Elon Musk’s dive into public relations disaster
A nouveau-riche ideas man with a warm heart but thin skin, Elon Musk has a big reputation for burning other people’s money.
When Elon Musk reached another low point in his quest to meet production targets for Tesla’s Model 3 electric car he likened his plight to Dante’s Inferno, a 14-century journey through hell.
Musk chose the eighth circle of hell, the space reserved for counterfeiters, hypocrites, grafters, seducers and sorcerers.
For critics of the billionaire it is a Freudian slip.
A nouveau-riche ideas man with a warm heart but thin skin, Musk has a big reputation for burning other people’s money.
In recent days he has continued his journey into turmoil, crossing two lines that have shaken the confidence of supporters and the wider community.
Twitter followers have turned against Musk over revelations he is a major donor to a US Republican Party fund.
Musk describes the donation as an act of “political expediency” rather than support.
He urged Silicon Valley’s environmental elite to vouch publicly for his good works.
But within days Musk turned an act of altruism into a public-relations disaster when without justification he called a hero of the Thai soccer team cave rescue a pedophile.
Musk has deleted the offending post but has yet to apologise.
British diver Vernon Unsworth is threatening to sue Musk for defamation.
The scandal hit Tesla’s share price yesterday, slicing $US2 billion ($2.7bn) off its market value.
Musk injected himself into the centre of the Thai cave rescue when he jetted in at the last moment with a mini-submarine capsule to evacuate the trapped boys.
Half of the young footballers had been evacuated when Musk arrived and the mission ended successfully without the use of the hi-tech capsule.
By getting involved, Musk exposed himself to accusations of grandstanding and seeking publicity from what could have been a human tragedy.
The involvement of Musk in the Thai rescue is uncannily familiar for those who followed his “rescue” mission for South Australia after it had a state-wide blackout in September 2016.
Billionaire Sydney software company chief executive Mike Cannon-Brookes asked Musk for help in a tweet.
Musk responded with an offer to supply the world’s biggest battery to South Australia in record time or it would be free of charge.
The battery has been installed and reportedly helps the stability of the South Australian electricity system, but the terms of the deal brokered by Musk remain secret.
In the case of the Thai rescue, one of Musk’s Twitter followers, MabzMagz, sent a plea for help.
“Hi sir, if possible can you assist in anyway to get the 12 Thailand boys and their coach out of the cave,” the tweet said.
Musk responded: “Boring Co has advanced ground penetrating radar and is pretty good at digging holes. Don’t know if pump rate is limited by electric power or pumps are too small. If so, could dropship fully charged Powerpacks and pumps.”
From there the venture took off like an online brainstorm. Wired magazine has given a rundown on what happened next.
Musk started down two paths. He contacted Wing Inflatables, a SpaceX contractor based in Arcata, California, which manufactures inflatable recovery parts.
They had a conference call with Musk and the result was a red Kevlar pouch designed to carry the boys. The “inflatable tube with air locks”, as Musk called it, could be pulled along, stretcher style.
“We started with a concept at 8am and had a prototype in the pool being tested the same day,” Arcata chief executive Andrew Branagh said. “Then the team stayed until one in the morning and built more units.”
Enough units to get all 12 boys, plus their coach, out of the cave and into the daylight. The following afternoon, Musk’s jet touched down in Arcata to pick up the potential life savers.
But Musk had hedged his bets with another design approach.
Made from an oxygen tube designed for a SpaceX Falcon rocket, the bullet-shaped capsule followed the same principle as the pouch the Wing team devised. It was an air pressure-controlled vehicle of sorts for the boys to lie inside while the pro divers guided them to safety.
Musk called it a “kid-sized submarine” and said it was 31cm in diameter, skinny enough to fit through the narrowest “choke hold” of the passage. He called it Wild Boar, in honour of the boys’ soccer team.
When Musk arrived, the rescue was well under way, but he dropped off the mini-sub in one of the caves. “Leaving this here in case it may be useful,” he tweeted. “Thailand is so beautiful.”
From there it was all downhill.
Unsworth, who provided mapping knowledge of the cave to rescuers, says Musk’s prototype had “absolutely no chance of working”.
Musk responded in a bizarre series of tweets referring to Unsworth, without naming him, as “pedo guy”. He later tweeted to his more than 22 million followers: “Bet ya a signed dollar it’s true.” Asked if he will take legal action against Musk over the allegation, Unsworth says: “If it’s what I think it is, yes.”
