July 9, 2024 • 36 mins
Bloomberg reporters Josh Eidelson and Loren Grush recently went deep on a tangle of lawsuits orbiting SpaceX, all related to toxic workplace allegations including sexual harassment and retaliation. They join the Elon, Inc., panel to tell us what they found. Also, Dana and Max discuss a new feud developing between Musk and venture capitalist Reid Hoffman while delivering some thoughts on the fate of those who short Tesla stock.
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Speaker 1 (00:03):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:14):
Well, Elon Musk is now the richest person on the planet.
Speaker 3 (00:17):
More than half the satellites in space are owned and
controlled by one man.
Speaker 4 (00:22):
Well, he's a legitimate super genius. I mean legitimate.
Speaker 1 (00:25):
He says he's always voted for Democrats, but this year
it will be different.
Speaker 5 (00:29):
He'll vote Republican.
Speaker 3 (00:30):
There is a reason the US government is so reliant
on him. Alon Musk is a scam artist and he's
done nothing. Anything he does, he's fascinating people.
Speaker 4 (00:49):
Welcome to delon Ing, Bloomberg's weekly podcast about Elon Musk.
It's Tuesday, July ninth. I'm your host, David Poppadopolis. This
week we'll dig into a business story by reporters Josh
Eidelsen and Lauren Grush about the problems at SpaceX, in
particularly anything Goes workplace culture that has spawned multiple lawsuits.
(01:11):
Former employees alleged that the fratthause mentality came from the
top and that Musk had them fired when they questioned
his leadership. Also, there's a new development and a feud
that has been simmering for years between LinkedIn founder reied
Hoffman and Elon our regulars Max Chafkin and Dana Hall
are here to discuss where the love was lost between
(01:31):
the two old pals, and stick around to the end.
We're gonna debate short shorts. Hey, Max, Hey, David, Dana Hello, Hello, Hello,
Okay Max. So usually our feud watch, of course, is
at the end of the show, but this one is
just so hot and just and rock them, sock them that.
(01:51):
We just got a bang right off the bat. We're
going to start with it. Tell us about it.
Speaker 2 (01:54):
Okay, Well, it's not just that it's hot, but maybe
it says something bigger. A couple days ago, Elon Musk
started tweeting, ixing about his longtime sort of friend colleague
Reid Hoffman, co founder of LinkedIn. He did a post
suggesting that the FBI should investigate Reid Hoffman along with
(02:18):
Bill Gates, for potential connections to Jeffrey Epstein, and then
suggested that if the FBI failed to investigate, that the
FBI should possibly be abolished.
Speaker 4 (02:27):
Pretty hot take.
Speaker 2 (02:29):
And not only is it sort of a hot take,
but it's one an attack against two very very public figures,
including one who has this long relationship with Elon Musk.
Reid Hoffman was one of the earliest employees of PayPal.
He and Musk, I don't think calling them friends is
maybe a stretch, but they have done a lot of
(02:49):
business together over the years, so it's pretty aggressive.
Speaker 4 (02:53):
I would say abolishing the FBI is a pretty radical proposal.
So then any sense of when the falling out began,
I don't really know.
Speaker 5 (03:02):
I mean, yeah, it seems like the PayPal mafia is
now eating itself, right, I mean, these guys have all
gone on to have incredible careers. Reid is this huge investor,
really big donor to the Democratic Party, And I think
a couple of things have happened, Like there was a
Ronan Faroh profile in The New Yorker a while ago
where Reid Hoffman was one of the sort of main
(03:23):
people quoted being critical of Elon. And Elon reads everything
about himself. It probably has Google alerts set for himself,
so he was probably not happy about that. Reid Hoffman
is on the board of Microsoft and was on the
board of Open Ai, and you know, Musk is now
in this blocked battle about with Sam Altman and Ai.
And then there's the whole political thing about David Sachs
(03:47):
who's another PayPal mafia guy, seems to be Musk's kind
of de facto foreign policy advisor. And then Reid came
out swinging in a tweet, in a bunch of tweets
sort of against David Sachs. So I don't really know
where this all where this all is, but my impression
is that I don't mean, I don't think that Reid
(04:07):
Hoffman has been a big investor in Elon's companies like
Graylock is not.
Speaker 3 (04:11):
Sequoya definitely not.
Speaker 2 (04:13):
And we should also say that they, you know, Reid
Hoffman was part of this crew that you know, more
than twenty years ago, almost twenty five years ago, got
Elon fired and a.
Speaker 4 (04:24):
Right managed too that had him ousted.
Speaker 2 (04:27):
As a PayPal CEO, which which I think is still
kind of like one of the formative things in his
business career, something that you know, he he you know,
has found a way to forgive and work with some
of these folks. Sequoya, which was instrumental in that firing,
as Dan is hinting, you know, has invested in a
lot of his companies. But it's but again it's it's
not exactly like they're the greatest of pals and the
(04:51):
other thing. I mean, I think you have several things
going on, one of which is that Elon Musk is
very engaged in the twenty twenty four or election. He's
he's essentially you know with this this reied Hofmin quote
tweet is you know, one of many that have come
out over the last few days, and you know about
allegations that the Democrats are secretly importing illegal aliens to vote.
(05:13):
You know, he's very much still on that. You know,
he's this is like part of a general like, Hey,
I'm posting a lot of right wing memes. The Epstein
thing very popular among conservatives. It ties into some other
concerns slash conspiracies around pedophilia and so on, and so
I think like that's part of the squirrel. And then,
(05:34):
as Dana is saying, like Reid Hoffman is a business
adversary of Elon Musk at this point, and you know,
as as somebody who's closely associated with open Ai, the
hottest company in the field that Elon Musk very wants,
very much wants to participate in.
Speaker 4 (05:49):
So he's both a business adversary at this point and
also a political adversariy.
Speaker 2 (05:54):
Absolutely, yeah, as a major dem donor and if Elon
you know, we've talked about the possibility that Elon Musk
could donate to Trump as Donald Trump and his campaign
would certainly hope you know, that would put him, you know,
basically in the Reid Hoffman role but for the Republicans, okay.
Speaker 4 (06:10):
And so then this whole thing from Elon about you know,
the FBI has got to investigate Hoffman for his Epstein connections.
Weird to take this seriously or simply see it in
the through the light of the of what you had
mentioned earlier, that it this just happens to be a
very popular conspiracy theory among.
Speaker 2 (06:29):
I think we need to take it as a political
slash posting kind of thing, not as a like serious
policy proposal, although there are serious policy proposals within the
sort of Trump world that involve getting rid of the
FBI or or at least making it more subservient to
like the president than than it currently is.
Speaker 5 (06:51):
It's also interesting to me that that Musk is lumping
Reid Hoffman and Bill Gates together because, as Maxwell knows,
the feud with Bill Gates is goes on for it
has been like a long standing Elon feud because Bill
Gates was shorting Tessela stock at one point, and so
Musk has always had this thing about Bill Gates and
(07:12):
now he's kind of lumping Bill and read together. Reid
is obviously on the board of Microsoft.
Speaker 3 (07:17):
Yeah, yeah, there, and both as major backers of Open Ai.
Speaker 4 (07:20):
Of course, now has Dana has Has Hoffman responded to
these tweets from Elon.
Speaker 5 (07:27):
Not that I'm aware of. I mean, I think that
he's shrewd enough to know that like there's no upside
and kind of like responding to Elon in this way
on Elon's platform.
