Musk, in defense of Tesla, channels his inner Trump
Elon Musk should be awarded an honorary degree from Trump University for his tendency to write off any negative story as a dishonest smear attempt regardless of the evidence.
Who can blame him, though. The strategy has certainly worked -- so far, at least -- for Donald Trump, who’s never missed an opportunity to dispute an indisputable fact.
Musk has been equally adept at shaking off bad publicity. Almost every time Tesla Motors reports another quarterly loss, its stock price actually goes up, to the irritation and total bewilderment of Detroit auto executives who watch their shares stagnate amid record earnings.
On Thursday, federal regulators at the National Highway Traffic Safety Administration revealed they are looking into potential suspension failures on the Model S. NHTSA also said it had warned Tesla about “troublesome” nondisclosure agreements that the automaker had gotten some customers to sign in exchange for free out-of-warranty repairs.
Early today, Musk and Tesla shot back in the only way they apparently know how -- with indignant denials and an attack on a writer they claim “fabricated” the story. It’s the same way they’ve responded in the past to negative reviews and frustrated customers.
Tesla said flatly: “There is no safety defect with the suspensions in either the Model S or Model X.” Well then. Case closed. Let’s move on to finding out when Musk will launch a rocket to Mars.
Except that NHTSA’s statement said it “is examining” -- present tense -- reports of suspension failure and “is seeking” -- again, present tense -- “information from vehicle owners and the company.”
I’ve never known a government bureaucracy to volunteer information about a matter it has confirmed to be nothing. I was surprised that NHTSA said anything at all about the issue. But I have seen more than a few cases where automakers insist their vehicles are safe, only to issue a recall later on. In 2005, General Motors nonchalantly dismissed suggestions that flimsy ignition switches and cars shutting off in the middle of traffic amounted to a safety hazard.
There may be, in fact, no defect, but it’s too soon to say there isn’t one, and Tesla forums contain numerous photos and reports of broken suspension arms.
Tesla called the idea that it would bar customers from reporting defects to NHTSA “preposterous.” Again, this runs counter to the available evidence, though it’s difficult to gather much evidence because nondisclosure agreements are, by definition, hard to get people to talk about.
True, the agreements didn’t specifically tell customers that they couldn’t report the problem to safety regulators, but they effectively bar them from doing just that by attaching a financial penalty to telling anyone at all. It’s possible that Tesla didn’t fully consider the implications of that blanket statement, but the alternative is that they did and meant every word of it.
Meanwhile, this afternoon a Tesla spokesperson confirmed to Automotive News that the company is planning to change the language of their goodwill agreement to make it explicit that consumers were not barred from reporting any issues to NHTSA.
Shades of GM
Again, there are shades of GM here, given that public discovery of the ignition-switch defect was delayed for more than a decade in part because its lawyers got victims’ families to sign confidential settlements.
Tesla’s retort concludes with an attack on a writer, Edward Niedermeyer, who it accuses of being a short-seller based on no evidence other than Musk’s apparent belief that anyone who directs negative attention toward Tesla must have something financial to gain from it. (Niedermeyer, who often writes opinion columns but reported the Tesla issues in a straightforward post citing several owners’ experiences and documentation, has denied owning or shorting shares in Tesla or any other automaker.)
In other words, Musk, who holds more than $6 billion worth of Tesla stock and gets $3 million richer every time the stock price goes up a dime, deflects questions of safety and quality by saying you shouldn’t believe anyone who’s not him because they’re obviously trying to make a few bucks.
Musk accuses Niedermeyer -- while repeatedly misspelling his name -- of trying “to set a world record for axe-grinding” in the same petulant fashion that Trump calls reporters who try to hold him accountable for his own dubious comments “sleaze” and worse.
Tesla is attempting to do an extremely difficult thing -- design, build and sell safe, desirable and profitable cars. A lot of entrepreneurs have tried to do just that and failed, and it’s not easy even for companies that have been around far longer than Tesla (see: Volkswagen diesel-emissions scandal, GM ignition-switch scandal, Takata airbag recalls and a litany of overstated fuel-efficiency ratings, just in the past few years).
Skepticism of its ability to succeed is warranted and healthy. If anything, with its stock worth more than $200 a share (it closed down 4.6 percent to $218.79 today) even as it keeps losing money and offers unrealistic production targets, Tesla has repeatedly been given the benefit of the doubt by plenty of investors and people in the media.
“We love you,” one of Musk’s loyal Twitter followers gushed today after Tesla posted its response to the reports of suspension problems.
This latest dust-up ultimately may be insignificant, or it could show a disturbing effort by Tesla to cover up a dangerous defect. But attacking anyone who raises legitimate questions is a bad strategy for the CEO of an automaker or anyone else to employ.
Except, it seems, when running for president.
David Undercoffler contributed to this report.
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