Last month the San Francisco Examiner published an article posing the question, what will San Francisco do if PG&E shuts the lights out to prevent causing a fire?
In a recent filing with the California Public Utilities Commission, PG&E explained that if the utility has to turn off, or “de-energize,” high-voltage transmission lines in the East Bay to prevent the start of a wildfire, power to the entire city of San Francisco could also be turned off. And it could be up to five days before power is restored.
Are we as a city — and each of us individually — prepared for that?
Imagine The City with no working traffic lights. Cellphone networks and internet phone lines could fail. People who depend on medical equipment, like oxygen machines, could be at risk. Food could spoil without refrigeration, both in restaurants and in homes. Schools would likely close for the duration of the outage. Hospitals, police stations, and the airport could continue to operate on backup generators, but with reductions in services offered.
And then there’s water and sewage. Gravity helps move water from Hetch Hetchy and other sources into the City’s largest reservoirs. But we need electricity to pump water from the reservoirs to homes and fire hydrants. And we need electricity to operate wastewater treatment plants.
Imagine The City with no working traffic lights. Cellphone networks and internet phone lines could fail.
The author also mentions that preparing for PG&E to pull the plug for a few days would be good practice for when “the big one” hits.
Folks, this whole idea of purposely shutting off the power to one of the most populous cities in the country is just nuts. If it weren’t for the wacko environmentalists in this state, no one would even think this was a rational idea; especially in the case of a “preventative blackout”.
If the power went out for a mere 24 hours, San Francisco would start turning into a Mad Max world. After a week of no food, electricity, drinking water, and gasoline; is there any doubt that the place would need the National Guard? Do you really think a city whose citizens can’t afford toilet paper and hates the Second Amendment will voluntarily maintain social order in tough times? I think roving bands of Oakland Raider fans will be raising all sorts of chaos. Add a few fires into the mix when firefighting is a sketchy proposition and the place has real potential to go downhill fast.
PG&E might be the catalyst that ends the idea of San Francisco as a sanctuary city. Playing XBOX surrounded by armed guards at an ICE holding facility might look like paradise in comparison.
In this age of just in time delivery, any interruption to supplying stores with inventory will have huge consequences. A prolonged blackout or severe earthquake in SF or LA will see additional loss of life and property. I, for one, don’t want to be anywhere near the epicenter of either event.
If Elon Musk had a dollar for every dream he has inspired in utopian Liberals, this might be a fair fight. Wally World is suing Tesla in New York State for causing rooftop fires due to defective solar panels. This looks to be a fun scrap. This is doubly juicy because Tesla in making solar panels in New York State with taxpayer subsidies.
Walmart Inc. sued Tesla Inc.’s energy operations, formerly known as SolarCity, for breach of contract, claiming it failed to live up to industry standards in the installation of solar panels on top of hundreds of stores, resulting in multiple fires across the country.
The retailer said it had leased or licensed roof space on top of more than 240 stores to Tesla for the installation and operation of solar systems. But as of November 2018, fires broke out at no fewer than seven of the stores, forcing the disconnection of all the solar panel systems for the safety of the public.
In a complaint filed in New York state court Tuesday, Walmart said its inspectors found that Tesla “had engaged in widespread, systemic negligence and had failed to abide by prudent industry practices in installing, operating and maintaining its solar systems.”
Many of the panels had defects that could be seen by the naked eye or were easily identifiable with proper equipment, Walmart said, indicating that Tesla had deficient inspection procedures or hadn’t been inspecting the sites at all. The retailer’s inspectors saw dangerous connections, including loose and hanging wires at several locations.
“Many of the problems stemmed from a rushed, negligent approach to the systems’ installation,” Walmart said. “Tesla’s predecessor-in-interest — SolarCity — had adopted an ill-considered business model that required it to install solar panel systems haphazardly and as quickly as possible in order to turn a profit.”
Tesla didn’t immediately address the retailer’s complaint.
Oh, speaking of Tesla and product liability, I’ve been sitting on this one for a while.
Tesla sued for homicide…again.
A Tesla car, running on Autopilot, skidded 1,600 feet after sliding under a semitruck at 68 mph, shearing off its top and killing its driver, according to a lawyer who is suing the carmaker.
The crash in west Delray Beach happened four months ago when a tractor-trailer pulled out in front of a bright red Tesla Model 3 driven by 50-year-old Jeremy Banner.
The Autopilot system failed, according to a lawsuit Banner’s family filed Thursday in Palm Beach County. The system should have braked or swerved to avoid the semitruck, Trey Lytal, the family’s attorney, said at a news conference.
About 10 seconds before the crash, Banner engaged the Autopilot system, according to a preliminary report from the National Transportation Safety Board.
The City of Sacramento will implement rent control in limited circumstances in an effort to get supporters to pull a more far reaching rent control ballot measure that was scheduled to go for a vote next March. To implement this new scheme of government intrusion, of course a new tax is required to be paid by property owners who no doubt will raise tenant rents as a result. The stories that I read in the media are silent on whether all rental property owners get to subsidize this program or only the ones covered by rent control—this being California you shouldn’t make assumptions on such matters.
The Sacramento City Council is expected to approve a local rent control measure Tuesday in a compromise between city officials, labor unions and developers. The agreement – which will cap rent increases for older housing – will avoid what likely would have been a bitter, multi-million dollar political campaign next year.