Speaker 2 (07:37):
We should say there has been serious reporting on connections
of many executives, including Reid Hoffman, with with Jeffrey Epstein.
He has said he regrets having had any dealings with
Epstein and that the dealings we're having to do with
trying to raise money for MIT, which you know doesn't
sound like Elon Musk credits that, but that is the
(07:57):
that is his position.
Speaker 4 (07:59):
Okay, listen, you two, We're going to let you go briefly,
so go out, get yourself, you know, a cup of coffee,
stretch the legs, and we'll see you back at the
end of the show. Okay, Okay, So now we're going
(08:19):
to talk about SpaceX and the legal battle they are
in with some former employees of theirs. And to do
this we have Josh Idelson, senior reporter covering labor first
here Bloomberglo Josh, Hello, and Lauren Grush, who covers space
for US.
Speaker 1 (08:38):
Hello, Lauren, Hi, good to be here in.
Speaker 4 (08:41):
The story that you guys had that's out today. I'm Bloomberg.
Great story. There are many lawsuits and counter lawsuits and
the like, and it can all get a bit complicated.
But explain what the contours are of the main lawsuit here,
the one brought by the eight former SpaceX employees.
Speaker 3 (09:00):
So, eight former SpaceX engineers allege that SpaceX subjected workers
to sexual harassment, that men stared at women's chests, said
they were biologically incapable of being engineers, made crude jokes
that mimicked Elon Musk's tweets, that Elon Musk was injecting
(09:23):
inappropriate content into the workplace that contributed to a hostile
work environment, and that rather than addressing these issues, rather
than punishing people for actual misconduct, Elon Musk and other
executives punished the people who spoke up about it that
because these eight people and others were involved in an
(09:47):
open letter urging the company to hold everybody accountable, including
to what SpaceX calls its no Apple policy, SpaceX responded
with firings. These eight employed poes brought these allegations to
the US labor board, the National Labor Relations Board known
as the NLRB, which issued a complaint in January, and
(10:09):
after SpaceX responded to that NLRB case by suing the NARB,
saying that the NLRB is unconstitutional and any trial it
would have under its existing structure would be illegitimate and
unfair to SpaceX. These workers also brought claims in California
(10:30):
State court saying that a company has been violating California
law about sexual harassment and whistleblower retaliation. So that brings
us to three cases.
Speaker 4 (10:42):
It's a big step to say, hey, we're going to
write an open letter addressed to the CEO and the
rest of the management and effectively challenge them. What led
them to do that?
Speaker 6 (10:55):
Yeah, The way it was described to us is that
it was building for some time. In the article we
talk about, you know, the underlying culture of SpaceX, which
Josh had touched on, but yeah, it was.
Speaker 1 (11:07):
You know, it's an open secret.
Speaker 6 (11:08):
I wouldn't even say it's a secret, but you know,
SpaceX has a really strong burnout culture. They hire twenty
somethings out of college and they they purposely kind of
put them through the ringer, make them work long hours.
And the way that is often described to us is
kind of mimicking Elon because you know, he's been very
open about how much he values work, sleeping in his office,
(11:29):
you know, staying late to meet really hard deadlines. So
there's a lot of stuff that trickles down from the
top that kind of permeates SpaceX. And so some of
that also had to do with his crash jokes and
kind of the casual sexism that he displays in his
online persona. They were seeing that, you know, at work
as well. One of the things that they like to
(11:50):
point out to is his joke about university and how
people were making jokes about that particular tweet that he
made and it's technically Texas Institute of Technology and Science,
and he had made a follow up joke about you know,
where d's get degrees, and so, you know, at.
Speaker 1 (12:09):
Work, a few folks had heard jokes.
Speaker 6 (12:12):
Being made about university and who might be able to attend,
and so it was just kind of those things would
seep through into the culture. But then there were a
few inciting incidents that really led up to this.
Speaker 1 (12:23):
The first big.
Speaker 6 (12:24):
One was a former employee by the name of Ashley
Cosack had written an essay for the publication Lioness about
her experience with sexual harassment at SpaceX. And then probably
the biggest moment that really made them turn a corner
was a Business Insider article that came out alleging SpaceX
(12:46):
had paid a flight attendant two hundred and fifty thousand
dollars to keep quiet about harassment that she had experienced
by Elon Musk. And so so all those things led
up to it, but we really put that over the
edge was Gwinn shot Well, the president of SpaceX, response
to that article, basically defending Elon, saying, Oh, I don't
(13:07):
believe these allegations. I've known Elon. He couldn't possibly have
done this. You know, he's this is not the man
I know him to be. And so that response from
Gwinn was really when most of the people involved with
the letter realized, Okay, this you know, change isn't going
to come from the top. This is something that we
have to do ourselves, and so that ultimately inspired them
to take collective action together.
Speaker 4 (13:29):
Gwinn was seen by many as the adult in the
room and the person who sort of helped keep SpaceX
on task and cloud through some of the distractions created
by Elon.
Speaker 6 (13:42):
Yeah, and if you think, if you read and listen
to all of the commentary that is out there about SpaceX,
you know, so much emphasis is placed on the fact
that Gwen is the one in charge.
Speaker 1 (13:54):
You know.
Speaker 6 (13:54):
We referenced an interview with NASA administrator Bill Nelson, who
is frequently asked about Elon's behavior because SpaceX is such
a big partner with NASA, and time and time again,
he constantly points to the fact that the best thing
that Elon did was he put Gwen shot Well in charge,
and so therefore he has full confidence in SpaceX to
(14:16):
do the things that they say they're going to do
and operate professionally because of Gwen, you know, she is
often lauded as the adult in the room, but there
are times when she does essentially, you know, do what
Elon wants for the company. And because he is ultimately
the top of the company.
Speaker 4 (14:33):
Okay, so Josh In mid twenty twenty two, this letter
is written and circulated. How many fellow SpaceX employees ultimately
wind up signing this letter?
Speaker 3 (14:45):
More than four hundred SpaceX employees had signed on to
the letter when it was posted on an internal server
before it was taken down.
Speaker 6 (14:53):
And something important to note David too, is that the
letter wasn't available for signing for very.
Speaker 4 (14:59):
Long, Like how long? How long was it up before
it got pulled down?
Speaker 6 (15:03):
I believe it was roughly a day and a half less,
you know, it wasn't very long that people had the
opportunity to actually sign on to it. So that's four
hundred people before it was ultimately taken down.
Speaker 3 (15:15):
One of the things that stood out about this letter,
while it does call out Elon Musk, is it goes
to lengths to cite the company's own values, to emphasize
pride in the company, how much the company has accomplished
in other areas, and couldn't it similarly be more ambitious
about diversity and equity and inclusion. We report in the
(15:38):
story there had been discussion about doing something like a walkout,
as had happened at Google, and the authors decided instead
to go with something that felt more like a conversation
among family. They said there was a sense of trying
to speak in away the company could hear.
Speaker 4 (15:54):
Right if that was the hope, though, the response they
get in addition to their to their firing, the firing
of these people is in the aftermath. As one Musk
loyalist in the company puts it, Lauren is SpaceX is Elon,
and Elon is SpaceX I E. This is who we are.
This is the way we're going to roll, you know,
(16:15):
like it or leave it.
