Lutz says SELL Tesla stock

the unions/benefits ran GM into the ground.... GM was walking dead long before the crash..... just like your local govt, social security and the like.

 

I agree. Add to that the protected status of car dealers -- effectively a cartel relying on the government to shut down Tesla stores because those threaten the existing lucrative dealership arrangements.

Tesla is swimming upstream in many ways, including the old school model of manufacturers and dealers. I applaud them for that as much as for producing an attractive electric sedan that outruns all but the newest Ferraris and Porsches.

 

I used the dinosaur cliche because they were: huge, very successful, and unable to rapidly adapt.

I believe I said SUVs were where the money was at, you could say because so much of their emphasis was on these vehicles this might have hastened their demise. Just like a dinosaur, if you use your natural advantages to specialize in obtain food (profits) through certain means, and suddenly that method is not available, it usually means trouble ahead.

To further the analogy, even with the big changes in carbuying mentality and the recession, GM & Chrysler may have been able to weather it if those dinosaurs hadn't been riddled with parasites slowly stealing their reserves. For sake of argument call these bloodsuckers the UAW...

 

100%



understand Bob himself would occasionally say: "often wrong.......never in doubt"...

 

when you cannot adapt by force of law - you eventually die........

 

I agree with that. My comment was more a reaction to a pattern out there of automatically blaming Wall Street for anything that's gone wrong over the last 20yrs. Sorry this sidetracked your thread.

Back to Tesla. Tesla may fail. Even if it fails I think it's still great (as long as you aren't a shareholder) that they are doing what they are doing, that they are pushing the existing technology and forcing us to consider alternatives. That's how good things happen - you have an idea, a bunch of people believe in it (backing up that belief with $$) and you really go for it . Chances are that you fail and your investors go down with you. If you succeed, though, you may change the way we live. I think it's awesome that America is still the best place for this kind of thing.

 

Ok, thanks for your clarification. I am a former IB'er, and I would disagree with your statements that Wall Street "caused" the recession and GM (or other automotives) to fail.

To say it's complicated is clearly an understatement, and Wall Street certainly made a contribution in ways. So, while I can't say that Wall Street had nothing to do with it and has clean hands, I do not agree that it was the root cause.

And, importantly, the management teams of these corporations also had the final say on their decisions and bear the responsibility for making them (good and bad). They are answerable to the Boards who are answerable to the shareholders.

Regardless, and not to get into a debate about who caused this or that, I would agree with your statement that there are lots of "idiots" in the corporate world. Companies like GM got themselves into bad positions on their own. The economy proved Warren Buffett's point that, "You don't know who's swimming naked until the tide goes out." A good economy hides a lot of bad business practices.

As it relates to Tesla, though, the automotives have been looking at (and offering) hybrid and electric vehicles (the EV1, for example) for an awfully long time. They have spent billions in research. Tesla thinks they know better (or more)? Possibly, and a fresh look and hubris can play a role in getting to success faster, but in the end, if these vehicles from GM, Ford, Toyota, Honda or whomever made sense, economically, to customers, they would have been big hits. So far, cars like the Leaf and Volt seem to be a bit of a bust.

Clearly, they've gained in market share, but there are factors that heretofore have been able to be adequately resolved such that the total cost of ownership makes sense (depletion of batteries, for example). And, cheap pump prices makes it hard to justify going to an alternative. IIRC, I read that at $5 pump prices, the hybrids look much more attractive.

Furthermore, a company like Tesla is highly dependent on federally-subsidized tax credits for purchasers. That's fine, but it creates an economic distortion and allows a company to exist and grow that might not otherwise make it. So be it. We've decided to do that. For now, anyway. But, in the long run, either the Tesla is a viable product and company or it isn't.

A mid-priced model will go a long way, maybe, to growing market share. Or, at least, giving Tesla a shot at growing market share. So far, as pointed out by someone else, these have really just been six-figure "toys" of the wealthy and have certainly not reached mass market appeal.

CW

 

You did make the point on SUV profitability. I can't speak to the rest because I don't know enough about the specifics. (Reading a book or two by Lutz isn't enough . . .)

 

when GM started making money on financing and losing money on production - that was a clue.......

 

This is the same man who pushed the Chevy Volt at GM, arguably one of the biggest disappointments from hype in modern car history.

I'm thinking there might be a credibility gap here.


That being said: The real money for car makers is in pick up trucks. I saw a Toyota Pick up Truck in Central London last week. The world is coming to an end.

 

2015 Shareholder Meeting | Tesla Motors

 

I definitely find it difficult to bet against Musk, as he's made some good moves by tying in Solar City to home power stations to Tesla. In addition, Tesla has done a top job parlaying the California electric car fees to feed their bottom line (which i think is either going away soon, or already has). As the competition heats up in this space, and more manufacturers focus on "alternative-power" cars, it will be Tesla's challenge to stay ahead of the curve.

If Tesla is going to follow the typical expectation of an "all-new" model model every 5 years, that means they'll need to have a redesigned S in the pipe and ready for production in 2018, which I would think might stretch their current available resources.

