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Incredibly embarrassing for Europe and Sweden. Even with billions of investments from the big car companies, investors and many millions in subsidies, they simp

by brabel 2y ago

Incredibly embarrassing for Europe and Sweden. Even with billions of investments from the big car companies, investors and many millions in subsidies, they simply couldn’t make it work at all. Instead of buying the California startup just to shut it down, should’ve invested most of their money there instead. They are leaving an enormous eyesore in the northern Sweden landscape with thoudands of people unemployed, many of which may be deported now, with very little to show for it other than many scandals (including paying millions of dollars in bonus to their incompetent executives even as they file for bankruptcy)!

ngrilly 2y ago
As far as I know, no executives received “millions of dollars in bonuses”. What is your source? And in Sweden and Europe, people are usually not paid in dollars :)
- mdorazio 2y ago
  The first Google result for “Northvolt bonuses”: https://swedenherald.com/article/northvolt-wants-to-pay-out-bonuses-of-59-million https://swedenherald.com/article/northvolt-wants-to-pay-out-...
  - ngrilly 2y ago
    And? It is targeting 230 employees, and explicitly excluding top management. Employees at Northvolt are often paid slightly below market, because they also warrants. But considering those warrants are probably not worth much anymore, the bonus may be necessary to retain necessary talents.
  - KomoD 2y ago
    "wants to", meaning they haven't
- abc123abc123 2y ago
  Since northvolt is private, there is a lot less insight into what goes on there. However, I'm fairly sure that the CEO did sell some of his shares during one or more financing rounds, in order to create a little nest egg for himself. On top of that I'd imagine that during the 8 years or so, he probably took out at least 200k EUR in salary, if not more, per year. So a few millions of dollars probably went to the CEO.
  - ngrilly 2y ago
    Correct, but none of this is a “bonus”, as claimed in the parent comment.
    - brabel 2y ago
      The bonus I mentioned was all over the news in Sweden last night. No, it was not paid yet, but looks like there's little chance that will be stopped. Edit: example news from a few hours ago: https://www.svt.se/nyheter/lokalt/vasterbotten/northvoltarbetarna-om-bonusar-borde-tanka-pa-hur-de-anvander-pengarna https://www.svt.se/nyheter/lokalt/vasterbotten/northvoltarbe... It's unclear if the employees receiving that are actually top management, but honestly, I would be surprised if they're not, as they are the ones who always get this sort of bonuses. EDIT 2: you don't need to speak Swedish to understand what North Volt itself wrote is about a bonus program, so yes, it most definitely is a bonus: "bonusprogrammet är avgörande för att upprätthålla arbetsmoral, motivation och lojalitet"
      - ngrilly 2y ago
        I live in Sweden. Can you share a link? I bet that what you have in mind is the bonus that could be paid to about 230 employees, explicitly excluding the top management, in order to retain them. Or perhaps the news that the former CEO has sold some shares during a founding round, which is a relatively standard practice and not a “bonus”, and a way to keep the CEO salary reasonably low. Edit (following your edit): You wrote earlier: “including paying millions of dollars in bonus to their incompetent executives”. The link you shared directly contradicts this since it mentions the equivalent of 6M USD distributed to about 230 employees. Another article mentions very explicitly that top management is excluded. According to these articles, it is simply impossible to conclude that top executives will receive “millions of dollars”. You’re just contributing to rumors that are not based on facts.
        brabel 2y ago
        In my view, you're the one spreading lies here. I haven't seen anywhere that top management is excluded. Please link to sources if you have reliable ones. About the bonus being spread over 230 employees: no one can know how much will go to each employee. From my experience with shenanigans like this, usually two guys will each get 40% of the whole bonus, and the other 228 will get the remaining 20%. Do you have actual data on that or you're just interpreting this in the most charitable possible way you can???
benchmarkist 2y ago
Profits and subsidies are privatized, losses are socialized. That's how the system is designed to work.
- Cumpiler69 2y ago
  This. The system works just as intended. If the state is throwing free money around why wouldn't you pick it up and pocket it? Your job isn't to create jobs or return on investment, it's to funnel that free state money in the pockets of shareholders. For those looking for another similar example of European subsidized tech failure check the ST-Ericsson story.
  - Al-Khwarizmi 2y ago
    China also subsidizes the car and battery industry and in their case, it seems to be working just fine. So a blanket statement of "state subsidies = bad" does not tell the whole story.
    - Cumpiler69 2y ago
      Of course, everyone is subsidizing their industries, especially the US and China. I never made a blanket statement that all state subsidized are bad, I just pointed out some cases of major EU failures which you took as a blanket statement.
  - huijzer 2y ago
    This is a bit of a black and white way of putting it. Yes, much state money is wasted, but not all. Some of the money went to Swedish construction workers for example.
    - Cumpiler69 2y ago
      >Some of the money went to Swedish construction workers for example Ah, the myth of trickle down economics.
piva00 2y ago
Northvolt's leadership seem extremely incompetent, reading the news here in Sweden the CEO has been lambasted by former employees on how bad he was for executing the plan. But this happens all the time in the USA, it's quite funny to read comments on HN about how Europe is losing to USA's "innovation" but when one company does follow the USA model (huge injection of capital, unreliable/inexperienced leadership, failure to execute/pivot) then it's an apocalyptic sign. It's risky, and in this case it failed spectacularly.
- blitzar 2y ago
  If they had pivoted to Blockchain in 2017 and then to foundational LLM models in 2022 they would have been fine - its typical European lack of exceptionalism (/s?)
- pas 2y ago
  Because a startup scene needs a fucking scene. Having exactly one darling company in each sector is recipe for the classic yet seemingly every time unavoidable "too precious to fail" failure mode. It's the same thing that always happens in Europe when we're trying to mimic something from the other side of the pond, we do it too late, too small, too fancy. Here's a nice, detailed, insightful essay (?) on the Canadian tech scene, but of course blindly replacing Toronto with Berlin (or at least the CN tower with the Fernsehturm) and the results are the same. https://alexdanco.com/2021/01/11/why-the-canadian-tech-scene-doesnt-work/ https://alexdanco.com/2021/01/11/why-the-canadian-tech-scene...
leviliebvin 2y ago
We have an epidemic of bad leadership. It's everywhere. Governments, research institutions, private and public companies. I don't know the cause of it, but from what I observe from my workplace it's because the heavily bureaucratic processes of both public and private entities requires a certain personality that is basically a politician above all else. And the whole promotion process is a one way valve. Once you go up a rung there's very little you can do to be pushed down the same rung again. The best managers I had are people who made their career in the US and returned to Europe as senior managers.
- tim333 2y ago
  One the advantages of capitalist competition is companies run by bad managers go bust and the resources can be redeployed. You get rid of that and have promotion based on office politics and you get a lot of problems.