Speaker 6 (16:16):
Yeah, essentially, yeah, it's it's They made it very clear
that the company was not going to you know, extricate
themselves from Elon's personal brand, and that was ultimately where
I think the letter writers really understood that, you know,
(16:37):
if there was going to be any dissent in this workplace,
it was going to be quote unquote canceled, which is
ironic given Elon's penchant for, you know, decrine wokeness and
cancel culture. I feel like there's been multiple times where
Elon has proclaimed, oh, you know, if your employer fires
you for speaking up about certain things, you know, we
(16:59):
will pay well.
Speaker 1 (17:00):
The lawyer Bill. I think I remember him speaking to that.
Speaker 6 (17:03):
Point, and you know, a lot of people kind of
pointed out the hypocrisy there. But that's essentially what happened here, right,
is that a group of his employees were speaking up
about working conditions.
Speaker 1 (17:13):
They happened to target.
Speaker 6 (17:15):
Him specifically when they were doing so, but they were
talking about the company culture as a whole, and how
they wanted to make sure that that no Apple policy
that we've discussed was being applied equally to everyone, because
they were pointing out that, you know, if some of
the people at SpaceX behaved the way that Elon did,
that behavior would certainly not fly at least according to
(17:37):
this so called no Apple policy.
Speaker 4 (17:39):
Okay, so Elon responded initially by by cracking down and
by firing all the people, the rebels who led the
who led the uprising. How else has he responded to
this whole episode, if at all learned?
Speaker 6 (17:58):
Oh, there have been various jokes on Twitter, if you
can believe it, But yes, people have tweeted memes about
the fired letter writers, and he's responded to them with
laughing emojis and things like that. So basically treating the
entire thing as a joke, and the common refrain online
is you know, oh, if you're going to speak up
(18:19):
about your employer, how can you be shocked that you
would get fired? And he's kind of fed into that
narrative as well with his tweets and responses.
Speaker 4 (18:27):
Now, Josh, the firings themselves, they came pretty quickly in
the aftermath of the letter and were pretty ruthless tell
us a bit about how they went down.
Speaker 3 (18:36):
So by the day after the letter was posted, several
of the key people involved had been fired. One told
us he knew he was in trouble when he got
called into the conference room with the frosted windows when
shot well, Tella chastised the workers via a laptop that
(18:56):
was pointed away from the person being fired in each
case and accused them of distracting the company. One of
them was walked out so quickly that the vice president
for HR after doing so, had to call him and
ask him to come back and get his last paycheck,
and Gwen emailed the whole staff, telling them that there
(19:21):
was no need for this sort of what she called
overreaching activism and that people involved had been terminated.
Speaker 4 (19:33):
Now Lauren, one of those terminated is a woman by
the name of Paige holl And teal and tell us
a little bit about her.
Speaker 6 (19:40):
Yeah, she was really kind of the forcing function for
this entire thing. She was the one that created the
group chat that ultimately led to the collective writing of
the letter, and she's been probably the most vocal throughout
this whole experience. But she goes into detail about the
(20:00):
experiences that she had at SpaceX leading up to this.
You know, she talks about the fact that she felt
like she was her voice wasn't heard, that she was
left out a lot of decisions that she felt like
she should have been a part of that She would
have ideas that people wouldn't take seriously, but then when
her male colleagues would present them, then they would suddenly
(20:20):
be taken seriously. She also, you know, experienced this casual
sexism that we talked about, where people were making really
inappropriate jokes. At one point, she talked about how she
was actually going to go to a manager and talked
to him about you know, sexism that she had overheard
and inappropriate behavior that she'd overheard, and as she was
talking to him, he cracked a joke. So, you know,
(20:44):
she had started to experience this behavior for a while
leading up to this, trying to justify whether or not
it was right. You know, one thing she talked about
was feeling trapped because you know, as Josh mentioned, you
know a lot of these people came on in spite
of but they ultimately came on, you know, thinking that
they were going to be changing the world.
Speaker 1 (21:05):
They definitely felt that.
Speaker 6 (21:07):
The entire goal and conceit of SpaceX was what they
ultimately wanted to sign on for, you know, making humans multiplanetary,
you know, helping Earth by sending people to space, sending
satellites to space. That was kind of the thesis that
they agreed to, agreed to sign onto when they came
onto the company. And so for a lot of them,
(21:29):
you know, they felt like they couldn't go anywhere else,
including Paige, because this was the only place that was
doing the meaningful kind of space work that they wanted
to do.
Speaker 4 (21:38):
Now, Josh, what does Page and the others, what exactly
do they want from this lawsuit? Do they want to
return to SpaceX?
Speaker 3 (21:47):
So in the case that the workers brought to the
National Labor Relations Board the n LRB, the government, were
it to succeed, could force SpaceX to offer for reinstatement
to those workers. In the lawsuit that these workers filed
in California State Court, along with damages, they are seeking
(22:09):
an injunction to force the company to change the conditions
that they say created this hostile work environment.
Speaker 4 (22:16):
It is our understanding, Lauren, though, that those conditions described
then largely still exist at SpaceX today.
Speaker 1 (22:26):
Yes, and no. I think multiple things can be true.
Speaker 6 (22:28):
I think there are probably some people at SpaceX who
experience a great working and you know, they don't have
any problems. One thing that we know about spaces is
it's predominantly male, and so I think there are probably
plenty of people who have great experiences at the company.
Speaker 1 (22:45):
However, I think probably there are quite a.
Speaker 6 (22:48):
Few people who also experience the same thing that these
letter writers are voicing, you know, opposition to I think
what has been very clear is since this letter was written,
is that people are definitely not coming forward about any
grievances they have with the company anytime soon, at least
in a public.
Speaker 1 (23:08):
Way like this.
Speaker 6 (23:10):
You know, the sources that I speak to within the company,
they just say that, you know, their ambition is just
to work. They just want to focus on the job.
They just want to put their heads down and not
think about what Elon is doing.
Speaker 1 (23:24):
What he's saying.
Speaker 4 (23:25):
Now, I want to talk for a second a bit
about the National Labor Relations Board Josh, which is where
this lawsuit, the main suit, was filed. In the story,
you guys write that it too, in the process of
this suit being filed, there has come under pressure of
its own and that Musk to a certain degree, has
(23:47):
the group on the retreat.
Speaker 3 (23:49):
Explain, the NLRB is small agency that is tasked with
making it so that you can collectively complain about your
boss or about the conditions on your job without losing
your job over it. And Elon Musk now has this
agency on the defense because after the NLRB brought its
(24:14):
case against SpaceX, the next day, SpaceX brought a lawsuit
arguing that the NLRB is unconstitutional, that its structure violates
the tenets of the Constitution. And as usual, Elon Musk
brought this case to Texas to the Fifth Circuit Court
(24:37):
of Appeals, which has become in a way, his legal
safe space. It has repeatedly taken up and considered overturning
or overturned rulings against Elon's companies, and after some initial
traction for the NLRB and the workers and trying to
(24:57):
get the lawsuit from SpaceX shipped off to California to
a friendlier set of judges, Elon Musk is now winning
because a panel of Fifth Circuit judges agreed to an
injunction putting the NLRB's case on pause, and the NLRB,
(25:19):
in an effort to disgorge this case from the Fifth Circuit,
has now volunteered the idea of indefinitely pausing its case
against SpaceX while Elon Musk and SpaceX's lawsuit against the
NLRB proceeds. And the lawsuit that SpaceX has brought does
(25:41):
not just potentially affect SpaceX workers.
