Category: Musk, Elon

Musk Jabs the SEC as “the Shortseller Enrichment Commission”

(p. B1) Elon Musk risked reigniting a battle with federal securities regulators on Thursday when he appeared to openly mock the Securities and Exchange Commission only days after the Tesla Inc. chief executive settled fraud charges with the agency.
Seemingly without prompt, Mr. Musk sent a tweet in the early afternoon that suggested the SEC was enriching investors betting against the electric-car maker. “Just want to [say] that the Shortseller Enrichment Commission is doing incredible work,” Mr. Musk tweeted. “And the name change is so on point!”

For the full story, see:
Tim Higgins and Gabriel T. Rubin. “Tweet by Elon Musk Takes Jab at the SEC.” The Wall Street Journal (Saturday, October 5, 2018): B1 & B4.
(Note: the online version of the story has the date Oct. 4, 2018, and has the title “Elon Musk Tweet Mocks the Securities and Exchange Commission.”)

“Tesla Is His Baby”

(p. B5) “Tesla is his baby,” said Deepak Ahuja, Tesla’s chief financial officer. “He takes it extremely personally.”
. . .
In preparing the assembly lines, Mr. Musk became convinced that the process should be close to fully automated, using robots rather than humans whenever possible. Doing so, he believed, could make cars move through the factory at one meter per second, 10 to 20 times the speed of existing lines.
So Tesla built a factory with hundreds of robots, many programmed to perform tasks that humans could easily do. One robot, which Mr. Musk nicknamed the “flufferbot,” was designed to simply place a sound-dampening piece of fiberglass atop the battery pack.
But the flufferbot never really worked. It would fail to pick up the fiberglass, or put it in the wrong place, frequently delaying production. It was eventually replaced by factory workers.
Mr. Musk has accepted responsibility for some of these missteps, occasionally with humor. In late June, he wore a T-shirt depicting a robot that passes butter. It was an inside joke, lampooning the notion of technology for technology’s sake.
After the debacle, Mr. Musk tweeted: “Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”
. . .
“He is absolutely working incredibly hard, but Elon has always worked incredibly hard,” said Mr. Ahuja, Tesla’s chief financial officer. “He’s very tough, too. He can eat glass.”
. . .
“I know that it has been a difficult year for him,” said Gwynne Shotwell, the SpaceX president and chief operating officer. “Not because he’s frowning or throwing things, but because I can tell he’s physically exhausted.”

For the full story, see:
David Gelles. “In Elon Musk’s World, Brakes Are for Cars, Not C.E.O.s.” The New York Times (Wednesday, Aug. 29, 2018): B1 & B5.
(Note: ellipses added.)
(Note: the online version of the story has the date Aug. 28, 2018, and has the title “MARSEILLE DISPATCH; Yes, There Is a French McDonald’s That Is Beloved (by Its Staff).”)

“I’d Rather Be Optimistic and Wrong than Pessimistic and Right”

(p. A17) There is no question that Tesla’s culture is different from that of conventional automakers or even other Silicon Valley companies — . . . . That is largely by Mr. Musk’s design, and certainly reflects his outsize presence. His web appearance late Thursday [Sept. 6, 2018] was the latest evidence.
He was the guest of the comedian Joe Rogan, an advocate for legalizing marijuana, and the repartee included an exchange over what Mr. Musk was smoking.
“Is that a joint, or is it a cigar?” Mr. Musk asked after his host took out a large joint and lit it up.
“It’s marijuana inside of tobacco,” Mr. Rogan replied, and he asked if Mr. Musk had ever had it.
“Yeah, I think I tried one once,” he replied, laughing.
The comedian then asked if smoking on air would cause issues with stockholders, to which Mr. Musk responded, “It’s legal, right?” He then proceeded to take a puff. Marijuana is legal for medical and recreational use in California, where the interview was recorded.
After Mr. Musk announced on Aug. 7 that he intended to take Tesla private at $420 a share, there was speculation that the figure was chosen because “420” is a code for marijuana in the drug subculture.
In an interview with The New York Times while the gambit was still in play, Mr. Musk didn’t deny a connection. But he did try to clarify his state of mind in hatching the plan — and the shortcomings of mind-altering.
“It seemed like better karma at $420 than at $419,” he said. “But I was not on weed, to be clear. Weed is not helpful for productivity. There’s a reason for the word ‘stoned.’ You just sit there like a stone on weed.”
. . .
If he is feeling any insecurity, it was not reflected in his webcast with Mr. Rogan. He appeared at ease, sipping whiskey, and spoke, at one point, about artificial intelligence and how it could not be controlled.
“You kind of have to be optimistic about the future,” Mr. Musk said. “There’s no point in being pessimistic. I’d rather be optimistic and wrong than pessimistic and right.”

