I have followed Elon Musk and Tesla for years. He has been touted as a genius, which I’m sure he is. I just don’t know what he is genius about – making cars or spending other people’s money.
He has been given $10 billion in federal incentives because of his electric car, making promises. President Barack Obama and the “Greenies” loved this guy from the very start of his ideas for an electric car company.
He blew through the $10 billion (your money), and holds another $10 billion in debt (lenders) and has never turned a profit. The company was valued at $56 billion recently by stock market experts, without any profit! This is how bankruptcy happens – a big bubble of debt, huge expectations, no cash or assets to cover the debt, then bankruptcy.
When he started eight years ago, his electric car idea was heralded as the future of the car industry. After years of trying to get the car produced, the trickling numbers of completed cars are way under the projected manufacturing rate. Figures released lately show delivering 975 cars per week. This is well short of the target of 2,500 units per week predicted by the end of the quarter.
Recently, their stock has been downgraded to areas deep in the junkiest of junk-bond area! The recent firings of employees, large negative cash flow, and the pending maturities of bonds to be paid are not predicting a good outcome. Recently, the stock has fallen to its lowest level in a year, down over 25% in the past month alone.
To add on to the mounting pressures, established automakers Volkswagen, Porsche, BMW, Mercedes-Benz, and others are now entering the electric car market, finally giving Tesla stiff competition in the marketplace.
Unfortunately for investors, it has not done well in the marketplace nor on the public highway with a crash in a fatal accident in a Tesla Model X sport utility vehicle, the second in two years.
Many car insiders and investment people don’t see Tesla lasting to the end of the summer due to the hemorrhaging of cash. Many think bankruptcy is the only avenue for the company not able to meet its obligations.
And who is the largest investor in this boondoggle? Look in the mirror! Yup, another wonderful gift from the Obama administration to Mr. Musk underwritten by the American taxpayer. Grab your ankles again – the gift that keeps on giving!
This is the reason government should never subsidize or incentivize industry – ever.
The rotting of America from within continues…
No argument on Elon Musk using the “Art of the Deal” prowess getting government monies to finance his rocket, energy storage, transit and auto businesses.
Many great American fortunes in post-WW2 America have been made because of government handouts or subsidies or tax breaks. We have billionaire real estate moguls who have gotten millions in tax breaks and government rent support for medium and low income housing. Many would be shocked to learn some even hold public office, have an (R) behind their names and call themselves “conservatives.”
Other fortunes have been made by supplying the US military, the FDA, the Forest Service and other government agencies by people who then fund the campaigns by people who run on shrinking government and controlling government spending. But not necessarily for the departments that buy their goods and make them good livings.
Some here have praised Governor Rick Snyder for putting MI on track. Gov. Snyder shifted taxes from businesses to individuals. Those businesses from a tax shift. I call that a subsidy that benefitted private business. The same governor signed legislation that gave the SWITCH company that bought the former Steelcase Pyramid a tax break on all equipment for sales tax on those capital purchases of data handling devices like servers but giving municipalities the option of also waiving personal property tax levied against not only SWITCH, but all data centers.
Our Pro-Business Governor and State Legislature have been very generous with tax breaks to business yet Pfizer ($50B in ’17 profits) is negotiating for even more tax breaks from local government after MI has cut taxes on businesses and changed formulas reducing state funds to counties leaving those entities needing local taxes to cover the shortfalls caused by the new formulas.
Just this week we saw MI DEQ C. Heidi Grether, a Snyder appointee (former lobbyist for BP Energy) give Nestle the go ahead to increase their fresh water extraction by 60% from 250 gallons per minute to 400 gym. That’s 576,000 gallons of fresh water, what others and myself to be one of Michigan’s greatest resources, to be shipped to MI and out of state. The water doesn’t require additional treatment so it goes from well head to bottling to truck. Nestle will make millions on selling this resource.
The required public comments were 75 in favor and 80,945 against the increase. The DEQ Director made this statement after granting the increase,”In full transparency, the majority of the public comments were in opposition of the permit,” Grether added, “but most of them related to issues of public policy which are not, and should not be, part of an administrative permit decision.”
Get that last part? Public policy should not be part of an administrative permit.
It appear the rot is corporate welfare for multi-nationals and wealthy individuals.
And so it goes.