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A corporation like Hertz has the resources to evaluate Musk’s claims before committing to buy 100,000 cars. If they truly believed these cars would soon drive
by pavlov 2y ago
A corporation like Hertz has the resources to evaluate Musk’s claims before committing to buy 100,000 cars.
If they truly believed these cars would soon drive themselves, that’s entirely the fault of executives who didn’t do the minimum due diligence. Spending $100k to get a few consultants’ opinions would have been enough to pop that bubble.
- mathgradthrow 2y ago>that’s entirely the fault of executives who didn’t do the minimum due diligence Entirely? Like 100%?
- ghaff 2y agoYes? It was their decision.
- marcosdumay 2y agoI think the GP is trying to say that Tesla shouldn't be allowed to publish wild lies on their marketing material.
- ghaff 2y agoPerhaps. But it was pretty obvious at the time that they were wild lies. Not excusing Tesla but one would hope that very well-paid execs would get it--but that may be optimistic.
- nashashmi 2y agoWell paid executives learned to rely on vendor statements and vendor litigation. They don't question it. If you offer them a magic wheel, they will buy your magic wheel (after you have the right bonding and insurance backings).
- rvnx 2y agoAnd the practice shows that if you have billions it's totally ok to lie or to infringe copyright (e.g. large AI companies, or search engines). It's only a problem if you are poor.
- marcosdumay 2y agoOh, yes. It was blatant incompetence. But more than one part can be guilty.
- pavlov 2y agoThe law is very different when a corporation is lying to retail customers in their marketing material vs. lying to another corporation in a B2B deal. The latter can still be fraud, but the bar is much higher. Hertz would have to show that Tesla actually promised self-driving in a contract.
- rchaud 2y agoAccording to the Bloomberg Businessweek story, Hertz top management were a couple of finance bros from private equity. They appointed a Goldman CFO as CEO, one with no background in automotive/transport industry. The whole Tesla bet appeared to be part of a executive fever dream to rebrand Hertz as a vanguard of the future. [0] https://news.ycombinator.com/item?id=39928913 https://news.ycombinator.com/item?id=39928913
- brigadier132 2y agoHertz is not an exciting company, the only people that want to be involved are people interested in money.
- vel0city 2y agoIt's exciting in the same way fireworks or a train accident or a raging city fire are exiting. We're expecting to see some crazy big booms given the reagents at play.
- lenerdenator 2y agoSounds like it's time for some lawsuits against the board/management from shareholders. EDIT: Not understanding the downvotes. Board members and executives have a fiduciary duty to shareholders. They let their hubris get the best of them and that left the company with a fleet of assets that are depreciating rapidly, even by automotive standards. Thus the company is not returning as much value as it could if it had purchased more traditional vehicles. "I have a fiduciary duty to shareholders" can't just be used by executives and board members to explain away budget cuts and massively upending peoples' lives with layoffs. It should cut both ways. Or are we going to just finally admit that this excuse only serves to protect management and capital?
- alwa 2y agoI don’t know, but I suspect people may be reacting negatively because, as they say, hindsight is 20/20. The bet didn’t work out, but that doesn’t mean it was a self-evidently stupid thing to try from the perspective of 2020/2021. It seems to me that sometimes somebody has to try a thing for us all to find out that it doesn’t work. If people with money in the company were sure it was a dumb idea all along, couldn’t they have sold their shares? Or even done fancy options trades to profit from their contrarian certitude? Why would a court be involved in something like this, where management very clearly said what they were going to do, they did it, and it just didn’t work out the way they’d hoped?
- woodruffw 2y agoIt’s not this simple, typically. Diligence can mean requesting internal documents or statements, which doesn’t prevent a thoroughly dishonest partner from just plain lying about their capabilities. It doesn’t seem inconceivable to me that Hertz performed that kind of diligence, perhaps not recognizing the kind of shyster they were dealing with.
- chadrs 2y agoand even if some analysts at Hertz could did their job, I'm sure they were promptly ignored by executives who just liked Elon's vibe.
- ghaff 2y agoYes, should have been blindingly obvious at the time to anyone who did minimum investigation that full autonomy within the (short) lifetime of a rental car was a complete fantasy. I find it easier to believe that Hertz thought electric vehicles would be a big consumer draw but, as a sometimes renter, I have trouble seeing the appeal of dealing with something unfamiliar as a renter aside from maybe a one-time novelty.
- haliskerbas 2y agoI rent a car around 6 times a year and I like trying out a different vehicle as often as I can. Adding car charging time into my short vacation in an unknown place, and being on the hook for returning it charged, etc. Might as well not deal with the hassle!
- ghaff 2y agoExactly. I might rent a Tesla once just to see what it was like. But figuring out how to return a car fueled is enough hassle as it is. Rarely rent a car these days. Uber/Lyft has covered a lot of the edge cases in the US but still do it a few times a year.
- vel0city 2y agoExactly. Given the lower "fuel" cost and lower cost for employees to spend time "refueling" they should have accepted anything above like 20% with no cost. Their costs for recharging on industrial electric should have been like a dollar or two on an average battery, they should just leave them plugged in most of the time pulling little power. Dumb they weren't always guaranteed to be like 90+% and free over 20% charged on return.
- pavlov 2y agoI'm surprised that Hertz didn't build chargers on premises for this fleet. I can see why car rental companies expect fossil fuel cars to be returned with a full tank, but for an electric car, they can charge it themselves. Being able to return the car without having to worry about recharging would make the electric cars more attractive.
- foobarian 2y agoI'm sure they did get consultants opinions and do due diligence. But the funny thing about leadership is, they can be prone to going against the grain of armchair quarterbacks with no skin in the game who always say no. Given who the interim CEO team was they probably ignored (or, not ignored but considered and went against) the reports in favor of a risky bet. It didn't happen to work out. However if it did, they would be hailed as visionary heroes.
- quantified 2y agoThat depends entirely on the quality of the consultants and how they framed the assignment.
- rsynnott 2y agoA company like Walgreens had the resources to evaluate Holmes' claims before committing hundreds of millions on a Theranos scheme. And yet... Big companies seem to be worse than you'd think at filtering out obvious nonsense vendor claims. (Notably, people at Walgreens were going, "er, yeah, not sure about this, seems like bullshit", but they were overruled by the decision-makers).