Speaker 4 (25:44):
It would affect right every similar case presumably across all
industries would now I guess this would serve as something
of a precedent for them. So in other words, the
NLRB is saying, Okay, we're going to drop our not
drop our case, but we're just going to hang out
until essentially another court decides if we're a legal constitutional body.
(26:08):
So it sounds like the stakes are pretty high here, Josh.
Speaker 3 (26:11):
The stakes are high here with the trumpified judiciary, we
could see any number of outcomes, including changing the structure
of the agency so that the next president, say Donald Trump,
could fire all of the NLRB's judges who consider cases
like this and replace them, could fire all the members
(26:34):
of the NLRB who consider appeals of those rulings and
replace them. There could be hundreds of cases forcibly rewound
back to before an agency judge considered them, and there
is now fear from advocates and including from workers we
(26:55):
talked to that the consequence of their effort to stand
up to the company could be an opportunity for the
judiciary to take a bite out of the agency that's
supposed to protect this kind of activism.
Speaker 4 (27:09):
I suppose the other large institution that would or could
potentially serve as a check on SpaceX and its culture
and behavior is NASA. NASA, which of course hands out
any number of large contracts to SpaceX. Is what is
nasau stance on the topic.
Speaker 6 (27:28):
NASA does not want to talk about it. It's ultimately
their stance about it. Over the last two decades, SpaceX
has become indispensable to the federal government in terms of
our space program's needs, that ranges from launching the Space
Force's most sensitive national security satellites, and it also extends
(27:48):
to launching humans to the International Space Station. So both
NASA and the Space Force greatly rely on SpaceX so
basically prop up our space.
Speaker 1 (27:57):
Program at the moment.
Speaker 6 (27:59):
And at the same time, Elon's behavior has also become
more and more public and you know, more and more
crass in the public sphere, and you know, we continue
to ask NASA and the Space Force, you know, if
they condone this behavior. Very famously, when Elon Musk smoked
pot on Joe Rogan's podcast, NASA conducted an audit of
(28:21):
SpaceX's safety culture, but they ultimately determined that, you know,
SpaceX was above board and everything was fine. There have
been efforts to foia that audit and they have come
back completely redacted.
Speaker 1 (28:35):
But basically that's all we have really to go on
at the moment.
Speaker 6 (28:39):
And one thing that I also want to point out is,
you know, NASA has really struggled in recent years to
pull off some of its big ambitious programs. Has had
a flat budget adjusted for inflation for the past few decades,
and SpaceX has really come in and enabled them to
pull off the these big exploration programs that they have been
(29:02):
eyeing for supposedly cheaper costs and on a quicker timeline,
And I think there is kind of reluctance to disturb
that status quo Elon being a part of that, because
it has been kind of this magical company that has
come in and really allowed them to do bold and
(29:24):
ambitious things, and so I think they just don't want
to rock that boat.
Speaker 4 (29:29):
Josh Lauren, thank you very much for bringing us this
story and for joining us.
Speaker 3 (29:33):
Thank you, thank you so much.
Speaker 4 (29:38):
So Max and Dana are back with us. Oh you listeners,
You're so lucky, And we're going to talk some more
about that blistering rally in Tesla stock Max, as I
look at my screen here, it is now up for
the year, and it also looks like some big hedge
funds bet against it at the worst possible time.
Speaker 2 (29:59):
Yeah, we've been talking about this for you know, a
few weeks now, but Elon Musk has had a few wins.
I mean, you know, this pay vote was certainly an
endorsement of his leadership at a time when there were
lots of questions passing easily.
Speaker 4 (30:14):
Even if it doesn't actually leaven if it.
Speaker 2 (30:16):
Doesn't actually lead to anything, does does kind of reaffirm
that that he's he's there, he's not leaving.
Speaker 4 (30:21):
You know that investors like that.
Speaker 2 (30:23):
You also had what really did not seem like a
great quarter, but that investors have managed to decide was
a great quarter because it narrowly beat expectations. I think, really,
what's going on for sales, Yes, I think what's really
going on is there's just it's like a ViBe's thing.
People are are feeling like the vibe has turned and
(30:44):
we have this big Robotaxi unveiling coming up, and everyone
has decided that like that's gonna be the thing that
fixes all the problems that we've been talking about. And
of course there's a very good case to take the
other side of that bet to to say, look like
not much has changed with the fundamentals as business.
Speaker 4 (31:03):
This Robotaxi thing.
Speaker 2 (31:04):
There's no quest there's no reason to think it's gonna,
you know, happen anytime soon. And I think that explains
why you have a lot of people shorting the stock.
But the really exciting thing about this, David, is that
this means that Elon Musk loves to stick it to
the shorts, So maybe we'll get some short shorts, some
new Tesla merch.
Speaker 4 (31:22):
Yeah, I mean, Dan right, if you're ever gonna roll
the short shorts back out, and they are shorts that
Tesla had created and I believe was briefly selling to
pet and they were.
Speaker 5 (31:32):
Like red and silk. Could I think, David, I mean,
I think if I'm recalling correctly, Elon Musk like mailed
them or something like.
Speaker 4 (31:40):
You said, so, David Einhorn, who who was a big
you know, short for a long time. I suppose now
if they do crank him out again and again, part
of my thinking is Max right, if it's being so
darn hot out right now, if you're ever gonna reintroduce
some relaunch him, now's the time. I feel like he
should send some to Gates, even if Gates still isn't
(32:02):
shorting the stock, right, you know.
Speaker 2 (32:03):
It's almost worth with this with the temperatures, it's almost
worth shorting the stock just to get.
Speaker 5 (32:09):
I think they should be like black cyber cab or
cargo shorts, you know, like that's how they could maybe
market them. It could be like a robotex carbon short.
Speaker 4 (32:19):
The problem is with black in the summer it's hot,
so the stock is up. Temperatures are up, the short
shorts are coming back, and Musk is happy.
Speaker 2 (32:28):
I just want to say the stock is up on
the year if you back up, if you turn the
clock back two years to you know, November twenty one,
when the stock hit an all time high. It's still
way down from there, I think nearly forty percent. And
as Escha Day has mentioned on this podcast several times now,
it is a stock that swing swings around like there
(32:50):
are these big ups, big downs, Like I think you
don't want to read in too much to anything, especially
until we see you know what exactly happens at this Robotech.
Speaker 4 (32:59):
Yeah, Dan, it's all signs point to the great Robotaxi launch.
Speaker 5 (33:04):
Yes, but just to be clear, before the Robotaxi, we
have earnings Tuesday, July twenty third. And the reason why
the stock is up in part is because Tesla cleared
out a lot of inventory that was like an overhang
in Q one, so that's going to help them with
their margins. They're all excited about the Mega pack. Listeners,
we will do a Megapack special episode at some point.
Speaker 4 (33:25):
The two hours all about the Mega Pack.
Speaker 5 (33:28):
So the stock is up because the you know, the
earnings should be better because they they got rid of
all this inventory. So that's that's a big part of
it too.
Speaker 4 (33:35):
But this is why it's very very important to have
you on the show because you keep us the task here.
Speaker 5 (33:40):
Don't let your ROBOTAXI enthusiasm.