by brabel 2y ago

ngrilly 2y ago

As far as I know, no executives received “millions of dollars in bonuses”. What is your source? And in Sweden and Europe, people are usually not paid in dollars :)

mdorazio 2y ago
The first Google result for “Northvolt bonuses”: https://swedenherald.com/article/northvolt-wants-to-pay-out-bonuses-of-59-million https://swedenherald.com/article/northvolt-wants-to-pay-out-...
- ngrilly 2y ago
  And? It is targeting 230 employees, and explicitly excluding top management. Employees at Northvolt are often paid slightly below market, because they also warrants. But considering those warrants are probably not worth much anymore, the bonus may be necessary to retain necessary talents.
- KomoD 2y ago
  "wants to", meaning they haven't
abc123abc123 2y ago
Since northvolt is private, there is a lot less insight into what goes on there. However, I'm fairly sure that the CEO did sell some of his shares during one or more financing rounds, in order to create a little nest egg for himself. On top of that I'd imagine that during the 8 years or so, he probably took out at least 200k EUR in salary, if not more, per year. So a few millions of dollars probably went to the CEO.
- ngrilly 2y ago
  Correct, but none of this is a “bonus”, as claimed in the parent comment.
  - brabel 2y ago
    The bonus I mentioned was all over the news in Sweden last night. No, it was not paid yet, but looks like there's little chance that will be stopped. Edit: example news from a few hours ago: https://www.svt.se/nyheter/lokalt/vasterbotten/northvoltarbetarna-om-bonusar-borde-tanka-pa-hur-de-anvander-pengarna https://www.svt.se/nyheter/lokalt/vasterbotten/northvoltarbe... It's unclear if the employees receiving that are actually top management, but honestly, I would be surprised if they're not, as they are the ones who always get this sort of bonuses. EDIT 2: you don't need to speak Swedish to understand what North Volt itself wrote is about a bonus program, so yes, it most definitely is a bonus: "bonusprogrammet är avgörande för att upprätthålla arbetsmoral, motivation och lojalitet"
    - ngrilly 2y ago
      I live in Sweden. Can you share a link? I bet that what you have in mind is the bonus that could be paid to about 230 employees, explicitly excluding the top management, in order to retain them. Or perhaps the news that the former CEO has sold some shares during a founding round, which is a relatively standard practice and not a “bonus”, and a way to keep the CEO salary reasonably low. Edit (following your edit): You wrote earlier: “including paying millions of dollars in bonus to their incompetent executives”. The link you shared directly contradicts this since it mentions the equivalent of 6M USD distributed to about 230 employees. Another article mentions very explicitly that top management is excluded. According to these articles, it is simply impossible to conclude that top executives will receive “millions of dollars”. You’re just contributing to rumors that are not based on facts.
      - brabel 2y ago
        In my view, you're the one spreading lies here. I haven't seen anywhere that top management is excluded. Please link to sources if you have reliable ones. About the bonus being spread over 230 employees: no one can know how much will go to each employee. From my experience with shenanigans like this, usually two guys will each get 40% of the whole bonus, and the other 228 will get the remaining 20%. Do you have actual data on that or you're just interpreting this in the most charitable possible way you can???