In its new form, the Sacramento Tenant Protection and Relief Act, which the council will consider at its 2 p.m. meeting Tuesday, will create a set of renter protections for tenants who live in housing built prior to Feb. 1, 1995. The ordinance will cap the amount that landlords can increase rent each year; prohibit landlords from evicting tenants without a reason; and create a process where tenants can report landlords who violate the act.
The proposal is a compromise that’s the result of months of talks between city officials and advocates who gathered signatures to put a stricter rent control measure on the local ballot in 2020, said Councilman Steve Hansen, who led the negotiations.
Create reporting system so city can help tenants fight property owners
For some reason, this law will only apply to housing built before 1995…at least for the first five years then the City Council will review the ordinance for further modification.
Rent Cap
The ordinance will prohibit landlords from raising rent more than 6 percent plus the “consumer price index” percentage for the West Region per year.
Landlords will never be able to increase rent more than 10 percent, even if the CPI ever exceeds 4 percent, the ordinance says.
Eviction
The ordinance will also prohibit landlords from evicting tenants, unless tenants stop paying rent, are criminally charged, are illegally selling drugs, fail to give landlords access to the unit, or otherwise violate their leases.
The ordinance will bar landlords from evicting tenants for no reason, and require they give tenants an option to renew their lease, Hansen said
Landlords will still be able to evict tenants if they are making certain repairs or selling the unit, under certain circumstances, but will have to show proof, and will need to give the tenants an extensive 120-day notice.
The act will cover tenants who signed leases that are month-to-month or longer, those who live in apartments, mobile home parks and single room occupancy hotels, Hansen said. The act cannot legally apply to tenants renting single-family homes, though, unless they have been converted in to multiple units, such as duplexes.
New City Bureaucracy
The ordinance will require property owners to pay a fee, likely between $15 and $20 per unit per year, Hansen said. The fees will go toward running the program, enforcement, and tenant/landlord education.
Landlords will be able to apply to impose higher rent increases in front of city hearing officers, but only if they plan to make significant improvements to the units, the release said.
Remarks
As with anything Liberals do, this is a beginning and not a destination. I expect rent control to be expanded further via one of three vectors.
1 When the five years is up, the City Council will move the year 1995 up to 2000 (ahead five years) or more thus including even newer construction. 2 Via the ballot measure which is supposed to be on the Statewide November 2020 ballot. 3 Via direct Legislative action.
In spite of the claims of landlords evicting tenants with ease, this is fantasy. It takes many months and thousands of dollars to get someone to move out of your property unless they voluntarily agree to do so. In such cases, property owners spend thousands of dollars to repair the property so they can rent to someone else. Folks that refuse to move out are typically the ones that ruin floor and wall coverings, strip the place bare of appliances, plumbing fixtures, and vandalize the crap out of places.
Any time rent control is implemented, it is a de facto confiscation of private property. The property owner is then a vassal of the government and in a practical sense, the control of the property is forfeited without just compensation. In short, rent control is theft using the power of the sword. In the old days we called such government acts “tyranny”, but now it’s called “fairness” or some other innocuous name. George Orwell would call this “doublespeak”.
This blog and commentary is the result of current events over the last year exposing CalRecycle as a farce and nothing more than a government mandated “feel good” program. This mostly came to a head with the shut down and bankruptcy of RePlanet, a large recycling conglomerate, on Tuesday of this week.
Citing the increased costs of processing recycled items, RePlanet, California’s largest operator of recycling redemption centers has closed, leaving 750 employees out of jobs.
The Ontario, California-based company has closed all 284 of its centers, according to the San Jose Mercury News.
Company President David Lawrence told the newspaper the decision to close was due to increased business costs and falling prices of recycled aluminum and polyethylene terephthalate, or PET, plastic.
Recycling was essentially mandated in California in 1989 and on its surface it actually was a good idea. The premise was that we should try to divert as much waste as possible from our landfills. The program introduced recycling and green waste composting programs to help toward a goal of diverting 50% of all waste over a period of 30 years. In Sacramento County, we had just a garbage cart, then we got a green waste cart for all yard waste, and got 3 small bins for recycling. We had to separate the recycling into a separate bin for paper, glass, and plastics and aluminum. As a result, instead of 1 truck picking up said waste now a 2nd truck was required since the yard waste and recycling is collected on alternate weeks. In some parts of California such as the Bay Area, recycling is picked-up on a weekly basis.
As with any government program, an entire new department was created “The California Integrated Waste Management Board” to oversee this program as well as the California Redemption Value Program (CRV). This CRV is what you pay to the State of California on most plastic, glass, and aluminum products when they are bought at the grocery or liquor store. Prior to this, glass recycling was done at a local level by the private sector. Buy a Coke or Pepsi product at the grocery store and return the bottle and you got a nickel from the store. Government was not involved or mandating this program, it was purely a function of the private sector. Now, what the store collects is remitted to the State. I will now discuss the demise and issues with this system.
First the city and county administered programs: I cannot blame them entirely since when the state mandates it, you either do it or face a daily fine until you comply. After a few years, the 3 separate bin system with replaced with an additional cart, for mixed recycling. This was due largely to more material being eligible to be recycled, but I have a feeling worker comp payouts mounted due to a person having to physically lift and dump these bins into a contraption that loaded into the truck.