Speaker 2 (33:45):
Do you really think though, that the dan you really
think the stock is getting run up like this because
of you know, inventories being I'm not sure I have
confidence that, like the market is as rational as that.
Speaker 3 (33:57):
What I'm just.
Speaker 5 (33:57):
Saying is, like, from a fundamental perspective, Q one was
a really lousy quarter because they they made more cars
than they could sell. In Q two, they sold more
cars than they made So all of these like old
model threes and model wise that were like sitting around
in parking lots, and the parking lot truthers were out
talking about this inventory build out that built that inventory
(34:18):
has now been cleared and that really helps Tesla because
Tesla does not have dealers. They sell cars directly to
their consumers, so then when they have a lot of
inventory sitting around that is just like a dead weight
on their balance sheets. So the fact that they managed
to clear this inventory helps them. Is that why the
stock is gone berserk? No, I mean the stock is
going doing what it's doing because everyone's excited to hear
(34:40):
about the.
Speaker 4 (34:40):
Rover, about the Robotaxi, and and it's a moment. It's
a huge momentum for.
Speaker 2 (34:44):
People are so excited they're just they're spinning up these
like crazy. I don't know if you all saw that
the big rumor among the Tesla enthusiasts was that he
had secretly hired Elon said, this is not true, that
he had secretly hired Uber founder Travis Kalanik to lead
the Robotaxi efforts to bring being the band of kind
of like slightly canceled figures together to usher us into
(35:06):
the new AI era. I'm sad it's not true, because
it would be fun to see Elon and Travis, those
are two very strong personalities come together.
Speaker 4 (35:14):
All right, Absolutely, all should be revealed in one month.
And yeah, and we'll watch the stock in the meantime.
Max Dana, thanks as always, pleasure to be here at Gridgebier.
This episode was produced by Stacey Wong, Naomi Shaven and
(35:36):
Rayan Harmancia are senior editors. The idea for This very
show also came from Rayhon Blake Maples handles engineering, and
we get special editing assistants from Jeff Grocott, Antonio Muffarech
and Ourfat jalas show Perry. Our supervising producer is Magnus Hendrickson.
The Elon Inc. Theme is written and performed by Taka
Yasuzau and Alex sugi Era. Brendon Francis new them as
(36:00):
our executive producer, and Sage Bauman is the head of
Bloomberg Podcasts. A big thanks to our supporter Joel Weber.
I'm David Papadopolis. If you have a minute, rate and
review our show, it'll help other listeners find us. See
you next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:14):
Well, Elon Musk is now the richest person on the planet.
Speaker 3 (00:17):
More than half the satellites in space are owned and
controlled by one man.
Speaker 4 (00:22):
Well, he's a legitimate super genius. I mean legitimate.
Speaker 1 (00:25):
He says he's always voted for Democrats, but this year
it will be different.
Speaker 5 (00:29):
He'll vote Republican.
Speaker 3 (00:30):
There is a reason the US government is so reliant
on him. Alon Musk is a scam artist and he's
done nothing. Anything he does, he's fascinating people.
Speaker 4 (00:49):
Welcome to delon Ing, Bloomberg's weekly podcast about Elon Musk.
It's Tuesday, July ninth. I'm your host, David Poppadopolis. This
week we'll dig into a business story by reporters Josh
Eidelsen and Lauren Grush about the problems at SpaceX, in
particularly anything Goes workplace culture that has spawned multiple lawsuits.
(01:11):
Former employees alleged that the fratthause mentality came from the
top and that Musk had them fired when they questioned
his leadership. Also, there's a new development and a feud
that has been simmering for years between LinkedIn founder reied
Hoffman and Elon our regulars Max Chafkin and Dana Hall
are here to discuss where the love was lost between
(01:31):
the two old pals, and stick around to the end.
We're gonna debate short shorts. Hey, Max, Hey, David, Dana Hello, Hello, Hello,
Okay Max. So usually our feud watch, of course, is
at the end of the show, but this one is
just so hot and just and rock them, sock them that.
(01:51):
We just got a bang right off the bat. We're
going to start with it. Tell us about it.
Speaker 2 (01:54):
Okay, Well, it's not just that it's hot, but maybe
it says something bigger. A couple days ago, Elon Musk
started tweeting, ixing about his longtime sort of friend colleague
Reid Hoffman, co founder of LinkedIn. He did a post
suggesting that the FBI should investigate Reid Hoffman along with
(02:18):
Bill Gates, for potential connections to Jeffrey Epstein, and then
suggested that if the FBI failed to investigate, that the
FBI should possibly be abolished.
Speaker 4 (02:27):
Pretty hot take.
Speaker 2 (02:29):
And not only is it sort of a hot take,
but it's one an attack against two very very public figures,
including one who has this long relationship with Elon Musk.
Reid Hoffman was one of the earliest employees of PayPal.
He and Musk, I don't think calling them friends is
maybe a stretch, but they have done a lot of
(02:49):
business together over the years, so it's pretty aggressive.
Speaker 4 (02:53):
I would say abolishing the FBI is a pretty radical proposal.
So then any sense of when the falling out began,
I don't really know.
Speaker 5 (03:02):
I mean, yeah, it seems like the PayPal mafia is
now eating itself, right, I mean, these guys have all
gone on to have incredible careers. Reid is this huge investor,
really big donor to the Democratic Party, And I think
a couple of things have happened, Like there was a
Ronan Faroh profile in The New Yorker a while ago
where Reid Hoffman was one of the sort of main
(03:23):
people quoted being critical of Elon. And Elon reads everything
about himself. It probably has Google alerts set for himself,
so he was probably not happy about that. Reid Hoffman
is on the board of Microsoft and was on the
board of Open Ai, and you know, Musk is now
in this blocked battle about with Sam Altman and Ai.
And then there's the whole political thing about David Sachs
(03:47):
who's another PayPal mafia guy, seems to be Musk's kind
of de facto foreign policy advisor. And then Reid came
out swinging in a tweet, in a bunch of tweets
sort of against David Sachs. So I don't really know
where this all where this all is, but my impression
is that I don't mean, I don't think that Reid
(04:07):
Hoffman has been a big investor in Elon's companies like
Graylock is not.
Speaker 3 (04:11):
Sequoya definitely not.
Speaker 2 (04:13):
And we should also say that they, you know, Reid
Hoffman was part of this crew that you know, more
than twenty years ago, almost twenty five years ago, got
Elon fired and a.
Speaker 4 (04:24):
Right managed too that had him ousted.
Speaker 2 (04:27):
As a PayPal CEO, which which I think is still
kind of like one of the formative things in his
business career, something that you know, he he you know,
has found a way to forgive and work with some
of these folks. Sequoya, which was instrumental in that firing,
as Dan is hinting, you know, has invested in a
lot of his companies. But it's but again it's it's
not exactly like they're the greatest of pals and the
(04:51):
other thing. I mean, I think you have several things
going on, one of which is that Elon Musk is
very engaged in the twenty twenty four or election. He's
he's essentially you know with this this reied Hofmin quote
tweet is you know, one of many that have come
out over the last few days, and you know about
allegations that the Democrats are secretly importing illegal aliens to vote.