benchmarkist 2y ago

Profits and subsidies are privatized, losses are socialized. That's how the system is designed to work.

Cumpiler69 2y ago
This. The system works just as intended. If the state is throwing free money around why wouldn't you pick it up and pocket it? Your job isn't to create jobs or return on investment, it's to funnel that free state money in the pockets of shareholders. For those looking for another similar example of European subsidized tech failure check the ST-Ericsson story.
- Al-Khwarizmi 2y ago
  China also subsidizes the car and battery industry and in their case, it seems to be working just fine. So a blanket statement of "state subsidies = bad" does not tell the whole story.
  - Cumpiler69 2y ago
    Of course, everyone is subsidizing their industries, especially the US and China. I never made a blanket statement that all state subsidized are bad, I just pointed out some cases of major EU failures which you took as a blanket statement.
- huijzer 2y ago
  This is a bit of a black and white way of putting it. Yes, much state money is wasted, but not all. Some of the money went to Swedish construction workers for example.
  - Cumpiler69 2y ago
    >Some of the money went to Swedish construction workers for example Ah, the myth of trickle down economics.

piva00 2y ago

Northvolt's leadership seem extremely incompetent, reading the news here in Sweden the CEO has been lambasted by former employees on how bad he was for executing the plan. But this happens all the time in the USA, it's quite funny to read comments on HN about how Europe is losing to USA's "innovation" but when one company does follow the USA model (huge injection of capital, unreliable/inexperienced leadership, failure to execute/pivot) then it's an apocalyptic sign. It's risky, and in this case it failed spectacularly.

blitzar 2y ago
If they had pivoted to Blockchain in 2017 and then to foundational LLM models in 2022 they would have been fine - its typical European lack of exceptionalism (/s?)
pas 2y ago
Because a startup scene needs a fucking scene. Having exactly one darling company in each sector is recipe for the classic yet seemingly every time unavoidable "too precious to fail" failure mode. It's the same thing that always happens in Europe when we're trying to mimic something from the other side of the pond, we do it too late, too small, too fancy. Here's a nice, detailed, insightful essay (?) on the Canadian tech scene, but of course blindly replacing Toronto with Berlin (or at least the CN tower with the Fernsehturm) and the results are the same. https://alexdanco.com/2021/01/11/why-the-canadian-tech-scene-doesnt-work/ https://alexdanco.com/2021/01/11/why-the-canadian-tech-scene...

leviliebvin 2y ago

We have an epidemic of bad leadership. It's everywhere. Governments, research institutions, private and public companies. I don't know the cause of it, but from what I observe from my workplace it's because the heavily bureaucratic processes of both public and private entities requires a certain personality that is basically a politician above all else. And the whole promotion process is a one way valve. Once you go up a rung there's very little you can do to be pushed down the same rung again. The best managers I had are people who made their career in the US and returned to Europe as senior managers.

tim333 2y ago
One the advantages of capitalist competition is companies run by bad managers go bust and the resources can be redeployed. You get rid of that and have promotion based on office politics and you get a lot of problems.