Unsworth says he will make a decision when he returns to Britain this week but adds the episode with Musk “ain’t finished”.
Roger Kay, an analyst with Endpoint Technologies Associates, told Channel News Asia: “This is the most brand-damaging thing Elon Musk has ever done.”
He says Musk appears to be following in the footsteps of US President Donald Trump in using Twitter to vent frustration and insult anyone with whom he disagrees.
Musk “is under a lot of pressure and we’re seeing pressure fractures”, Kay says.
“He’s been sleeping in his factories trying to get production up and that’s been difficult. But when he talks to investors, he has to reassure them that all that money isn’t going to fall on the floor.”
In contrast, Musk has joked the company is going bankrupt.
Patrick Moorhead, analyst and consultant with Moor Insights & Strategy, says to avoid long-term damage, “the first thing Musk needs to do is issue a huge apology”. The analyst says the boards of Tesla and privately held SpaceX need to assert themselves in this situation to ensure Musk does not go off the rails.
“If he does the right thing, he can recover from this,” Moorhead says.
The cave disaster has been the culmination of a rough few months for Musk.
As investors have waited for Tesla to turn the production corner with its Model 3 electric car, Musk has passed his time tweeting about his cat and selling giant flamethrowers through an offshoot tunnelling operation, The Boring Company.
Increasingly, however, the blowtorch has been focused on Musk’s over-exposed belly.
As production deadlines have been missed the lawsuits have started to fly.
There have been claims of industrial espionage and unfair demands on factory workers. Short-sellers are betting heavily against Tesla stock and investors are worried.
Infuriated by probing questions from journalists in May, Musk threatened to create a website where the public could rate the truth of any article and the credibility of the reporters responsible.
Last month, Musk accused an employee of “extensive and damaging sabotage” to the company’s operations in an email sent to company employees.
Musk said an employee had made code changes to the company’s operating system and exported “large amounts of highly sensitive Tesla data to unknown third parties”, according to the email, which was obtained by news agency Reuters.
The accusations of sabotage came a week after Musk announced layoffs for 9 per cent of the company’s workforce.
The following month, fired Tesla technician Martin Tripp filed a report with the Securities and Exchange Commission alleging the carmaker lied to investors and used dangerous batteries in its electric cars.
Tripp told the SEC the Silicon Valley car company had pushed for a number of potentially damaging measures to meet production quotas, including placing batteries with puncture holes into vehicles and reusing scrapped parts.
Tripp said the company also had inflated the number of Model 3 sedans it was making each week by up to 44 per cent.
The company has denied Tripp’s claims, saying no batteries with puncture holes had been used in cars, that Tripp was wrong about the scrap materials and the company’s production numbers were accurate.
In emails, Musk reportedly told Tripp he should be “ashamed” of himself and was “a horrible human being”.
Tripp has retained top New York lawyer Stuart Meissner, who represented an anonymous whistleblower in a 2016 case against agriculture chemical giant Monsanto that resulted in a $US22 million payment.
Meissner told The Washington Post that Tesla had sought to ruin Tripp’s reputation to protect its image and intimidate other potential whistleblowers from coming forward.
There are mounting reports about the pressures Tesla’s workforce is being put under to meet production deadlines.
The company built a new production line in a huge tent outside the main factory last month, which it said accounted for about 20 per cent of Model 3 production.
A lot of money is being placed on bets against Tesla succeeding, but it still has lots of supporters.
Criticisms of Musk’s rent-seeking approach have dogged the entrepreneur since a 2015 Los Angeles Times article detailed how his companies had received almost $US5bn in government subsidies and incentives.
The figure included government grants, tax breaks, factory construction, discounted loans, environmental credits that Tesla could sell, and tax credits and rebates to buyers of solar panels and electric cars.
The level of support has increased markedly since then.
But Musk continues to double down with plans to expand Tesla production into China and success with the SpaceX program, through which the billionaire is hoping to one day populate Mars.
The question being asked, however, is whether Musk has spread himself too thin.
And whether his myriad distractions such as flamethrowers, high-speed public transport schemes and cave rescues are conducive to running a complex manufacturing enterprise.
Do his outbursts about espionage or ill-chosen responses to criticism from analysts and people such as Unsworth illustrate too much stress or simply a lack of discipline?
There are no shortage of people waiting for Musk to slip to Dante’s ninth and final circle. The one reserved for people who are a traitor to their benefactors.
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