(05:13):
You know, he's very much still on that. You know,
he's this is like part of a general like, Hey,
I'm posting a lot of right wing memes. The Epstein
thing very popular among conservatives. It ties into some other
concerns slash conspiracies around pedophilia and so on, and so
I think like that's part of the squirrel. And then,
(05:34):
as Dana is saying, like Reid Hoffman is a business
adversary of Elon Musk at this point, and you know,
as as somebody who's closely associated with open Ai, the
hottest company in the field that Elon Musk very wants,
very much wants to participate in.
Speaker 4 (05:49):
So he's both a business adversary at this point and
also a political adversariy.
Speaker 2 (05:54):
Absolutely, yeah, as a major dem donor and if Elon
you know, we've talked about the possibility that Elon Musk
could donate to Trump as Donald Trump and his campaign
would certainly hope you know, that would put him, you know,
basically in the Reid Hoffman role but for the Republicans, okay.
Speaker 4 (06:10):
And so then this whole thing from Elon about you know,
the FBI has got to investigate Hoffman for his Epstein connections.
Weird to take this seriously or simply see it in
the through the light of the of what you had
mentioned earlier, that it this just happens to be a
very popular conspiracy theory among.
Speaker 2 (06:29):
I think we need to take it as a political
slash posting kind of thing, not as a like serious
policy proposal, although there are serious policy proposals within the
sort of Trump world that involve getting rid of the
FBI or or at least making it more subservient to
like the president than than it currently is.
Speaker 5 (06:51):
It's also interesting to me that that Musk is lumping
Reid Hoffman and Bill Gates together because, as Maxwell knows,
the feud with Bill Gates is goes on for it
has been like a long standing Elon feud because Bill
Gates was shorting Tessela stock at one point, and so
Musk has always had this thing about Bill Gates and
(07:12):
now he's kind of lumping Bill and read together. Reid
is obviously on the board of Microsoft.
Speaker 3 (07:17):
Yeah, yeah, there, and both as major backers of Open Ai.
Speaker 4 (07:20):
Of course, now has Dana has Has Hoffman responded to
these tweets from Elon.
Speaker 5 (07:27):
Not that I'm aware of. I mean, I think that
he's shrewd enough to know that like there's no upside
and kind of like responding to Elon in this way
on Elon's platform.
Speaker 2 (07:37):
We should say there has been serious reporting on connections
of many executives, including Reid Hoffman, with with Jeffrey Epstein.
He has said he regrets having had any dealings with
Epstein and that the dealings we're having to do with
trying to raise money for MIT, which you know doesn't
sound like Elon Musk credits that, but that is the
(07:57):
that is his position.
Speaker 4 (07:59):
Okay, listen, you two, We're going to let you go briefly,
so go out, get yourself, you know, a cup of coffee,
stretch the legs, and we'll see you back at the
end of the show. Okay, Okay, So now we're going
(08:19):
to talk about SpaceX and the legal battle they are
in with some former employees of theirs. And to do
this we have Josh Idelson, senior reporter covering labor first
here Bloomberglo Josh, Hello, and Lauren Grush, who covers space
for US.
Speaker 1 (08:38):
Hello, Lauren, Hi, good to be here in.
Speaker 4 (08:41):
The story that you guys had that's out today. I'm Bloomberg.
Great story. There are many lawsuits and counter lawsuits and
the like, and it can all get a bit complicated.
But explain what the contours are of the main lawsuit here,
the one brought by the eight former SpaceX employees.
Speaker 3 (09:00):
So, eight former SpaceX engineers allege that SpaceX subjected workers
to sexual harassment, that men stared at women's chests, said
they were biologically incapable of being engineers, made crude jokes
that mimicked Elon Musk's tweets, that Elon Musk was injecting
(09:23):
inappropriate content into the workplace that contributed to a hostile
work environment, and that rather than addressing these issues, rather
than punishing people for actual misconduct, Elon Musk and other
executives punished the people who spoke up about it that
because these eight people and others were involved in an
(09:47):
open letter urging the company to hold everybody accountable, including
to what SpaceX calls its no Apple policy, SpaceX responded
with firings. These eight employed poes brought these allegations to
the US labor board, the National Labor Relations Board known
as the NLRB, which issued a complaint in January, and
(10:09):
after SpaceX responded to that NLRB case by suing the NARB,
saying that the NLRB is unconstitutional and any trial it
would have under its existing structure would be illegitimate and
unfair to SpaceX. These workers also brought claims in California
(10:30):
State court saying that a company has been violating California
law about sexual harassment and whistleblower retaliation. So that brings
us to three cases.
Speaker 4 (10:42):
It's a big step to say, hey, we're going to
write an open letter addressed to the CEO and the
rest of the management and effectively challenge them. What led
them to do that?
Speaker 6 (10:55):
Yeah, The way it was described to us is that
it was building for some time. In the article we
talk about, you know, the underlying culture of SpaceX, which
Josh had touched on, but yeah, it was.
Speaker 1 (11:07):
You know, it's an open secret.
Speaker 6 (11:08):
I wouldn't even say it's a secret, but you know,
SpaceX has a really strong burnout culture. They hire twenty
somethings out of college and they they purposely kind of
put them through the ringer, make them work long hours.
And the way that is often described to us is
kind of mimicking Elon because you know, he's been very
open about how much he values work, sleeping in his office,
(11:29):
you know, staying late to meet really hard deadlines. So
there's a lot of stuff that trickles down from the
top that kind of permeates SpaceX. And so some of
that also had to do with his crash jokes and
kind of the casual sexism that he displays in his
online persona. They were seeing that, you know, at work
as well. One of the things that they like to
(11:50):
point out to is his joke about university and how
people were making jokes about that particular tweet that he
made and it's technically Texas Institute of Technology and Science,
and he had made a follow up joke about you know,
where d's get degrees, and so, you know, at.
Speaker 1 (12:09):
Work, a few folks had heard jokes.
Speaker 6 (12:12):
Being made about university and who might be able to attend,
and so it was just kind of those things would
seep through into the culture. But then there were a
few inciting incidents that really led up to this.
Speaker 1 (12:23):
The first big.
Speaker 6 (12:24):
One was a former employee by the name of Ashley
Cosack had written an essay for the publication Lioness about
her experience with sexual harassment at SpaceX. And then probably
the biggest moment that really made them turn a corner
was a Business Insider article that came out alleging SpaceX
(12:46):
had paid a flight attendant two hundred and fifty thousand
dollars to keep quiet about harassment that she had experienced
by Elon Musk. And so so all those things led
up to it, but we really put that over the
edge was Gwinn shot Well, the president of SpaceX, response
to that article, basically defending Elon, saying, Oh, I don't
(13:07):
believe these allegations. I've known Elon. He couldn't possibly have
done this. You know, he's this is not the man
I know him to be. And so that response from
Gwinn was really when most of the people involved with
the letter realized, Okay, this you know, change isn't going
to come from the top. This is something that we
have to do ourselves, and so that ultimately inspired them
to take collective action together.
Speaker 4 (13:29):
Gwinn was seen by many as the adult in the
room and the person who sort of helped keep SpaceX
on task and cloud through some of the distractions created
by Elon.
Speaker 6 (13:42):
Yeah, and if you think, if you read and listen
to all of the commentary that is out there about SpaceX,
you know, so much emphasis is placed on the fact
that Gwen is the one in charge.
Speaker 1 (13:54):
You know.