I am in favor of collecting more recycling and diverting it from the landfill, but this was a case that backfired. There was never a system or check in place in regard to contamination….this is how the program was destroyed. You see the bin is collected, and the contents of the truck are compacted and smashed repeatedly until the truck unloads at a sorting facility. There workers manually separate, combine and package the recyclables to be sold to China or another broker who does the physical recycling. Up until a couple of years ago, China took everything and asked no questions. Recently, they have tightened up their contamination standards and as a result quite a bit of “recyclable product” has been diverted to the landfill. Please note that China’s change of heart on taking our trash to be recycled predates any controversy related to President Trump’s trade policies.
Yep, we aint recycling the contents of your recycle bin, just burying it in the ground like everything else…but hey…you still get to feel good about saving the environment and the planet (at least until you read this blog).
Let’s take look at how lucrative this program has been to Sac City residents….according to their website “recycling sales” or product sold to China/broker etc. totals .79% of the revenue….OUCH!
The reserves have been depleted to a point the City will be increasing residents monthly trash bills by $12 a month over the next 5 years. Think about that one! Also the City has to start collecting “food waste” by 2021, so an additional cart, added fees, and a new rodent problem anyone? The program is literally bankrupting a local municipality.
Now let’s take a look at the downfall of RePlanet. RePlanet is or was a recycling outfit known for their small container sized booths usually located in shopping center parking lots that collected cans and sometimes plastics for recycling and paid you for the product.
On Tuesday, RePlanet closed all of its 284 locations and laid off all 750 employees citing an uncompetitive environment to do business. Digging deeper, the dirty little secret of how this business failed should not surprise anyone, as 40% of all recycling locations have closed in the past 5 years. It was a scam. Did you ever notice that at the register you were charged $.05 or $.10 “deposit” on the product, that is per item, but if you then took the container to a recycler, you were paid a rate “per pound” meaning you collected far less than your deposit. So if you didn’t actually recycle the material yourself, say you put it in your bin, the state kept the money and subsidized these operations taking place all over the state. The state payments did not keep up with inflation/regulation and as a result, these recycling centers have disappeared.
As someone who recycled religiously, I can say firsthand that it started making very little sense to do so a few years ago. The payments became less and less to the point where you questioned even making the trip. Honestly, if you think about it, look at it this way; RePlanet–like any other non-government entity–is in business to make money. They have to rent the space for their booth (this isn’t cheap, and can run about $1000 a month by the way), pay the employee minimum wage (this company had Bay Area locations paying higher than Sac County wages), benefits, workers comp, and had to pay customers for the product. The numbers did not add up at all. Couple that with smugglers bringing product in from over state lines (NV and AZ don’t have a recycling program) so they use ours to their advantage and you have a basically bankrupt CalRecycle program. RePlanet’s demise is a very big hit to a portion of the population that recycles for the cash as a means to make ends meet, and believe me there are quite a few. In years past, you might remember homeless folks scavenging your recycle bin the night before pickup but they haven’t been doing that lately, now you know why.
So here we are, stuck in a nasty catch 22; on one hand, we have a state department of recycling mandating that we divert 50% of our waste (that number is going higher by the way) and on the other hand, we have China is no longer accepting our recyclables. State officials are presiding over a bankrupted system as far as redemptions go, but they are still happily collecting the CRV taxes.
I spoke to a member of my church who was heavily involved in creating the program for the state and he was very contrite with me saying the program had good intentions but has badly missed the mark…he even spoke of regret setting this system up. He said the idea of household recycling was great, except people intentionally contaminated their bin, leading to the load being trashed as opposed to re-used. You encourage people to bag their own recyclables and take to a recycler, but when you are paid only a pittance, what is the point? He also shared that before he retired, for 10 years in a row, more pounds of aluminum cans were recycled through one of these “redemption centers” than were actually sold in California! Try that one on! Especially when he said participation among residents could not have been higher than 20%. In addition, the cost to recycle items in this state far outweighs keeping them out of the landfill…his words not mine.
Final Thoughts: It should surprise no one this is ending badly; whenever the government gets involved, the outcome is less than ideal. A new department was created, hundreds or thousands were hired, and here we are trying to pick up the pieces and do an autopsy on the recycling program while the CRV program is charging full speed ahead on autopilot. It started as a great idea and it remains a good idea, which may upset some readers of this blog, but keeping things out of our landfill where they can leach into our water supply is paramount to our existence. The problem is when the program is taken advantage of by scammers or intentionally contaminated by people not caring. As a result everyone is losing, we pay more for garbage service, can no longer reap a benefit of recycling, and now have reusable bags and containers foisted upon us constantly.
I think the answer is something of a hybrid, I think the recycling system for residents should be optional… but you pay a higher price if you opt out. This stops people who don’t care or intentionally are contaminating. Opting in, gives the local hauler or municipality the right to inspect your container to make sure it isn’t contaminated…you’re getting a substantial discount so you give up privacy, sorry. The centers that collect products should be more readily available and maybe this is a collaboration of business and government where a detailed business plan and rate of return can be achieved. Ok maybe not the greatest answer to a problem, but once again a crisis has come out of something we thought was an easily solvable “green” answer.
The Chief
Editor’s Comments:
I think the State of California needing to ship our waste to another country to run a sustainable recycling program is proof that this recycling scheme was poorly thought out. By the way, California is not the only State shipping waste to other countries. To lift a phrase, what happens in California should stay in California. We should recycle our own waste. While I prefer a private sector solution, this might be something the Prison Industry Authority (PIA) might want to get involved in. How about some welfare to work program opportunities? Folks, as rare as it is for me to say it, this kind of problem is one where Elon Musk might actually be the go to guy. Elon likes to dream stuff up and use taxpayer money to make it happen; plus, he likes a challenge.
