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Ford, Tesla and Solyndra - Good News or Bunk?
Some are touting Ford’s improved financial position. They actually paid
down some debt and threw some crumbs to Preferred shareholders.
Some are looking to the IPO of Tesla as an indication that the capital
markets are open and doing what they are supposed to do. Raising equity
for new companies.
Some are pointing to marginal gains in employment. The manufacturing
sector is generating jobs. Especially in the areas of alternative
energy.
This is all bunk. The money for all this is coming from Uncle Sam. This
is the US Treasury doing the lending. Not private sector banks that we
functionally own. This from the Federal Financing Bank:
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Celgard - another example of where Uncle Sam is funding alternative energy-based companies and where President Obama has recently made a personal visit.
http://www.whitehouse.gov/blog/2010/04/02/jobs-we-are-beginning-turn-corner
One Tesla Roadster please! Could solve the whole recharging thing if you eliminate the battery and equip each car with a really long extension cord.
Reductio ad Absurdum - There were tons of early adopters for solar. As there is for everything else. The government doesn't have to provide that stimulus. The market will figure it out.
If it isn't cost effective, producers will find a way to make it more so. If it isn't - it should fail. Strapping these schools with 20 years of debt now, for a technology that will be vastly more efficient in 5 or even 10 years is terrible. Before the government forced us to start buying these panels - California was ahead of the game. Now people don't even know where they will live in 5 years. So why make a purchase like that?
As for computer analogy - when computers became cheap enough - people started buying them. It wasn't because the government was jam packed with them. It was because Steve and Bill Gates knew that if they were cheap enough, people would buy them.
Solar has already dropped 50% in price in a year. Yet the government bought in at the higher prices. The price drop is not due to the government purchases, but rather a glut of supply.
What about AONE? AONE makes the batteries Fisker and Tesla are using. I own stock in aone and think itll do very well when all these electric cars come out.
How about creating an efficient way to filter the GoM and recover all that free oil...and...get the gold out of the sea water as a bonus?
CHACHING!!!!
Both Solyndra and Tesla are a thorn in my side. I live in Silicon Valley. Solyndra canceled their IPO. But they've churned through a half a billion of taxpayer money. And they are deep in debt. I talked about them here. Towards the bottom.
http://snarkolepsy.blogspot.com/search?q=SOLYNDRA
Tesla - Elon Musk is a great bullshitter. The Toyota deal was dependant on Tesla going public. So - they took them public. Even though there is no infrastructure. The stock holders were blind. I bet this stick will be three bucks in 6 months. I've even talked about this on my blog a couple of times. A lot of companies are douchebag enough to have put in electric charging stations.
http://snarkolepsy.blogspot.com/search?q=electric+car
Elon is also apparently deep in debt. Between both companies they get a billion in taxpayer money. Just two companies.
Solyndra is pretty much sure to fail. And even though there are quite a few people driving Teslas in the Valley - I doubt they will survive. But, they will chew through taxpayer money.
I agree with the part in your blog post about not being willing to work within a corrupt and inefficient society, knowing that the taxes from your work will go to the corrupt, the lazy, and the incompetent. I'm in the same position. With a black guy in the White House and Mexicans pouring over the border by the millions, there's no reason for me to labor for this country anymore. Let it fail, and maybe something better can be formed from the ashes.
However, your position on "waiting for better technology" seems incorrect. Should people in the 1960's have bought color televisions when they could have just waited for HDTV LCD's? Should people in the 1980's have bought VCRs when they could have waited for (cheaper and far better) DVD players to arrive? Should the government have bought early warehouse-sized computers filled with vacuum tubes when they could have just waited for far better computers based on microprocessors?
Advancement in technology requires early adopters to provide both the money and the motivation for further development. Solyndra doesn't seem so bad from this perspective (although government involvement may, as usual, represent inefficiency).
Some are looking to the IPO of Tesla as an indication that the capital markets are open.
hum, i have a Tesla showroom down the block. small with only about 5 models. but they do have a couple of split engine halves. that is interesting to see something not run by fossil fuel. i probably have never seen an engine not run by gas. that is about all i like about this body styling. just saw a guy in one that was red, but it sure didn't get me H O T or anything, for the car or the dude driving.
Isn't coal a fossil fuel?
Very intelligent comment. Your opinion of something is how "hot" does it get you. And we wonder why we have an "ipod" economy. Moron.
Electric and hybrid cars are a joke anyway. Without the subsidies they don't make economic sense vs. regular gas cars for buyers or (usually) for manufacturers and I'd love for someone to show me the "green" math on how the all in construction cost + the fuel used to generate the car's electricity over the useful life of the car is "cleaner" vs. plain internal combustion cars. In other words I think more of the pollution and energy costs are crammed into the front end (manufaturing) so that the back end (driving the things around) has the illusion of being cheap and green. At best electric/hybrids are conspicuous luxury products that don't accomplish what they claim to. Probably not the best kind of thing for government to be subsidizing right now.
"In other words I think..."
All the information you'd like spoon fed is out there. But don't let facts get your head out of the sand. Enjoy your ignorant opinions.