For the full story, see:
Neal E. Boudette. “‘Tesla Stock Dips As Musk Puffs On … What?” The New York Times (Saturday, Sept. 8, 2018): A1 & A17.
(Note: ellipses in quotes, and bracketed date, added; ellipsis in title, in original.)
(Note: the online version of the story has the date Sept. 7, 2018, and has the title “‘Tesla Shaken by a Departure and What Elon Musk Was Smoking.”)

Zuckerberg Calls Musk “Pretty Irresponsible” on A.I. “Doomsday” Fears

(p. 1) SAN FRANCISCO — Mark Zuckerberg thought his fellow Silicon Valley billionaire Elon Musk was behaving like an alarmist.
Mr. Musk, the entrepreneur behind SpaceX and the electric-car maker Tesla, had taken it upon himself to warn the world that artificial intelligence was “potentially more dangerous than nukes” in television interviews and on social media.
So, on Nov. 19, 2014, Mr. Zuckerberg, Facebook’s chief executive, invited Mr. Musk to dinner at his home in Palo Alto, Calif. Two top researchers from Facebook’s new artificial intelligence lab and two other Facebook executives joined them.
As they ate, the Facebook contingent tried to convince Mr. Musk that he was wrong. But he wasn’t budging. “I genuinely believe this is dangerous,” Mr. Musk told the table, according to one of the dinner’s attendees, Yann LeCun, the researcher who led Facebook’s A.I. lab.
Mr. Musk’s fears of A.I., distilled to their essence, were simple: If we create machines that are smarter than humans, they could turn against us. (See: “The Terminator,” “The Matrix,” and “2001: A Space Odyssey.”) Let’s for once, he was saying to the rest of the tech industry, consider the unintended consequences of what we are creating before we unleash it on the world.
. . .
(p. 6) Since their dinner three years ago, the debate between Mr. Zuckerberg and Mr. Musk has turned sour. Last summer, in a live Facebook video streamed from his backyard as he and his wife barbecued, Mr. Zuckerberg called Mr. Musk’s views on A.I. “pretty irresponsible.”
Panicking about A.I. now, so early in its development, could threaten the many benefits that come from things like self-driving cars and A.I. health care, he said.
“With A.I. especially, I’m really optimistic,” Mr. Zuckerberg said. “People who are naysayers and kind of try to drum up these doomsday scenarios — I just, I don’t understand it.”

For the full story, see:
Cade Metz. “Moguls and Killer Robots.” The New York Times, SundayBusiness Section (Sunday, June 10, 2018): 1 & 6.
(Note: ellipsis added.)
(Note: the online version of the story has the date June 9, 2018, and has the title “Mark Zuckerberg, Elon Musk and the Feud Over Killer Robots.”)

Regulations Support Car Incumbents and Undermine Tesla Profitability

(p. A13) . . . governments everywhere have decided, perversely, that electric cars will not be profitable. In every major market–the U.S., Europe, China–the same political dispensation now applies: Established auto makers effectively will be required to make and sell electric cars at a loss in order to continue profiting from gas-powered vehicles.
This has rapidly become the institutional structure of the electric-car industry world-wide, for the benefit of the incumbents, whether GM in the U.S. or Daimler in Germany. Let’s face it, the political class always had a bigger investment in these incumbents than it ever did in Tesla.
Tesla has a great brand, great technology and great vehicles. To survive, it also needs to mate itself to a nonelectric pickup truck business. . . .
We’ll save for another day the relating of this phenomenon to Mr. Musk’s recently erratic behavior and pronouncements. . . . Keep your eye on the bigger picture–the bigger picture is the global regulatory capture of the electric car moment by the status quo. And note the irony that Tesla’s home state of California was the original pioneer of this insiders’ regulatory bargain with its so-called zero-emissions-vehicle mandate.
Electric cars were going to remain a niche in any case, but public policy is quickly ruling out the possibility (which Tesla needed) of them at least being a profitable niche.

