Should Tesla Start Advertising?
Tesla shareholders are scheduled to vote in July on whether or not the brand should start advertising product like every other automaker on the planet. It’s something the board and CEO Elon Musk have long resisted, and not without good reason. As a car brand, Tesla probably enjoys more free publicity than anyone else.
Musk has effectively mastered social media. He knows what buttons to press to earn more attention, and his one-man campaign has helped the company get where it is today more than the slickest ad copy could have hoped to.
Tesla also managed to spin this into a strength against would-be critics. Anytime someone laughs at the brand for not spending on traditional marketing, its acolytes point to the Musk talking point that cash is better used for development — a claim that holds some real weight, thanks to the brand having some of the most desirable electric vehicles on the market. But Tesla’s mystique won’t last forever, and it won’t be able to count on Elon Musk’s upper echelon Twitter game indefinitely.
Shareholders No Longer Riding Shotgun, Say American Automakers
This week, General Motors CEO Mary Barra and Ford CEO Jim Hackett were among 181 corporate executives claiming their companies need to do more than just deliver value to shareholders. If you just blacked out, we’ll reiterate — chief executives around the country are suggesting businesses need to do more than pad their share price.
We’re wondering why the sudden change of heart.
Amid Lawsuit, SEC Investigation, Musk Says Tesla's Private Funding Will Come From Saudi Arabia
Last week, Tesla CEO Elon Musk announced his intention to take the automaker private. But speculation quickly arose that the claim was just a clever ploy to drive up the company’s share price and burn short sellers, a group Musk seems to have a particular disdain for. This resulted in a shareholder complaint, filed Friday as a securities-fraud class action in federal court in San Francisco, alleging he lied to manipulate shareholder prices.
However, the Securities and Exchange Commission was already investigating the matter at the time of the lawsuit’s filing. While the bulk of the initial investigation involved asking Musk if he was lying, it’s presumably advanced in scope and complexity since then. The lynchpin to the whole issue is whether Tesla actually secured the billions in funding necessary to go private. Even though the CEO said the money is real, he did not specify who would provide it.
That changed on Monday morning, when Musk pointed to oil-rich Saudi Arabia. But it’s not as simple as it sounds.
Ghosn Desperately Wants All This Renault-Nissan Merger Talk to Stop
Renault-Nissan-Mitsubishi Alliance Chairman Carlos Ghosn is busy trying to convince shareholders of Nissan and Mitsubishi stock that Renault isn’t aiming to take over its Japanese partners. It’s proving to be no easy task.
While Ghosn has been clear of late that a merger isn’t in the works, he’s simultaneously adamant that the relationship between the companies must become “irreversible” before he retires from the industry in 2022.
Tesla Shareholders Will Vote on Replacing Elon Musk as Chairman of the Board
Earlier this year, Elon Musk agreed to stay on as Tesla’s CEO for another 10 years. But he may not remain as the chairman of its board. This week, the automaker announced some of the proposals to be voted upon at this year’s annual stockholder’s meeting. Among them was a bid to have Musk replaced by an independent director.
After previous complaints that board members were too closely tied to Elon, the company took on Johnson Publishing Company CEO Linda Johnson Rice and 21st Century Fox CEO James Murdoch. However, at least one shareholder is claiming that isn’t sufficient and drafted a proposal to have Musk replaced as chairman — saying that his involvement with SolarCity and SpaceX conflict with his commitment to Tesla Motors.
Geely Group Owner Enjoying His 103,619,340 Shares in Daimler
Unlike German auto titans BMW Group and Volkswagen Group, Mercedes-Benz parent company Daimler didn’t have the stabilizing effect of a family or individual with a massive, long-term cache of company shares. That’s no longer the case, as Geely Group owner Li Shufu has announced his purchase of a 9.69 percent stake in the German automaker.
This makes Shufu Daimler’s largest single shareholder.
The Chinese auto tycoon, whose Zheijang Geely Holding Group manages car-producing Geely Group, already owns Volvo Cars and Lotus, and is a major shareholder in truck builder Volvo AB. Always on the hunt for opportunities, the near 10-percent stake in Germany’s largest luxury automaker should give Shufu the partnership he’s looking for.
Tesla's New Strategy Includes 'Not Paying' Elon Musk and an Astronomical Share Price
Tesla Motors has announced that its CEO, Elon Musk, won’t be paid unless its already high stock valuation blasts into the stratosphere. The executive’s compensation is now tied to a dozen operational milestones. The first of these requires bringing the company’s current market cap to $100 billion, followed by 11 more set at $50 billion increments.
Agreeing to the program, Musk now has to stay with Tesla until 2028 as both its executive chair and product officer. While this does allow him to bring in another CEO sometime in the future, the company is likely hoping to dispel any speculation that he would abandon the position. It’s good to see Musk putting some serious skin into the game but, as a multi-billionaire, his not being paid unless Tesla’s stock valuation climbs isn’t the biggest threat to his financial security.