Speaker 6 (13:54):
We referenced an interview with NASA administrator Bill Nelson, who
is frequently asked about Elon's behavior because SpaceX is such
a big partner with NASA, and time and time again,
he constantly points to the fact that the best thing
that Elon did was he put Gwen shot Well in charge,
and so therefore he has full confidence in SpaceX to
(14:16):
do the things that they say they're going to do
and operate professionally because of Gwen, you know, she is
often lauded as the adult in the room, but there
are times when she does essentially, you know, do what
Elon wants for the company. And because he is ultimately
the top of the company.
Speaker 4 (14:33):
Okay, so Josh In mid twenty twenty two, this letter
is written and circulated. How many fellow SpaceX employees ultimately
wind up signing this letter?
Speaker 3 (14:45):
More than four hundred SpaceX employees had signed on to
the letter when it was posted on an internal server
before it was taken down.
Speaker 6 (14:53):
And something important to note David too, is that the
letter wasn't available for signing for very.
Speaker 4 (14:59):
Long, Like how long? How long was it up before
it got pulled down?
Speaker 6 (15:03):
I believe it was roughly a day and a half less,
you know, it wasn't very long that people had the
opportunity to actually sign on to it. So that's four
hundred people before it was ultimately taken down.
Speaker 3 (15:15):
One of the things that stood out about this letter,
while it does call out Elon Musk, is it goes
to lengths to cite the company's own values, to emphasize
pride in the company, how much the company has accomplished
in other areas, and couldn't it similarly be more ambitious
about diversity and equity and inclusion. We report in the
(15:38):
story there had been discussion about doing something like a walkout,
as had happened at Google, and the authors decided instead
to go with something that felt more like a conversation
among family. They said there was a sense of trying
to speak in away the company could hear.
Speaker 4 (15:54):
Right if that was the hope, though, the response they
get in addition to their to their firing, the firing
of these people is in the aftermath. As one Musk
loyalist in the company puts it, Lauren is SpaceX is Elon,
and Elon is SpaceX I E. This is who we are.
This is the way we're going to roll, you know,
(16:15):
like it or leave it.
Speaker 6 (16:16):
Yeah, essentially, yeah, it's it's They made it very clear
that the company was not going to you know, extricate
themselves from Elon's personal brand, and that was ultimately where
I think the letter writers really understood that, you know,
(16:37):
if there was going to be any dissent in this workplace,
it was going to be quote unquote canceled, which is
ironic given Elon's penchant for, you know, decrine wokeness and
cancel culture. I feel like there's been multiple times where
Elon has proclaimed, oh, you know, if your employer fires
you for speaking up about certain things, you know, we
(16:59):
will pay well.
Speaker 1 (17:00):
The lawyer Bill. I think I remember him speaking to that.
Speaker 6 (17:03):
Point, and you know, a lot of people kind of
pointed out the hypocrisy there. But that's essentially what happened here, right,
is that a group of his employees were speaking up
about working conditions.
Speaker 1 (17:13):
They happened to target.
Speaker 6 (17:15):
Him specifically when they were doing so, but they were
talking about the company culture as a whole, and how
they wanted to make sure that that no Apple policy
that we've discussed was being applied equally to everyone, because
they were pointing out that, you know, if some of
the people at SpaceX behaved the way that Elon did,
that behavior would certainly not fly at least according to
(17:37):
this so called no Apple policy.
Speaker 4 (17:39):
Okay, so Elon responded initially by by cracking down and
by firing all the people, the rebels who led the
who led the uprising. How else has he responded to
this whole episode, if at all learned?
Speaker 6 (17:58):
Oh, there have been various jokes on Twitter, if you
can believe it, But yes, people have tweeted memes about
the fired letter writers, and he's responded to them with
laughing emojis and things like that. So basically treating the
entire thing as a joke, and the common refrain online
is you know, oh, if you're going to speak up
(18:19):
about your employer, how can you be shocked that you
would get fired? And he's kind of fed into that
narrative as well with his tweets and responses.
Speaker 4 (18:27):
Now, Josh, the firings themselves, they came pretty quickly in
the aftermath of the letter and were pretty ruthless tell
us a bit about how they went down.
Speaker 3 (18:36):
So by the day after the letter was posted, several
of the key people involved had been fired. One told
us he knew he was in trouble when he got
called into the conference room with the frosted windows when
shot well, Tella chastised the workers via a laptop that
(18:56):
was pointed away from the person being fired in each
case and accused them of distracting the company. One of
them was walked out so quickly that the vice president
for HR after doing so, had to call him and
ask him to come back and get his last paycheck,
and Gwen emailed the whole staff, telling them that there
(19:21):
was no need for this sort of what she called
overreaching activism and that people involved had been terminated.
Speaker 4 (19:33):
Now Lauren, one of those terminated is a woman by
the name of Paige holl And teal and tell us
a little bit about her.
Speaker 6 (19:40):
Yeah, she was really kind of the forcing function for
this entire thing. She was the one that created the
group chat that ultimately led to the collective writing of
the letter, and she's been probably the most vocal throughout
this whole experience. But she goes into detail about the
(20:00):
experiences that she had at SpaceX leading up to this.
You know, she talks about the fact that she felt
like she was her voice wasn't heard, that she was
left out a lot of decisions that she felt like
she should have been a part of that She would
have ideas that people wouldn't take seriously, but then when
her male colleagues would present them, then they would suddenly
(20:20):
be taken seriously. She also, you know, experienced this casual
sexism that we talked about, where people were making really
inappropriate jokes. At one point, she talked about how she
was actually going to go to a manager and talked
to him about you know, sexism that she had overheard
and inappropriate behavior that she'd overheard, and as she was
talking to him, he cracked a joke. So, you know,
(20:44):
she had started to experience this behavior for a while
leading up to this, trying to justify whether or not
it was right. You know, one thing she talked about
was feeling trapped because you know, as Josh mentioned, you
know a lot of these people came on in spite
of but they ultimately came on, you know, thinking that
they were going to be changing the world.
Speaker 1 (21:05):
They definitely felt that.
Speaker 6 (21:07):
The entire goal and conceit of SpaceX was what they
ultimately wanted to sign on for, you know, making humans multiplanetary,
you know, helping Earth by sending people to space, sending
satellites to space. That was kind of the thesis that
they agreed to, agreed to sign onto when they came
onto the company. And so for a lot of them,
(21:29):
you know, they felt like they couldn't go anywhere else,
including Paige, because this was the only place that was
doing the meaningful kind of space work that they wanted
to do.
Speaker 4 (21:38):
Now, Josh, what does Page and the others, what exactly
do they want from this lawsuit? Do they want to
return to SpaceX?
Speaker 3 (21:47):
So in the case that the workers brought to the
National Labor Relations Board the n LRB, the government, were
it to succeed, could force SpaceX to offer for reinstatement
to those workers. In the lawsuit that these workers filed
in California State Court, along with damages, they are seeking
(22:09):
an injunction to force the company to change the conditions
that they say created this hostile work environment.
Speaker 4 (22:16):
It is our understanding, Lauren, though, that those conditions described
then largely still exist at SpaceX today.
Speaker 1 (22:26):
Yes, and no. I think multiple things can be true.
Speaker 6 (22:28):
I think there are probably some people at SpaceX who
experience a great working and you know, they don't have
any problems. One thing that we know about spaces is
it's predominantly male, and so I think there are probably
plenty of people who have great experiences at the company.
