Tesla Motors in Trouble: Paradox of a Lifetime

The ironic times we live in cannot be understated. One wonders what our children will think of us in the coming decades. Case in point, Wall Street lobbies the government for looser regulations so they can compete with European banks. They say they need more efficient use of capital. They get their wish and together with European and other world banks, blow up the world financial systems. The irony? The same bankers who lobbied to get the loosened regulations are now heading up the government institutions which of course are managing the financial mess.

The latest crisis which went almost unnoticed is the domestic auto industry is in turmoil and the government is shelling out 25 billion to help the car companies. Why? Because auto industry management is atrocious in this country and there is an adversarial relationship with unions (who are also to blame for the plight of domestic car companies) which does not allow these companies to compete in a global economy. To be honest, I would be surprised if this money helps the car companies at all. In my opinion, 25 new CXOs would do more for these companies than these billions.

The irony? Detroit is getting religion and taxpayer money is to be used to develop green technology cars. And while the billions are being spent, VC backed Tesla Motors, the car company which developed an electric car that has the performance of a Ferrari and runs on batteries, is having financial difficulties due to the financial crisis.

Tesla in the good times — announcing 900 green jobs being brought to San Jose, CA

So why are taxpayers loaning Ford, GM and Chrysler billions to develop what Tesla has already successfully done with VC money? Wouldn’t it just be easier for GM, Ford and Chrysler to buy Tesla or have a technology sharing agreement? It is mind-numbing really. What is clear to me is that when the government gets involved it is generally reactionary and worse, hasty.

While I have never ever spent billions of dollars myself, I get th feeling that when you spend gargantuan sums and make spending decisions in days, you are bound to make major mistakes. What’s your take?

  • Peter
    October 19, 2008 at 3:25 pm

    Why are we using taxpayer money to bail out private business? Let it fail and have Economy 2.0 start.

  • Rich Tehrani
    October 19, 2008 at 5:56 pm

    That’s all well in good — but if we do this we need to let the banks fail too. All well and good but that of course would lead to Depression 2.0. Still, who knows if all this government intervention will work this time. It certainly helped Chrysler in the past.
    Of course the problem with all this is a government which is reactive and never ever proactive. Isn’t it time US citizens started to hold elected officials accountable and having those who are corrupt and putting special interests above the interests of citizens doing perp walks?

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