For the full commentary, see:
Holman W. Jenkins, Jr. “BUSINESS WORLD; A Tesla Crackup Foretold; The real problem is that governments everywhere have ordained that electric cars will be sold at a loss.” The Wall Street Journal (Saturday, June 23, 2018): A13.
(Note: ellipses added.)
(Note: the online version of the commentary has the date June 22, 2018.)

In a Robustly Redundant Labor Market Most “Will Find New Jobs Quickly”

(p. A1) Tesla Inc. on Tuesday [June 12, 2018] said it will cut about 9% of its workforce in an effort to deliver its first profit during a make-or-break period of building a mass-market electric car.
The layoffs of about 3,500 employees come as Chief Executive Elon Musk reorganizes Tesla’s management structure to make it flatter, and as the company tries to ramp up production of the all-electric Model 3 compact sedan.
In a memo to employees, Mr. Musk said the job cuts are mostly aimed at salaried staff and won’t affect production workers assembling the company’s vehicles. “This will not affect our ability to reach Model 3 production targets in the coming months,” he wrote.
. . .
(p. A8) “What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable,” Mr. Musk wrote in the email to employees Tuesday. “That is a valid and fair criticism of Tesla’s history to date.”
. . .
On Twitter, Mr. Musk acknowledged that he was losing good people. “I think they will find new jobs quickly,” he said.

For the full story, see:
Higgins, Tim. “Tesla to Cut Workforce by 9%, In Bid for Sustainable Profit.” The Wall Street Journal (Wednesday, June 13, 2018): A1 & A8.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date June 12, 2018, and has the title “Tesla Cutting About 9% of Global Workforce.”)

“NASA as a Bloated and Unimaginative Bureaucracy”

(p. 10) “The Space Barons,” by Christian Davenport, a Washington Post reporter, is an exciting narrative filled with colorful reporting and sharp insights. The book sparkles because of Davenport’s access to the main players and his talent for crisp storytelling.
. . .
One of the first private pioneers was Burt Rutan, a mutton-chopped aircraft designer who regarded NASA as a bloated and unimaginative bureaucracy and in 1982 founded a company called Scaled Composites that designed aircraft so innovative that, as Davenport writes, “it was as if his inspiration came not just from the laws of aerodynamics but from Picasso.” One of his ideas was for a manned aircraft that could reach the edge of space and then fold its wings upward to act as a feather allowing the craft to re-enter the earth’s atmosphere, land on a runway, and be reused. It would become his entry in the Ansari X Prize, which offered $10 million for the first private company that could launch a reusable vehicle to space twice within two weeks.
Rutan attracted two billionaire partners. The first was the Microsoft co-founder Paul Allen, who as a schoolboy in Seattle yearned to become an astronaut but, being nearsighted, realized that was impossible so spent his time coding in the school’s computer room with his friend Bill Gates. Rutan’s second partner was the toothy goldilocked Richard Branson, a thrill-addicted serial adventurer and entrepreneur who was as enthusiastic about publicity as Allen was averse to it. Branson’s personal motto for his company, Virgin, was “Screw it, let’s do it,” which was no longer a guiding principle at NASA, and he created Virgin Galactic with the goal of taking tourists into space. “Paul, isn’t this better than the best sex you ever had?” Branson asked Allen during one test flight as the spaceship climbed higher.
In 2004, Rutan’s craft (with a Virgin logo on its tail) flew twice to space and back to win the X Prize. At the celebration, Rutan took a shot at NASA. “I was thinking a little bit about that other space agency, the big guys,” he said. “I think they’re looking at each other now and saying, ‘We’re screwed.'”
. . .
At the end of 2015, within a month of each other, Musk and Bezos both launched rockets that returned safely to earth and were reusable. For the moment, Musk the hare had darted ahead: His powerful Falcon 9 rocket had lifted a payload into orbit, whereas Bezos’ smaller New Shepard craft had merely gone up into the edge of space and returned. But as happens with scrappy entrepreneurial business competitors, in contrast to government bureaucracies, Bezos and Musk were goading each other on. And unlike the race between the tortoise and the hare, they can both triumph — as can, one hopes, Richard Branson and others.

