppliers allowed it to become industry practice.
    - phpisthebest 3y ago
      Because Unsecured debt has been a thing forever, at every level of the economy. I mean a huge part of the population carries around an unsecured line of credit with them every where they go, aka a credit card. I have been in the business for decades, having bought millions of dollars worth of equipment, never once have I had any vendor ask me to get a board members person guarantee to give me a line of credit, nor do I believe have I ever heard of my company asking any of our customers do to anything of the sort. It is very strange that you (and seemingly others given the downvotes) think it is a common practice or should be a common practice.
      - plagiarist 3y ago
        Your credit card is guaranteed by your personal finances and there are actual consequences for you if you default or declare bankruptcy. It is weird to have a completely unsecured loan that is dischargeable by bankruptcy that won't cause personal loss for the owners. You can be angry that people think it is weird, but if the best you can come up with is, "I am a big important person and it is industry practice because it is industry practice," you're not going to convince me it is good for the suppliers to have historically allowed this to come about.
        phpisthebest 3y ago
        >>our credit card is guaranteed by your personal finances and there are actual consequences for you if you default or declare bankruptcy. These are the same consequences a business face if they do not pay vendors on net 30 terms... >It is weird to have a completely unsecured loan that is dischargeable by bankruptcy that won't cause personal loss for the owners. Having been through personal bankruptcy, its not.. In Chapter 7 Bankruptcy a person can discharge many unsecured debts while keeping their primary home, and most personal possessions, this is a common. There are several ways you can come through Chapter 7 with secured debt being protected / excluded (meaning you still owe) from the bankruptcy and all unsecured debt being discharged. it is common myth that to be "bankrupt" means you have nothing and are homeless, because of this myth people often wait far far far too long to seek legal advice around their rights under the bankruptcy laws and often do something stupid like paying off unsecured debt with secured 2nd mortgages, or HELC making their situations FAR FAR worse >>you're not going to convince me it is good for the suppliers to have historically allowed this to come about. If ti was not good for the suppliers they would not do it To be clear I am not even sure what you are on about, my orginal comment about Automotive Companies being predatory to vendors has NOTHING to do with net 30 terms, or unsecured debt in the form of accounts payable. Hell every supplier I know would be happy with Net 60 terms.. large Auto suppler agreements have all kinds of provisions about quality, On time delivery, and various other performance metrics that the companies can use in very creative ways to claw back money already paid to the vendor, then there are the changes to production forecasting that requires suppliers to spin up or down capacity, staffing ect, only to have it then change soon after. i could go on and on listing abusive practices that have NOTHING AT ALL to do with the very common practice of invoicing customers for goods sold
- SkyPuncher 3y ago
  Because another supplier will happily agree to the "riskier" terms. Competition baby.
  - black_puppydog 3y ago
    You mean non-competition on the buyer side. Oligopoly baby!
    - DenisM 3y ago
      A better term in this case is monopsony.
- formerly_proven 3y ago
  Net payment terms really are not part of the problem here.
- hyperbovine 3y ago
  Monopsony. So you make, say, seatbelt buckles? Congratulations there are like basically six companies that buy those in meaningful quantities. The power imbalance is inevitable.
deleted 3y ago
[deleted]
HumblyTossed 3y ago
> That is pretty much all of automotive, Tesla is not an outlier. All of the big manufacturers know they have their suppliers over a barrel, and they exploit that at all times. So? Is it okay then? It's only common because of this type of acceptance.

robertlagrant 3y ago

> And what happened in response to that? He became wealthiest person on earth and for years was considered second coming of Jesus in the tech circles, that only started to fade recently. No, it wasn't in response to that. I don't understand this sort of deliberate misinterpretation. It happened because the world rewards production. For example, Tesla jump-started the world's EV movement, and leads it by volume. SpaceX means the US aren't currently trying to get a Russia that it's in a proxy war with to take its astronauts to the ISS.

sangnoir 3y ago
> It happened because the world rewards production. The world rewards anticipated production - I find Tesla's P/E absurd.
- FireBeyond 3y ago
  Because it was (and to me still is) absurd. At one point, Tesla was worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Plus several Chinese manufacturers: SAID, Geely, Changan, Dongfeng).
  - tim333 3y ago
    The hypothesis is Tesla becomes like Apple in cell phones vs all the other manufacturers. Apple may not have all the sales but it has most of the profits. Not saying that will happen with Tesla but it's a possibility.
- robertlagrant 3y ago
  Well, not exactly. It rewards current production, i.e. people buy Teslas, as well as future production, i.e. we think you can make us money based on your track record. I should say more precisely that the world doesn't reward Tesla; it thinks it can get more out of Tesla than it gives it. Which is probably the least worst system.
- therealdrag0 3y ago

Slava_Propanei 3y ago

[dead]