The bad news from Tesla keeps piling up. Yesterday I saw this about their response to declining sales on their Model S & X cars. Free charging for life.
In a turn of events, Tesla has now announced that all new customers of the Model S and Model X can access free unlimited charging at any Tesla supercharging station.
My son-in-law (he earned the title yesterday), bought a Tesla a few months back and got free charging for the first six months of ownership. As previously documented, the difference between the Supercharge station and the other two forms of charging is huge—in terms of time.
However, the big news to me in this article was the cost of charging.
A few years ago, Tesla offered free supercharging to customers; until the offer was revoked by Musk for being unsustainable for the company in the long run. With the cost of supercharging in the US being pretty much equal to the cost of gas ($0.28 per kWh), this may have been one of the reasons Tesla customers have been abandoning this part of the product line.
OK, so if the cost of charging your car is the same as gasoline, what exactly is the savings of owning the car?
Please note that the logic of electric vehicle ownership goes off the rails at this juncture. If the cost of charging is the same as gasoline, where is the cost savings when your state—or the federal government or both—introduce the dreaded mileage tax? Filling up my gasoline powered car takes less than five minutes while the Tesla supercharge station gives you only a mostly charged vehicle after 45 minutes. Don’t forget, should you resort to 110 VAC charging, you may be waiting a whole day for a charged battery.
Also, as others have documented, Tesla has made no changes to the Model S & X cars since they were introduced except some software updates. Oh, don’t forget that the designer of said cars also quit working for Tesla so there is that. Elon is selling old tech for premium prices. If Tesla goes under, he might have a future with Apple since they do the same thing.
Previously, Elon Musk claimed that the value of his cars would appreciate over time—something heretofore impossible in the history of automobile manufacturing. Tesla does retain its value better than many other cars with 69 percent resale value after three years but there appears to be a catch, Tesla won’t honor their warrant on the car’s battery if you buy one secondhand.
Here’s the details:
Tesla will appreciate in value
Tesla Inc.’s Elon Musk is standing by a claim that the company’s electric cars will be appreciating assets once they’re capable of driving themselves.
Musk, Tesla’s chief executive officer, first made the claim in a podcast interview in April that the company’s vehicles will gain in value because they’ll eventually be capable of fully autonomous driving. He stood by this in a reply to a follower who wrote Tuesday that he was unsure if the CEO was joking or making a “really dumb” statement.
With the exception of collectors’ cars and other rare cases, depreciation has been a fact of life for automakers, dealers and rental-car companies for decades. While Kelley Blue Book has handed Tesla a best resale value award for its Model 3, for example, the car-shopping researcher estimates the sedan retains about 69% of its value after three years.
Tesla promises to warrant their battery for 8 years
Tesla car battery has an eight-year warranty. With this warranty, repairs and replacements are free. Such repairs may include defects in the workmanship or materials of any of the battery’s parts.
If there are any parts that are malfunctioning or if the battery is defective, Tesla will repair or replace the unit. The warranty will also be covering any damage that may happen to your vehicle in the event of a battery fire, even if this may be because of driver error.
Thanks to the diligent work of our staff, it has been brought to my attention that Tesla won’t uphold their promise to honor the warranty on the car’s battery. Folks this has gotten so bad that Tesla has been hit with a class action lawsuit.
Tesla is facing a class action lawsuit filed by consumers who claim that the car company does not honor battery warranties on pre-owned vehicles.
The plaintiff alleges that after his research, he decided to purchase a 2014 “certified pre-owned” (CPO) Tesla Model S 60.
“All of the marketing materials that Plaintiff saw in the news, be it Tesla.com and/or Teslamotorsclub.com and/or other car-buying and automotive websites indicated that the used CPO vehicles sold by Tesla were given a 270-point inspection and that it was customary for Tesla to take care of repairs and issues with their vehicles,” the Tesla class action lawsuit states.
The plaintiff alleges that he depended on Tesla’s “marketing, advertisements, and representations” that his vehicle would be fully inspected and certified.
After he took the vehicle home and started to charge the battery, he reportedly found out that the battery only lasted 166 miles on a full charge.
The plaintiff claims that he brought the car to a service center and they made a correction to the Battery Management System (BMS), but that didn’t fix the problems with the battery.
The Tesla class action lawsuit alleges, “Plaintiff was told to report back to the service center after driving around with the car and after ‘cycling’ the battery, which refers to the practice of charging to 100% and discharging the battery to low levels for purposes of recalibrating the battery.”
The plaintiff claims that Tesla informed him that his vehicle suffers from “normal battery degradation.”
“Despite the fact that Tesla warrantied Plaintiff’s vehicle with a 2-year, 100,000 mile limited warranty, and the fact that it provided a 8-year, unlimited mile battery warranty, Tesla has failed its duty to Plaintiff by unlawfully, improperly, and fraudulently denying proper service and repair of Plaintiff’s vehicle,” the Tesla class action lawsuit alleges.