For the full review, see:
Walter Isaacson. “The Right Stuff.” The New York Times Book Review (Sunday, April 29, 2018): 10.
(Note: ellipses added.)
(Note: the online version of the review has the date April 24, 2018, and has the title “In This Space Race, Jeff Bezos and Elon Musk Are Competing to Take You There.”)

The book under review, is:
Davenport, Christian. The Space Barons: Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos. New York: PublicAffairs, 2018.

Robots Free Humans for More and Better Jobs

(p. A8) For companies, choosing the appropriate tasks to automate is important. Auto maker BMW AG automated some of the physical labor at the Spartanburg plant in South Carolina while retaining tasks involving judgment and quality control for workers.
Robots fit black, soundproofing rubber tubes to the inner rim of car doors, a task once done entirely by hand, on the more than 5,000 or so car doors that pass through the production line each day. Human workers do final checks on the tube’s placement. The division of labor speeds up the process.
Since BMW introduced this and other automated processes over the past decade, it has more than doubled its annual car production at Spartanburg to more than 400,000. The workforce has risen from 4,200 workers to 10,000, and they handle vastly more complex autos–cars that once had 3,000 parts now have 15,000.
Being spared strenuous activities gives workers the time and energy to tackle more demanding and creative tasks, BMW said in a statement.
James Bessen, an economist who teaches at Boston University School of Law, said automation like that at the Spartanburg plant has enabled a huge increase in the quality and variety of products, which help spur consumer demand. BMW’s share of luxury-car sales in the U.S. has risen sharply, with over 300,000 cars sold last year compared with just over 120,000 in 1997, company figures show.
Tesla Inc., by contrast, has struggled with production of the Model 3 car at its Fremont, Calif., plant after its use of robots got out of balance. Undetected errors in parts built by robots caused bottlenecks in production, meaning it could build only 2,020 cars a week compared with the 5,000 it originally promised, according to the company.
Analysts at investment research firm Bernstein said Tesla automated welding, paint and body work processes, as other manufacturers have done, but also automated final assembly work, in which parts, seats and the engine are installed in the car’s painted shell. Errors in this work caused production bottlenecks. “Automation in final assembly doesn’t work,” said analyst Max Warburton.
“Yes, excessive automation at Tesla was a mistake…Humans are underrated,” wrote Tesla CEO Elon Musk in a tweet last month.
. . .
At an aggregate level, however, the jobs created by automation outnumber those that are being destroyed, according to analysis by the Massachusetts Institute of Technology’s David Autor and Utrecht University’s Anna Salomons.

For the full story, see:
William Wilkes. “Big Companies Fine-Tune The Robot Revolution.” The Wall Street Journal (Tuesday, May 15, 2018): A1 & A8.
(Note: ellipsis between paragraphs, added; ellipsis internal to paragraph, in original.)
(Note: the online version of the story has the date May 14, 2018, and has the title “How the World’s Biggest Companies Are Fine-Tuning the Robot Revolution.”)

More of James Bessen’s views on these issues, can be found in his discussion of ATMs in:
Bessen, James. Learning by Doing: The Real Connection between Innovation, Wages, and Wealth. New Haven, CT: Yale University Press, 2015.

The analysis by Autor and Salomons, mentioned above, appears in:
Autor, David, and Anna Salomons. “Is Automation Labor-Displacing? Productivity Growth, Employment, and the Labor Share.” In Brookings Papers on Economic Activity, Feb. 27, 2018.

Spreadsheets Created More and Better Jobs Than They Destroyed

BookkeepingVersusAnalystJobsGraph2018-05-19.jpgSource of graph: online version of the WSJ article quoted and cited below.