Do yourself a favor and go check out Stoneleigh from the automatic earth ( theautomaticearth.blogspot.com ) regarding the real efficacy of green energy. She spent years in a green energy company and can relate from firsthand experience that real, efficient 'green' energy is really not very doable now or probably within the next 20 years. It simply takes too much energy to make the green energy systems. So Mercury's comment is actually fairly spot on.
P.S. those guys over there have really thought through it. Its not a pretty picture when you think about the effect of peak oil combined with the financial collapse. Its not a deflationista site but it is a realistic one, and the reality is pretty sobering.
ex VRWC
I'm actually pretty confident it's not out there. If electric/hybrids were cheaper and less energy intensive to produce and use (over their entire life) than regular cars they wouldn't need to rely on subsidies and emotional appeals.
I've also read elsewhwere that Gimmee Motors also
wants part of the DOE pie,but is unable to until the
Taxpayer money is paid back.
Hence, hurry up IPO.
The decline and fall of an idea ... or ... the hollowing out of a bad idea ... or ... the end of a solution that has been in search of a problem for over a century.
All of the above are different facets of the auto industry. It's a solution that has been constantly been in search of a problem, the outcome has been to massively build-out a whole series of problems! Adding millions of square miles of unproductive sprawl that does nothing but cost business - but are necessary to justify the added tens of millions of vehicles. Exhausting our domestic petroleum reserves, then those overseas with the outcome being worldwide credit expansion then collapse. Destroying our environment and ruining those dependent upon it ... such as a large part of agriculture. Creating the short- term and self- defeating 'economic necessity' of deep water and hostile environment oil production.
Our economic crisis is the various 'problems' resolving themselves the simplest way possible: by the entirety falling bankrupt.
The idea that every human needs a 4000lb personal transportation device is a really bad idea! Since expansion of that idea adds to capital costs - which costs evolve and cannot ever be caught up to - the outcome is a basically non- productive capital investment structure that collapses under its own weight.
That some people might drive and the rest might go fuck themselves is a bad idea but Americans have gotten comfortable with it. Being a bad idea means that the promoters can easily fool the government into 'support'. Call it the sex appeal of bad ideas. Since our entire so-called economy is a) based on auto use and fuel waste, and b) the auto infrastructure which directly includes most retail and the real estate industries, we are really up a creek without a paddle!
Why not reinforce failure?! If it doesn't work first time around, try the bigger hammer! After all, why fail quietly when you can die young and leave a beautiful corpse?
Think how much better the environment would be if we had no industry and we all lived on subsistence farms. Oh yeah, we tried that and had lifespans about 25 years (on average--mostly due to child and mother mortality).
Modern humans, especially in the US, made some bad choices such as choosing low density living. They made those choices, not because they were evil but because they were free to choose and that is what they wanted. Maybe you don't believe in freedom but my observation is that free societies are much more enviromentally concious than totalitarian states. The "Green China" BS Tom Friedman is alwasy pushing is just that: BULLSHIT. The US is amoung the most environmentally aware societies in the world, mainly because the people have voted that way (not always making sound decisions, but hey) Maybe our choices will come back to haunt us and maybe enviro-hysteria is just that.
The BP oil well disaster was not caused by Americans wanting to drive. It was caused by the US govt closing all virtually all shallow waters and land to drilling and forcing oil companies out into deeper waters to find oil (that and a little engineering incompetence by BP).
There is plently of oil that could be retrieved, not inexpensively but relatively safely, if the idiots running the country would allow it. Nuclear power could be a major source of electricity (French gets 85% of its electricity from nucs, and I don't see the enviro-nazis pointing out all the horrible environmental calamities in France--because there aren't any).
Without energy the economy collapes, billions die from famine and war that results and the survivors go back to primitive lives and early deaths. You can't have modern society without copious amounts of energy. We can gradually adjust our lifestyles (probably have too) but blaming it our people who made choices based on the freely available options at the time is just trying to raise the guilt level so you can sell us on the "Green Jobs" and "renewable energy" scam.
The "Green China" BS Tom Friedman.
he truly truly is a douche bag (damn just looked up that word). he spews green living and the jerk put in a snow melt drive way in his second home in aspen. and he initially was dissing the USofA at time of 9/11, oh those americans heat the outside with big heater set up on outdoor dining areas at restaurants. jerk your heating your fucking asphalt/concrete so you don't have to pick up a snow shovel. these kinds, hypocrites just sicken me to death.
LOL.
I'll bet Tom's stomach are arse are rather round from the lack of physical activity.
I haven't ever bought a vehicle purely for transportation.
There has always been a high powered, gas guzzling work of art in the garage (not all at the same time, of course) such as the Sting Ray, 911, BMW (car and bike), Triumph, Volvo P1800, and if I had the money there would be a much larger garage with plenty more exotics in there like the Shelby Cobra, Tesla, Mercedes AMG, and many more.
The conceivers and designers of fine automobiles are saints in my book.
