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Comment by twblalock | Hacker News Reader

I have no problem believing that a disgruntled employee sabotaged part of the production line. But I do have a problem believing that all of the problems since the Model 3 started production were caused by sabotage.

I also have no problem believing that the disgruntled employee simply wanted to take revenge by sabotaging his/her employer -- that's not uncommon, and it should not be difficult to prove if it really happened. Musk is going a bit too far in suggesting that other forces are involved unless he has credible evidence, and he should share it if he has it.

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> But I do have a problem believing that all of the problems since the Model 3 started production were caused by sabotage.

On reading your comment I re-read the letter to confirm that he doesn't imply this anywhere.

Sure, but he seems very eager to steer the thing towards external interests and sabotage rather than this being an isolated incident. Sounds to me that he is fishing for scapegoats in general...

I read it as a general motivational tactic. Everyone else is out to get us. We need to pull together. They want us to fail, let's prove them wrong. From coaches or CEOs. This is essentially newspaper clippings in the locker room.

Yeah it's quite different to the leaked email Tim Cook has sent to his employees.

Yeah I find it too coincidental. There was a news article if I'm not mistaken about how Tesla put in a lot of work into trying to automate making cars that failed. A lot of big car manufacturers commented how they tried the same and he didn't learn from their mistakes.

https://arstechnica.com/cars/2018/04/experts-say-tesla-has-r...

This might be the language put there among other things to encourage employees to be vigilant (us vs evil them is an effective way to motivate people).

> I do have a problem believing that all of the problems since the Model 3 started production were caused by sabotage.

As do I. I don't think anyone's claiming otherwise. Model 3 certainly has had more than one issue.

> I have no problem believing that a disgruntled employee sabotaged part of the production line. But I do have a problem believing that all of the problems since the Model 3 started production were caused by sabotage.

No such claim was made. So your entire post begs of fear mongering.

You have no problem believing a sabateur who exported data to an unknown third party when he says he acted alone out of spite? All that was said in an internal email is that it's possible that other forces were at play and it's something they're investigating.

> But I do have a problem believing that all of the problems since the Model 3 started production were caused by sabotage.

So, uh, where exactly is that said? In the email, or anywhere for that matter? On my monitor, the email doesn't claim any influence on Model 3 production problems, much less "all".

> suggesting that other forces are involved

"Investigation" and "be extremely vigilant" are a mite different from "suggesting".

You might want to consider talking about what is actually written.

> You might want to consider talking about what is actually written.

You might want to consider that the author knows full well that the implication is what really matters, and that people who only think about the literal written words are missing the point.

There is also the case that filling too much between the lines is in danger of driving its own narrative.

Did you see this paragraph in Musk's email? It is pretty suggestive:

> As you know, there are a long list of organizations that want Tesla to die. These include Wall Street short-sellers, who have already lost billions of dollars and stand to lose a lot more. Then there are the oil & gas companies, the wealthiest industry in the world — they don't love the idea of Tesla advancing the progress of solar power & electric cars. Don't want to blow your mind, but rumor has it that those companies are sometimes not super nice. Then there are the multitude of big gas/diesel car company competitors. If they're willing to cheat so much about emissions, maybe they're willing to cheat in other ways?

"Musk is going a bit too far in suggesting that other forces are involved unless he has credible evidence,"

It's not a bit too far since oil&gas companies and car companies have an established history of doing very evil things.

> It's not a bit too far since oil&gas companies and car companies have an established history of doing very evil things.

That does not mean they have done every specific evil thing they are accused of, such as sabotaging Tesla's factory.

Protecting a company against sabotage is a CEO's job and competitors enticing/inducing employees into acts of sabotage is a plausible threat, in this light an internal leaked memo is not a public accusation and so reasonable.

They haven’t been accused in this case, so let’s not get ahead of ourselves.

Maybe not accused directly but Musk's email seems to heavily imply it.

Hardly. Stating that something is a possibility that is worth looking into is not anything close to implying that that thing is necessarily the case. This is basic critical thinking 101.

Oil and gas companies have a far easier, and legal way to destroy Tesla: they could simply buy up its outstanding debt and call it in. That would immediately bankrupt Tesla.

As it so happens, a number of the oil and gas companies have recognized that oil and gas are the past, and have transitioned to calling themselves "energy" companies and are spending billions on alternative energy industries.

> they could simply buy up its outstanding debt and call it in

They could try to buy it up, and they might succeed, but they can't call in the debt willy-nilly before it matures.

Also even if they did...Tesla can issue new debt to fund it - which would be more valuable to the debt holders because the'd now know there's a good chance they can sell it on.

The market can remain irrational a lot longer then you can remain solvent - and no one company is big enough to ignore this.

They could try to issue new debt. But who would want to acquire debt in a company that is about to be forced into bankruptcy by its creditors?

The second round of debt would be subordinated to the original round of debt, meaning that new debtholders would make back pennies on the dollar, if that.

Why? Nothing about the valuation has changed in this scenario - the valuation has in fact gone up because a large player has moved into the market and is (1) buying up all the debt instruments (so their value is going up and up and up) and (2) if you're an original investor, you still believe you'll make your money back on Tesla, so all you do is sell your holdings to Big Oil, and then offer the exact same terms again to Tesla to payback the original instrument. And it means you've already made your original money back, so you've got the cash to spare to do it.

Have participated in corporate debt structuring before.

Standard terms allow for debtholders to call in a debt before it matures if they have reason to believe the debtor will be unable to pay back the loan at the end of the term. With Tesla's long-standing liquidity concerns, it would be absolutely shocking (and could even constitute legal malpractice for the debtors' lawyers) if the debtors didn't have the right to call in the debt under such circumstances.

From a recent WSJ article on Tesla’s debt: https://www.wsj.com/articles/sizing-up-teslas-10-billion-deb....

If you look at the charts they provide, nearly half of Tesla’s own and SolarCity-inherited debt is in the form of convertible bonds. To the best of my knowledge, convertible bonds trade off debt seniority for the potential upside of an equity vehicle.

It seems that the rest of their debt is in the form of “vanilla” long term bonds. Very little comes from a revolving credit facility or other short term bank financing.

To the best of my knowledge, there is no such thing as a call provision exercisable by a bond holder. This would seem to defeat the entire purpose of issuing a bond from the issuer’s perspective in the first place; namely, access to capital for a finite amount of time in exchange for a fixed interest payment. Some bonds are certainly callable by the original issuer, at a premium to market price, but I struggle to think of a single publicly traded bond that gives the kinds of debt covenant style call provisions that you’re referring to.

I think that he is probably playing up threats like that in order to distract from what appear to be systemic problems at Tesla.

But, to be blunt, I've seen what organized activists in the bay area are both willing and able to do, and so I'm not comfortable with writing off the idea of sabotage as _absolutely_ impossible

Don't like Musk at all but to be fair, the email was leaked, it's not like he meant to share it publicly AFAWK.

An email to all his employees and worded like a blog post. It was expected that this will be leaked.

I definitely don't put it past him as others do this, I get that. It's a different level about what message tesla wants to send if he either sent an email to be leaked vs. saying this in a interview vs. saying this to share holders vs. putting this out as a formal statement.

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