(p. A2) Whether truck drivers or marketing executives, all workers consider intelligence intrinsic to how they do their jobs. No wonder the rise of “artificial intelligence” is uniquely terrifying. From Stephen Hawking to Elon Musk, we are told almost daily our jobs will soon be done more cheaply by AI.
. . .
Until the 1980s, manipulating large quantities of data–for example, calculating how higher interest rates changed a company’s future profits–was time-consuming and error-prone. Then along came personal computers and spreadsheet programs VisiCalc in 1979, Lotus 1-2-3 in 1983 and Microsoft Excel a few years later. Suddenly, you could change one number–say, this year’s rent–and instantly recalculate costs, revenues and profits years into the future. This simplified routine bookkeeping while making many tasks possible, such as modeling alternate scenarios.
. . .
The new technology pummeled demand for bookkeepers: their ranks have shrunk 44% from two million in 1985, according to the Bureau of Labor Statistics. Yet people who could run numbers on the new software became hot commodities. Since 1985, the ranks of accountants and auditors have grown 41%, to 1.8 million, while financial managers and management analysts, which the BLS didn’t even track before 1983, have nearly quadrupled to 2.1 million.

For the full commentary, see:
Greg Ip. “CAPITAL ACCOUNT; We Survived Spreadsheets; We’ll Survive AI.” The Wall Street Journal (Thursday, August 3, 2017): A2.
(Note: ellipses added.)
(Note: the online version of the commentary was updated Aug. 2, 2017, and has the title “CAPITAL ACCOUNT; We Survived Spreadsheets, and We’ll Survive AI.”)

Art Diamond Predicts a 40% Chance that Elon Musk Will Make It to Mars

(p. A1) What are the chances that readers will make it to the end of this article? About 40%.
If you do make it, that prediction will look smart. If you don’t, well, we said the odds were against it.
Such is the nature of the 40% rule, a favorite forecasting tactic of Wall Street analysts and other prognosticators trying to make a bold call without being too bold.
Former British Prime Minister Tony Blair said last month there’s a 40% chance that Brexit will be reversed; Citigroup Inc. analyst Jim Suva wrote that there’s a 40% chance Apple Inc. buys Netflix Inc.; and Nomura Holdings Inc. economist Lewis Alexander said there’s a 40% chance Nafta gets ripped up.
The nice thing about 40% is that you never have to say you were wrong, says Peter Tchir, a market strategist at Academy Securities. Say you predict the Dow Jones Industrial Average has a 40% chance of hitting 30000 before year-end.
“Get it right and you can say ‘See, I was telling everyone it could happen,’ ” he says. “Get it wrong and you can weasel your way out: ‘I didn’t say it was likely, I just said it was a strong possibility.’ “

For the full story, see:
Winkler, Rolfe and Justin Lahart, “How Pundits Never Get It Wrong: Call a 40% Chance.” The Wall Street Journal (Tuesday, Feb. 27, 2018): A1 & A10.
(Note: the online version of the article has the date Feb. 26, 2018, and has the title “How Do Pundits Never Get It Wrong? Call a 40% Chance.”)

Musk’s Slow Hunch May Be Undone by Smaller Satellites

(p. B3) SpaceX ‘s long-delayed Falcon Heavy rocket, slated for its maiden flight on Tuesday [February 6, 2018], faces uncertain commercial prospects and lacks a clear role in efforts to send U.S. astronauts back to the moon or deeper into the solar system.
The company conceived the rocket at the beginning of the decade, when SpaceX was an underdog fighting to increase its share of launches and needed a beefed-up alternative to a fleet of underpowered boosters. But after spending some $1 billion and grappling with five years of delays and huge technical challenges related to reliably harnessing power from 27 engines, the company is contending with significantly eroded commercial demand for such a potent heavy-lift booster.
The primary reason for the weakened demand is that both national security and corporate satellites continue to get smaller and lighter. So now, even if it performs as advertised, the Falcon Heavy might be Elon Musk’s biggest contrarian bet since he founded SpaceX over 15 years ago.

For the full story, see:
Andy Pasztor. “SpaceX Launch to Test Contrarian Bet.” The Wall Street Journal (Monday, Feb. 5, 2018): B3.
(Note: bracketed date added.)
(Note: the online version of the story has a date of Feb. 4, 2018, and has the title “New Falcon Heavy Rocket Represents a Major Bet for SpaceX.”)