As far as Lutz's street cred goes: Sometimes (not always), people who have failed are worth listening to, because they know from inside experience what definitely does not work, in an "Edge of Tomorrow" kind of way. That said, I'm not in a position to judge him, as I don't really follow his carreer that closely.

 

Your thoughts are valued given your position. Personally, as someone in product management and marketing (not automotive), Lutz is like an idol to me. Everyone has failures, but unless his legacy is completely falsified, what is it about him people find problematic? Wasn't Wagoner to "blame" for any GM failings?

That being said, I wouldn't go to him for stock advice. I do agree, however, that the road of an independent in this industry is an incredible mountain to overcome. Loads of companies have tried and failed.

It is amazing what Tesla has done to this point, can it be sustained? Time will tell. I never thought Victory Motorcycles would make it either, although that's motorcycles and had the backing of Polaris, still impressive.

 

anybody that had a hand in the creation of the Dodge Viper will go down as an automotive legend. look what followed, unbridled horsepower.
wrt tesla, much of its success is based on global warming hysteria. look at the geographical areas of its consumption....silicon valley and the northeast et al. young wealthy buyers with a glove box full of self congratulatory post it notes.

 

Maybe, but those college types seem to be on to something:

Tesla P85D 0 to 60 MPH Time Dropping To 2.8 Seconds With Firmware Update? - Gas 2

Put that kind of performance into a Ferrari or Porsche production model and we'd probably get the style and handling to match. If it helps the environment as well, great. But 0-60 under 3 seconds in a car the needs essentially no maintenance and costs half of a new 991 Turbo...

 

We can say whatever we like, but I would never categorize him as a 'failure'.
He's one of those larger than life personalities that you just can't ignore.
Worked directly for him for 8 yrs. Never a dull moment.
Former Marine fighter pilot, worked for Ford, BMW, Chrysler, Exide Battery, GM, now involved with several ventures.
As I jokingly mentioned previously, he would often say about himself, often wrong, never in doubt. Truer words were never spoken.
He always had an answer and an opinion.
Probably right more than he was wrong, but he is passionate and opinionated to a fault.
If it weren't for him the CTS Coupe & Wagon never would have happened.
Were they successful.........probably not in a commercial sense.
But he is a very shrewd business man and he usually had a sense of what was right and what was wrong.
Was he perfect? Of course not.

And let's not blame Rick Wagoner for all the bad things that happened. Did he make some serious errors? Absolutely. But there were so many factors that led to the ultimate failure as a corporation. Yes he was part of the decision making process. So certainly it was ultimately his responsibility.
I personally paid a very heavy price for all the wrong decisions that were ultimately made.
But you don't get involved in the Auto biz if you can't stand up to the pressure.
The Auto biz eats it's young and spits them out.
Egos are probably like the Entertainment biz. The good guys & gals are passionate creative people that love cars.
But there are always the 'other' types that are self serving to offset the car junkies.
Not defending anyone, just trying to convey the facts.
The Military, Higher Education and the Government are no different.
People trying to do the 'right thing'...........in spite of themselves

 

bob lutz a failure....... LOL

what a world of backseat drivers....

 

Too bad those college types have never had a class in Environmental Science. Tesla at best has a slightly smaller footprint than a typical IC auto. The electricity generated in the coal or gas-powered power plant certainly isn't carbon free. The non-recycling of the Li-Ion battery pack means it has to be disposed of as well. In theory almost everything in an IC vehicle can be recycled.

It would be interesting to see a complete breakdown of the amount of energy required to manufacture a Tesla, from digging the material ore out of the ground to plugging it into your home. Comparing that with the same level of detail to a small conventional car. Then drive both say, 30,000 miles and calculate that energy as well. The results might surprise people.

Without the hype and status, an IC-engined Model S is a $60k car on a good day. But they are roughly double that. Imagine if all the "environmentally conscious" people that buy these things instead got a diesel BMW or Mercedes sedan and used the remainder of the money to buy an acre of depleted farmland where local hardwood trees were then planted on their behalf. The cumulative amount of carbon trapped in "their" forest would far outweigh their fuel usage and more or less do so for their lifetime.

 

True, but hook those power plants up to non-fossil fuels and the whole equation changes. Smarter macro approach.

A fleet of IC engines ... no choice. Fossil fuel or nothing.

But ultimately I think most us will go electric eventually because IC cars are too slow.

 

Bob Lutz at it again: https://www.cnbc.com/2017/11/17/tesla-is-going-out-of-business-says-former-gm-exec-bob-lutz.html He thinks Tesla won't last another year!

His argument about the tech being the same old stuff is not strong. Apple makes phones that use tech the competition had introduced years earlier, but they succeed in charging a premium as they design and market their products as premium devices. As long as Tesla can do that, they'll be fine.

FWIW I don't like Apple or Tesla products due to price and them not having the latest tech, but I do commend them on their ability to use that non-revolutionary tech and sell it at a premium over the competition.

Bob needs to focus on his rental car manufacturing companies of GM and Chrysler to make sure they don't need a bailout again and stop worrying about Tesla.