“Tesla focuses its efforts on allaying the fears of what some drivers of electric vehicles call ‘range anxiety’ by representing to consumers nationwide that they can rely on Tesla’s promises to take care of them no matter what happens to the batteries of Tesla’s vehicles. As it turns out for many consumers who were led on to believe Tesla’s promises, the fact is that Tesla never actually meant to keep their promises and follow through on their guarantees,” the plaintiff states.
The Tesla class action lawsuit is alleging violations of the federal Magnuson-Moss Warranty Act, Federal Trade Commission Act, Used Motor Vehicle Trade Regulation Rule, and numerous California laws including the Song-Beverly Consumer Warranty Act, Consumer’s Legal Remedies Act, Unfair Competition Law, and Violation of California’s False Advertising Law.
Elon may regret the decision to manufacture cars in California once he gets to experience firsthand the litigious, antibusiness climate in the once Golden State.
Tesla reputation will fade
Folks this is a big deal because Tesla batteries are in more places than just their cars. Elon’s solar empire—weak as it may be—is also dependent on using Tesla batteries. In some circles, Tesla homes are a thing. The fact is Tesla batteries are just like everybody else’s, it’s just that Elon—like Apple—can charge a premium just by putting their name on something. Oh, and unlike most manufacturers, Tesla’s battery factories are built with taxpayer subsidies.
I know that replacing a battery on a hybrid car is about $3K but a Tesla is much more.
Do you need to replace your car battery? … how much will it cost to replace a Tesla battery.
Answer is between $5,000 to $7,500 and it depends on what model Tesla you drive.
Folks, I expect this to be the beginning of a trend as more Tesla cars hit the road. It’s no secret that quality control issues have plagued these vehicles from the beginning. Elon keeps claiming the future will be better but it’s the past that he should hope never catches up with him.
Corporate America—especially now that we’re in the 90-day life cycle—has a habit of being ruthless in the pursuit of profit and struggle for survival. When they miss their numbers, there’s hell to pay—usually for those at the lowest pay levels and occasionally in middle management or higher.
This week, Tesla missed their numbers badly even with the market expecting them to report a second quarter loss. Elon not only missed the reported target but the entire side of the barn; hence, all Musk’s recent media stories about dreams of a better future leading up to release of said report. Can you blame him? Who’d want his track record at Tesla?
Tesla plunged 10% in extended trading after posting a larger-than-expected loss on Wednesday in a second quarter earnings update.
Here’s what Tesla reported, versus what analysts expected based on average estimates compiled by Refinitiv: * Loss per share on an adjusted basis: $1.12 vs. 40 cents expected * Revenue: $6.35 billion versus $6.41 billion expected
In the wake of this report, some on Wall Street are saying that Musk needs to step down.
When asked if Tesla was worth buying after an ugly quarter, Paul Schatz, president and chief investment officer at Heritage Capital, told Yahoo Finance, “It has very idiosyncratic behavior, but no, [Musk] is not a future leader.”
“You’re going to have Mercedes and BMW and all the real car companies competing with them in the next five years, and I think they are much more well-positioned financially,” compared to Tesla.
Schatz pointed out that while Tesla may have had a head start out of the gate, the company is not taking full advantage of that position. Management is a major concern – the latest example in a series of departures is the company announcing on its earnings call that Chief Technology Officer JB Straubel was stepping down from his position and transitioning to an advisory role.
Schatz compared Musk to Microsoft founder Bill Gates – or at least suggested the Tesla leader should aspire to be like Gates in one particular way. “All great entrepreneurs eventually, like Bill Gates, all step back and say, ‘I’ve taken my company as far as I can go and need to bring in somebody that has a corporate backbone to it,’” he said. “The wrong guy is running the company.”
As for whether investors should bet on the car maker, “unless you’re a nimble trader, I think it’s lunacy to go near Tesla,” Schatz said, adding that he doesn’t see it “as a sustainable long-term business model.”
While firing Elon, might make sense in a saner world, given his volatility and the turnover of his executive staff, I don’t see that ever happening. Musk is his own worst enemy much of the time. I think it likely that he gets to ride Tesla to the bottom—which many define as a stock value south of $100 per share.
Tesla’s only hope for salvation is periodic infusions of government directed money. With the phasing-out of American tax credits and today’s economic reports about Germany’s manufacturing decline—something that will ripple thru Europe, the future cash expected from the EU and other places may be less than promised which will make Tesla’s finances even more dire. If the economy catches a cold, Tesla will suffer a severe case of pneumonia.
Elon Musk’s second quarter report card is due tomorrow (07/24/2019). As such, he dropped a few more nuggets for the faithful about what he might be able to do in the future, probably because the present is such a miserable place to be right now.
Future performance not indicated by past results
Elon is touting patents of technology that might become a reality at some future date, whether he’s the one still alive to do it or not is a debatable point. One involves automobile wiring harnesses and the other stamping body panels. Neither is anything other than a concept right now.
Elon Musk doesn’t want past performance to be used as indicator of Tesla’s future
Please note the tone of the opening paragraphs.
Elon Musk believes the way to usher in a new age of EVs is by going back to square one and tackling the fundamental issues with production.
Tesla just designed and patented revolutionary new wiring architecture, which will enable robots to build the upcoming Model Y.
Now another patent has revealed that Tesla is also moving to a new, full body aluminum casting design; rather than a series of stamped steel and aluminum pieces.
Oh, the headline is deceptive because Tesla has no such casting machine, only a patent on a concept for one which is a very different proposition. All that’s missing from the above article is Billy Crystal’s line from City Slickers that “Life is a do over.”