True, a Ford Expedition, Suburban, or LX570 is a waste of resources for the masses. But I'm trying to imagine a childhood that didn't involve dismantling an old Ford flat head, or even now adjusting the points on a vintage '57 'vette, and '67 Sting Ray, extracting the heads to shave a few millimeters to get more compression......looks like a desert from here.
my most favorite car i owned was my '65 nassau blue convertible vette, with a small block chevy. no side pipes, i hate side pipes. had it for 10 years. me and the boys pulled the engine and had it rebuild bore out the cyclinders and valve job and all. keep it totally stock except wheels cause sometimes had to run snows.
had a '67 blue soft top mustang, not so fast.
'62 bug eye vette, floated like a boat.
my husband when he decided not to come home one night after driving his snowmobile off top of a mountain. left me a 1946 knucklehead harley, totally stock except tank had a custom paint job. and a 1946 chevy truck. he told me to never try and drive the harley though.
i do better on my bike now a days†
Harley-Davidsons and horses, better than foreplay.
Credit ?
Where are the buyers of $40,000-$100,000 going to come from....
It really does not matter that it is a car....
The question is just who is it that is going to buy ?
Perhaps this is only a top 1% of the population product ?
So the bet is not the top 1% moving to the masses number ?
In what period of time ? 30 years ?
..................................
Better to bet with TATA NANO $2500...?
..............................
The number has to be $10,000 ?
Who would have thought people would overpay for AAPL products?
the tide will go back out on AAPL before long.
Good points, all of you.
Since the early 1980's, I've been wondering how Apple stays in business with its overpriced, closed systems.
Tesla's enviro-friendly roadster? This is an oxymoron. The car is aimed at limousine liberals who want to say they're helping the environment while still despoiling the earth. An all-electric car, at this point in history, is a bad idea due to the energy storage problem (the battery). A fast electric car is even worse since it will waste more energy and require more battery.
Still Tesla may thrive like Apple thrives, without any logic behind it.
I agree with your points. I think there is a difference between Tesla and Apple though, in that people who can not afford a $400 iphone can buy on credit card. Not the same with a $100K sports car. The market for any car over $100K is self limiting.
As you say, battery technology is the limiting factor in cost/practicality of an electric car. I am hopeful that the Nissan Leaf will be successful, as it is projected to have a range suitable for most daily commuting. An established high volume product could help push battery prices down, and performance up.
There's a local electric/hybrid car maker, Aptera that was trying to get an exemption to the funding law since they make a 3-wheel unit that is technically classed as a motorcycle but meets auto standards, GM was fighting the change. Supposedly Aptera got $180M from the same DOE slush fund.
http://www.autoweek.com/article/20091002/CARNEWS/910029993
Bruce: I think this post is somewhat misleading. Those two loans to Ford represent about .125% of the company's outstanding debt, and are geared toward development of 'green' technologies. That's why the loans are subsidized.
You're right.$160,000,000 is chump change. We should lend them more right? We might create a few more jobs if we lent them a half billion. That would be good, right?
F has a market cap of $35b. They have a $200b balance sheet. So why do the taxpayers have to lend them 12 year money at cheap rates? Where do we draw the line on this?
My argument is that this is not on the Federal balance sheet. The amounts are small. But is comes to nearly a 1/4 billion. Is this really good policy?
What's policy got to do with politics?
And when is there ever going to be a time when politics is not part of the mathematics of any decision in this country?
You.....you...you...idealist, you. :- )
All one need do is read the DARPA analysis right on this page on F to get a real feel for how dangerous that company is. I give F a lot of credit for having hung in there as well as they have as compared to GM and Chiseler, but F still has a long, long way to go.
As far as Tesla is concerned, it's nice that they got their IPO done, but I am willing to bet that the same underwriters that made a killing on the IPO are going to make an even bigger killing shorting the s**t out of the stock down to nothingness. It's the underwriters' M.O.
Tesla can not be successful unless they produce an affordable car. I don't think you can build a company on a $100K+ sports car. On the lower end, hard for me to see how Tesla can compete with Nissan Leaf. You don't just spin a car company up overnight. You need huge network of dealers, service centers, parts suppliers, etc. Nissan can slip an electric car into their existing infrastructure/network, and if successful, expand the line. A key advantage of existing car companies is decades of knowledge/experience with reliability/safety/manufacturability. I am not a fan of the existing car companies, but one must acknowledge the huge knowledge and expertise base they have. Tesla trying to compete with existing car companies is akin to Transmeta's attempt to compete with Intel, or Eclipse trying to compete with gulfstream.
Short bust. There it is.
An IPO on a company with a low production product with even lower demand.
Call it what it is; the green version of the DeLorean. Homie will get busted with coke before you know it.
So, if Uncle Sugar can't sell all his candy, he sells it to his other hand? What kind of interest does he charge himself?
Well said Joe.
People pointing to Tesla as a credit thaw are just plain fucktarded.
It's been no secret that Tesla's been fishing for a way to make the DoE's complete inability to spend stim-u-less funds into lemonade for their future SoCal Mexi-CAN staffed manufacturing plant.
Nice piece of surveillance on the Uncle Sugar backstops, Bruce.
Taxpayer's remorse.
Has Tesla's ex-wife already dumped the shares she received in the divorce?
Ask Jim Chanos what he thinks of Ford...