General Motors to Build Two Bolt-based Crossovers, Considers the Data-mining Business
General Motors CEO Mary Barra outlined the company’s vision of the future at the Barclays Global Automotive Conference in New York on Wednesday. While the majority of her speech adhered to GM’s current mantra of “zero crashes, zero emissions, and zero congestion,” we also got a taste of what that thinking might yield on a shorter timeline.
In early October, GM expressed its intention to launch 20 new electric vehicles by 2023. However, we didn’t get any specific details on the matter. That changed this week. Barra claims the manufacturer will introduce three new electric models by 2020, with two of them being crossovers. The trio will share share basic components with the Chevrolet Bolt.
Auto Investors Believe in Detroit's Electrified Future
Promoting a future for wide electrification appears to be the Achilles’ heel for bearish investors. Despite some bad publicity last week, Tesla Motors’ already sky-high share price resumed its relentless upward trend after a brief September slump. However, Tesla isn’t the only domestic company benefiting from electrification. Both General Motors and Ford have also seen marked improvements on Wall Street following tech-forward corporate announcements.
For General Motors, that meant the promise of widespread electrification. CEO Mary Barra pressed the issue by reaffirming GM’s three-tiered policy of, “Zero Crashes. Zero Emissions. Zero Congestion.” On a LinkedIn posting, Barra elaborated on the company’s vision where technology minimizes accidents via driver’s aids and autonomous hardware, nullifies emissions through alternative powertrains, and reduces congestion using inter-vehicle connectivity.
In addition to GM’s proposal to launch 20 new electric or fuel cell vehicles by 2023, the company has seen its share price jump twice in the same week. But Ford saw similar, although more modest, improvements in value following it’s own announcement of a tech-driven future.
Ford Likely to Eliminate 10 Percent of Global Workforce: Report
The Ford Motor Company is allegedly preparing for a sweeping reduction of its global workforce. Harder days for the auto industry have been a long time coming, but reports claim the impending layoffs are specifically related to shoring up finances and turning around the company’s lagging stock valuation — meaning Ford could be the canary in the coal mine or a lone company desperate to bolster its own profitability and get angry shareholders off its back.
While the automaker has not yet confirmed the cuts, there is every indication an announcement will be made soon. When confronted with the matter, representatives have been careful to make noncommittal statements and doubly cautious not to deny anything.
“We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities,” Ford said in an official statement. “Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation.”
Volkswagen's Annual Shareholders Meeting Was a Real Cage Match
Let’s hope the cutlery was plastic and the sandwiches didn’t come with toothpicks.
Amid an investigation into the emissions scandal that recently ensnared the company’s ex-CEO and current brand chief, Volkswagen shareholders big and small gathered today to calmly discuss the company’s actions and finances.
By all accounts, the calm didn’t last.
Volkswagen Fills Its Scandal Jar With $18.2 Billion, Warns of Financial Pain Ahead
The heavy financial cost of Volkswagen’s diesel emissions scandal is becoming clear.
After reaching a settlement yesterday with U.S. consumers and regulators, the automaker is more than doubling the size of its “make the problem go away” cash pile, Bloomberg is reporting.
Volkswagen set aside 16.2 billion euros ($18.6 billion) today to deal with the scandal’s fallout, up from the 6.7 billion euro ($7.6 billion) figure previously stated.
Qatar Wants Less Labor Influence at Volkswagen, Maybe
According to a report by Bild am Sonntag (via Reuters), Volkswagen’s third largest shareholder, the Qatar Investment Authority (QIA), wants trade unions to have less influence in what happens at the automaker amid Volkswagen’s ongoing emissions scandal.
QIA, which owns 17 percent of Volkswagen, is said to use a meeting scheduled today with automaker CEO Matthias Müller to “demand a scaling back of the role of the works council,” reported Reuters.
Volkswagen representatives denied the report, stating, “Co-determination (joint decision-making by corporate and labor representatives) and the (role of the) works council were not on the agenda of the talks.”
General Motors Shareholder Lawsuit Dismissed In Delaware
A group of General Motors shareholders found their lawsuit over the February 2014 recall dismissed in Delaware Monday due to lack of evidence.
Hammer Time: Are Shareholders Worth It?
Capitalism has no loyalties.
Everybody is replaceable.
Products. Employees. Employers. Services. Alliances. Joint Ventures. Financiers. Even the executives of multinational firms along with their board of directors are only as good as whatever quarterly numbers can be cooked up by their ‘independent’ auditing firm.
Capitalism is the ultimate “Let’s go!”, “Do it!” and “Screw you!” of economic systems. You name the angle or need in capitalism, and chances are that there is a market substitute that can immediately fill the gap. Even government regulations can be routinely challenged by trade organizations, international courts, and the all too common political handshake.
All this reality happens… on paper.