Apparently, Elon is signaling that he blew it with what he’s done at Tesla and needs another paradigm. Translation: give me yet more time. Like a stopped clock, the faithful hope that he eventually will get it right.
Next nugget, Apple hired Tesla’s VP in charge of design.
Apple Inc. has hired Steve MacManus, at least the third Tesla Inc. engineering executive to join the Cupertino, California-based technology giant in the last year.
MacManus, a Tesla vice president in charge of engineering for car interiors and exteriors, left the carmaker recently and has since joined Apple as a senior director, according to his LinkedIn profile. He worked at Tesla from 2015, after stints at Jaguar Land Rover, Bentley Motors and Aston Martin. His interior-design skills may be applicable at Apple beyond the development of a car.
This should fuel even more rumors about the mythical “Apple Car.”
Apple Car
Sales data sliding
The last nugget which is related to the previous one is that Tesla sales are tanking on their high end vehicles.
The luxury sedan that put Tesla Inc. on the map is starting to show its age, with new registrations of the company’s Model S plummeting 54 percent in the second quarter in California, The Wall Street Journal reports.
Similarly, new California registrations of the Tesla Model X fell by about 40 percent in the second quarter, the Journal reports, citing data from the Dominion Cross-Sell Report.
California is Tesla’s single largest market in the U.S., accounting for about 40 percent of Model S sales last year alone.
The Palo Alto-based automaker has shifted its focus to the Model 3, which is half the price of the Model S.
Meanwhile, the company itself says production and sales of the Model S and X have plummeted.
This time last year, Tesla built 24,761 Model S and X cars — a number that fell 41 percent to 14,517 cars in its most recent quarter.
Analysts say that’s partly due to Tesla’s decision not to update either car.
So the chief car designer for Tesla leaves and goes to Apple and then surprise; a story emerges that Tesla hasn’t updated their higher priced cars since they were introduced and as a result their sales are tanking. Sounds like Elon is lightening the payroll to me.
Maybe those rumors of Apple buying Tesla should be given another look. Tim Cook could do it with his lunch money and still have enough to buy Intel’s mobile chip business.
Elon Musk is in the news again with another distraction so it must be about time to report Tesla’s second quarter earning’s reports.
First, the distraction.
Neuralink, the secretive company bankrolled by Elon Musk to develop brain-computer interfaces, will provide its first public update later today in an event streamed over the internet.
“We’re having an event next Tuesday in San Francisco to share a bit about what we’ve been working on the last two years, and we’ve reserved a few seats for the internet.”
This could be the big reveal of what the mysterious company has been up to since Musk announced it two years ago, and hired a pack of leading university neuroscientists to pursue his goal of connecting human brains directly to artificial-intelligence software.
Elon wants to hook your brain to a computer for some unknown reason. MIT—authors of the above article—speculated that Elon would demo a monkey playing a video game. Based on what I know, it doesn’t take much brain power to play video games so Elon will have to do better than that to get my attention on this project.
Meanwhile, several pieces of Tesla news have surfaced in the last few days.
Sales
Tesla has been claiming that sales are up so of course to they announced another price cut. This is contrary to common sense but this is the company fathered by Elon Musk.
Tesla delivered more electric cars in the second quarter than any three-month period in its history, alleviating concerns that demand is waning for its stylish vehicles as tax incentives in its main U.S. market begin to phase out.
Despite the heartening news Tuesday, Tesla still hasn’t proven it can consistently make money despite repeated promises from CEO Elon Musk to reverse the company’s long history of losses.
Musk himself has already acknowledged Tesla will post a loss for the past quarter, but forecast profits after that—something he also did last year, only to be proven wrong. Analysts polled by FactSet are predicting the company will absorb a loss of about $228 million for the second quarter. If those projections hold true, Tesla will have lost nearly $1 billion during the first half of this year.
Tesla workers have told CNBC that, in order to meet Elon Musk and Tesla’s delivery quota for the second quarter, that they were subjected to unfathomably harsh conditions and took numerous manufacturing shortcuts.
This “bombshell” should come as no surprise anyone who has followed the Tesla story.
However, Tesla operates its manufacturing business in what is called an “open-air tent factory,” and employees told CNBC that they were forced to work through freezing nighttime temperatures, excessively hot daytime temperatures, and even unhealthy air quality brought on by wildfire smoke.
Elon Musk doing his Captain Blith impersonation
Whereas most legitimate automobile manufacturers rely excessively on robots and other automatic means of production to meet delivery estimates, these employees said they themselves had to bypass the robots and put the cars and battery packs together themselves.
This included the use of electrical tape to fix some defects. Great. That should rival being able to trick an autopilot-enabled car with table salt.
The grander point about how Tesla is being run is a referendum on Elon Musk. If these same stories came out of any other legitimate car manufacturer, the entire industry would be in an uproar.
Managers would get fired, senior management would be forced to resign, the stock of that particular company would fall, and government regulators would be all over that company in less time than it takes a BMW to go from 0 to 60.
This isn’t even the first time we’ve heard about worker conditions. It’s been going on for two years.
But because this is Tesla and Elon Musk, everyone seems to turn a blind eye.
Mark my words: If vehicles were delivered in this quarter under the conditions that these employees describe, consumers should worry that they are going to suffer from higher-than-average mechanical and recall problems.
Autopilot claims scaled way back amidst programmer mutiny
A day after Elon Musk suggested that auto-driving Tesla cars might not be sold to the public and could instead be hawked as robotaxis, a report dropped revealing that in recent weeks nearly a dozen Tesla Autopilot engineers had already hit the eject button.
You can’t make this stuff up.
Tesla Engineers: We’ll Drive Ourselves Home As many as 11 individuals on Tesla’s software Autopilot team departed the company during the past few months, according to The Information, continuing a purge which began when Elon Musk booted the team’s leader in May.
The significance of these Autopilot departures cannot be overstated. One of the highest profile functions of future Tesla vehicles is its ability to drive itself.
While there are other competitors in this market, for 10% of this division’s workforce to get up and leave means that they do not believe the timeline that Elon Musk has set for the product is in any way realistic.
And that’s not the only problem: There has always been doubt regarding the safety of Tesla’s Autopilot system, not only in its supposed ability to reduce crashes, but also in the numerous crashes in which it has allegedly played a part.
The article above calls followers of Musk a “cult.”
This should tell investors and consumers a lot about company culture. It is a personality cult. The product itself has a cult-like following. Tesla is all about Elon Musk.
Musk certainly has cast a spell on the true believers of his utopian dreams. He has made an irrational and emotional connection with people that willingly follow where he leads. These folks are convinced that Musk is singlehandedly transforming the world and the cosmos. They can’t wait to follow him to Mars.
My problem with Musk is that he doesn’t risk his own money to do anything, he always manages to fund his ventures with tax dollars and gullible investors. He starts much and finishes nothing. He is the 21st Century P.T. Barnum.
P.T. Barnum
Musk claims economic miracle
Oh, if you thought Burger King and Bill Clinton had cornered the market on whoppers try this from Elon:
Tesla Inc.’s Elon Musk is standing by a claim that the company’s electric cars will be appreciating assets once they’re capable of driving themselves.
Musk, Tesla’s chief executive officer, first made the claim in a podcast interview in April that the company’s vehicles will gain in value because they’ll eventually be capable of fully autonomous driving. He stood by this in a reply to a follower who wrote Tuesday that he was unsure if the CEO was joking or making a “really dumb” statement.
Quinn Nelson, the owner of a media company that produces videos about tech products, kept engaging Musk in a debate over the claim, which Nelson said “makes no sense.” The CEO replied that Tesla is bundling full-self driving — or FSD — into all cars the company builds, and that Tesla will be unable to keep up with demand when the vehicles are capable of complete autonomy.
With the exception of collectors’ cars and other rare cases, depreciation has been a fact of life for automakers, dealers and rental-car companies for decades. While Kelley Blue Book has handed Tesla a best resale value award for its Model 3, for example, the car-shopping researcher estimates the sedan retains about 69% of its value after three years.
The wheels are falling off the Tesla dream. Musk would rather be doing other things than running this company and it shows. His attention and passion are elsewhere. He is a butterfly searching for the next colorful flower to pollinate.
Back in August 2018, the Knights of Columbus (a Catholic Church volunteer group) was served a lawsuit by a vendor alleging insurance fraud and manipulation, essentially running a Ponzi scheme.
U.S. District Court in Denver against the Knights of Columbus, claiming the Catholic-charity behemoth is using “phantom” numbers to fraudulently inflate its 1.4 million insurance pool of mostly aging members.
The lawsuit, filed Tuesday by Greenwood Village attorney Jeffrey Vail on behalf of UKnight Interactive and manager Leonard Labriola, accuses the charity of artificially claiming that it has 1.9 million insureds worldwide by counting members who have dropped out. It also accuses the charity of stealing the company’s trade secrets.
Another Catholic organization facing serious lawsuits stemming from misleading its members…heard that before? Sadly, as a member of said group, the lawsuit is wholly WITH merit, and not a baseless claim, as some may have you believe. See I work in the business and I can say there is manipulation and cooking the books taking place and has been for some time. I am here to tell you the insurance arm of this organization is a Ponzi scheme and will fail by 2033 if things don’t change rapidly. I will lay out my thesis and reasoning below.
First basic insurance 101: The company charges you a premium, and if nothing happens the insurance company gets to keep it, if something happens, they must pay out for a covered loss. One reason this line of work is very profitable is you pay them in today’s dollars, they pay out as long as 30 days after the incident, pocketing the difference. The monies collected can be invested, but a reserve enough to cover a certain threshold of claims must be kept liquid in order to meet obligations should they arise!
In the case of the Knights of Columbus (KOC) they only sell life insurance, annuities, retirement, and long-term care policies to members and their spouses. As a result, they have a very small pool from which to choose since members must not only be Catholics but a member of the organization! In the case of all these products, claims are not anticipated for years after buying the product; in many cases, life insurance never will pay out! However, the organization is aging and has not been able to attract younger members to backfill the monies now being paid out to dying members. Worse yet, every major player in California has ceased selling long term care as it is very underpriced and most companies with policies remaining are doubling prices annually just to tread water! Even worse, the Knight’s products are not priced adequately, many far below the premium of far more reputable companies such as the carrier I represent! Problem is, in recent years, the amount of money paid out, has far exceeded monies paid in, resulting in an operating loss.
“Indeed, the KC Supreme insurance program is only one step removed from a classic Ponzi scheme,” the lawsuit says. “This case involves an elaborate scheme of racketeering, fraud, deception, theft, and broken promises by the Knights of Columbus Supreme Council (KC Supreme) and two of their senior executives, Thomas Smith and Matthew St. John.”
The problem lies in a couple of areas, like many groups and organizations not involving drinking or trips to a gentlemen’s clubs, the membership skews older. KOC is no different. Over 30% are over the age of 70. Most of the Knights in this age group own multiple policies totaling several hundred thousand or possibly a million dollars. But that’s ok because what about the other 70% right? Well here’s the issue, they are inactive. They only joined because their parent/grandparent made them and has been paying their dues. (Think CRA but not as far down the drain.). The reality is that this group has not bought the insurance, thus saddling the KOC with an aging membership controlling most of the insurance liability to be paid upon death!
Most phantom members are younger men who quit because of the demands of raising children and families, the lawsuit says. Aging and retiring members tend to remain active, it says.
For example, KC Supreme advertised on its website that it had 45,000 new members in 2010, while counting phantom members and omitting the fact that with the numbers of members who died or withdrew, net membership numbers actually shrank, the lawsuit says.
This creates a reserve issue and here is where the racketeering comes into play, and this part of the fraud leads all the way to New Haven, Connecticut where the HQ is located.
Knights HQ in New Haven
A directive came out, saying we are not to drop a member for any reason if he has attained the highest degree of rank…the only way to drop a member is if he has not paid dues for over 5 years! Think about that; 5 years plus of non-payment! (again, very reminiscent of CRA.)
The charity props its membership rolls by forcing 15,392 local Knights of Columbus councils to continue paying nominal dues for former phantom members after they drop out, the lawsuit says. The charity requires councils to recruit a new member before allowing them to drop an old one, the lawsuit says.
Based on such rules, one local council in New Jersey reports that it has 316 members when it actually has 54 members, the lawsuit says. When a Dallas council asked to remove more than 80 “long-delinquent” members from its rolls, KC Supreme only allowed eight to be removed, the lawsuit says.
I say the only way, because the other ways to drop someone are automatic…felony…no longer a Catholic…those things. The root issue is the younger members aren’t buying policies and have no intention to do so in the future, and since many members aren’t paying dues for themselves, they are being kept around to artificially inflate the membership rolls. This is where the racketeering scheme comes into play, as the KOC can lie to credit rating agencies about how solvent they are. KOC Insurance company can hide behind “…well we have 1.9 million members we can sell our products too…so we can be solvent if given an opportunity.”
While local councils do volunteer and charitable work, KC Supreme, generates billions of dollars tax-free every year selling life insurance, the lawsuit says. The Knights of Columbus’ KC Supreme website falsely advertises that its membership of “brother knights” grew for the 44th consecutive year and will soon top 2 million men, the lawsuit says.
“In fact, the true membership of the Knights of Columbus without these ‘phantom’ members is only about 1.4 million — their published number represents an approximate 36% overstatement!” the lawsuit says.
The insurance is pushed very hard by the organization. It’s mentioned at all 4 degrees (steps) you go through to full knighthood. You are required to meet with the agent after joining the knighthood, and insurance is pushed at every meeting. The agents are similar to your neighborhood AMWAY sales guy, essentially programmed to take a “No” as a “Yes”, and to keep pushing for the sale, it’s a turn off. These insurance reps are paid a slave wage and become commission only after about a year, and only get 4 councils to sell to, many having aging populations who won’t be eligible for the products. Turnover is high, and usually you buy a handful of policies on yourself to advance the scheme in the sense of putting food on your own plate. Isn’t this taking advantage of someone which runs contrary to the church’s values? Think that is odd, try the “retirement” of Chief Investment Officer Tom Smith, who stepped down just after the lawsuit was served…. let me guess impeccable and unrelated timing, right? Probably said he needed to spend more time with his family. I think Smith knows this Ponzi is about to hit the fan. Why else would he resign from a job paying him $900K a year?
Tom Smith
The fraternal order has $105 billion of insurance in force written against only $22 billion in assets, the lawsuit says. It says the Knights of Columbus organization “may very well be on the verge of financial collapse.”
I can say firsthand that the issues here are very real and true, heads are going to roll, and Pharisees and tax collectors described in the Bible will be shown in real modern form. I can say our council has 17 non-payers, and likely has at least that amount in next of kin whose dues are paid for by poppa.
A District Deputy (think regional manager) in Illinois has a council, that lists 300 members, but none have paid dues in years, and the council has not had a meeting in years. This narrative plays out everywhere leading me to believe the 1.9 million is closer to 1.1, making the “insurance pool” far less than advertised. A very heavy emphasis is put on recruiting, almost unhealthy emphasis, we just want a warm body capable of fogging a mirror, because they can buy a policy, thus buying time for the order.
My advice: Stay away from this group and if you have an insurance policy make sure the KOC belongs to the National Association of Insurance Commissioners, which in layman’s terms means if something were to happen and the insurance arm goes bankrupt, other companies step in to pay the claims/absorb the policies.
This is actually a very big deal, as many members have been misled about the insurance program and its long-term viability. The Chief Insurance Officer retiring, is likely more of a sign of a rat scurrying off the ship. Tom Smith is a coward of a human, yet no one is able to call him out. This story does not end well, and hopefully no one has any retirement monies invested in this scheme. Sit back and watch the dominoes fall boys and girls….and the Catholic Church wonders why it’s dying off.