Speaker 1 (22:45):
However, I think probably there are quite a.
Speaker 6 (22:48):
Few people who also experience the same thing that these
letter writers are voicing, you know, opposition to I think
what has been very clear is since this letter was written,
is that people are definitely not coming forward about any
grievances they have with the company anytime soon, at least
in a public.
Speaker 1 (23:08):
Way like this.
Speaker 6 (23:10):
You know, the sources that I speak to within the company,
they just say that, you know, their ambition is just
to work. They just want to focus on the job.
They just want to put their heads down and not
think about what Elon is doing.
Speaker 1 (23:24):
What he's saying.
Speaker 4 (23:25):
Now, I want to talk for a second a bit
about the National Labor Relations Board Josh, which is where
this lawsuit, the main suit, was filed. In the story,
you guys write that it too, in the process of
this suit being filed, there has come under pressure of
its own and that Musk to a certain degree, has
(23:47):
the group on the retreat.
Speaker 3 (23:49):
Explain, the NLRB is small agency that is tasked with
making it so that you can collectively complain about your
boss or about the conditions on your job without losing
your job over it. And Elon Musk now has this
agency on the defense because after the NLRB brought its
(24:14):
case against SpaceX, the next day, SpaceX brought a lawsuit
arguing that the NLRB is unconstitutional, that its structure violates
the tenets of the Constitution. And as usual, Elon Musk
brought this case to Texas to the Fifth Circuit Court
(24:37):
of Appeals, which has become in a way, his legal
safe space. It has repeatedly taken up and considered overturning
or overturned rulings against Elon's companies, and after some initial
traction for the NLRB and the workers and trying to
(24:57):
get the lawsuit from SpaceX shipped off to California to
a friendlier set of judges, Elon Musk is now winning
because a panel of Fifth Circuit judges agreed to an
injunction putting the NLRB's case on pause, and the NLRB,
(25:19):
in an effort to disgorge this case from the Fifth Circuit,
has now volunteered the idea of indefinitely pausing its case
against SpaceX while Elon Musk and SpaceX's lawsuit against the
NLRB proceeds. And the lawsuit that SpaceX has brought does
(25:41):
not just potentially affect SpaceX workers.
Speaker 4 (25:44):
It would affect right every similar case presumably across all
industries would now I guess this would serve as something
of a precedent for them. So in other words, the
NLRB is saying, Okay, we're going to drop our not
drop our case, but we're just going to hang out
until essentially another court decides if we're a legal constitutional body.
(26:08):
So it sounds like the stakes are pretty high here, Josh.
Speaker 3 (26:11):
The stakes are high here with the trumpified judiciary, we
could see any number of outcomes, including changing the structure
of the agency so that the next president, say Donald Trump,
could fire all of the NLRB's judges who consider cases
like this and replace them, could fire all the members
(26:34):
of the NLRB who consider appeals of those rulings and
replace them. There could be hundreds of cases forcibly rewound
back to before an agency judge considered them, and there
is now fear from advocates and including from workers we
(26:55):
talked to that the consequence of their effort to stand
up to the company could be an opportunity for the
judiciary to take a bite out of the agency that's
supposed to protect this kind of activism.
Speaker 4 (27:09):
I suppose the other large institution that would or could
potentially serve as a check on SpaceX and its culture
and behavior is NASA. NASA, which of course hands out
any number of large contracts to SpaceX. Is what is
nasau stance on the topic.
Speaker 6 (27:28):
NASA does not want to talk about it. It's ultimately
their stance about it. Over the last two decades, SpaceX
has become indispensable to the federal government in terms of
our space program's needs, that ranges from launching the Space
Force's most sensitive national security satellites, and it also extends
(27:48):
to launching humans to the International Space Station. So both
NASA and the Space Force greatly rely on SpaceX so
basically prop up our space.
Speaker 1 (27:57):
Program at the moment.
Speaker 6 (27:59):
And at the same time, Elon's behavior has also become
more and more public and you know, more and more
crass in the public sphere, and you know, we continue
to ask NASA and the Space Force, you know, if
they condone this behavior. Very famously, when Elon Musk smoked
pot on Joe Rogan's podcast, NASA conducted an audit of
(28:21):
SpaceX's safety culture, but they ultimately determined that, you know,
SpaceX was above board and everything was fine. There have
been efforts to foia that audit and they have come
back completely redacted.
Speaker 1 (28:35):
But basically that's all we have really to go on
at the moment.
Speaker 6 (28:39):
And one thing that I also want to point out is,
you know, NASA has really struggled in recent years to
pull off some of its big ambitious programs. Has had
a flat budget adjusted for inflation for the past few decades,
and SpaceX has really come in and enabled them to
pull off the these big exploration programs that they have been
(29:02):
eyeing for supposedly cheaper costs and on a quicker timeline,
And I think there is kind of reluctance to disturb
that status quo Elon being a part of that, because
it has been kind of this magical company that has
come in and really allowed them to do bold and
(29:24):
ambitious things, and so I think they just don't want
to rock that boat.
Speaker 4 (29:29):
Josh Lauren, thank you very much for bringing us this
story and for joining us.
Speaker 3 (29:33):
Thank you, thank you so much.
Speaker 4 (29:38):
So Max and Dana are back with us. Oh you listeners,
You're so lucky, And we're going to talk some more
about that blistering rally in Tesla stock Max, as I
look at my screen here, it is now up for
the year, and it also looks like some big hedge
funds bet against it at the worst possible time.
Speaker 2 (29:59):
Yeah, we've been talking about this for you know, a
few weeks now, but Elon Musk has had a few wins.
I mean, you know, this pay vote was certainly an
endorsement of his leadership at a time when there were
lots of questions passing easily.
Speaker 4 (30:14):
Even if it doesn't actually leaven if it.
Speaker 2 (30:16):
Doesn't actually lead to anything, does does kind of reaffirm
that that he's he's there, he's not leaving.
Speaker 4 (30:21):
You know that investors like that.
Speaker 2 (30:23):
You also had what really did not seem like a
great quarter, but that investors have managed to decide was
a great quarter because it narrowly beat expectations. I think, really,
what's going on for sales, Yes, I think what's really
going on is there's just it's like a ViBe's thing.
People are are feeling like the vibe has turned and
(30:44):
we have this big Robotaxi unveiling coming up, and everyone
has decided that like that's gonna be the thing that
fixes all the problems that we've been talking about. And
of course there's a very good case to take the
other side of that bet to to say, look like
not much has changed with the fundamentals as business.
Speaker 4 (31:03):
This Robotaxi thing.
Speaker 2 (31:04):
There's no quest there's no reason to think it's gonna,
you know, happen anytime soon. And I think that explains
why you have a lot of people shorting the stock.
But the really exciting thing about this, David, is that
this means that Elon Musk loves to stick it to
the shorts, So maybe we'll get some short shorts, some
new Tesla merch.
Speaker 4 (31:22):
Yeah, I mean, Dan right, if you're ever gonna roll
the short shorts back out, and they are shorts that
Tesla had created and I believe was briefly selling to
pet and they were.
Speaker 5 (31:32):
Like red and silk. Could I think, David, I mean,
I think if I'm recalling correctly, Elon Musk like mailed
them or something like.
Speaker 4 (31:40):
You said, so, David Einhorn, who who was a big
you know, short for a long time. I suppose now
if they do crank him out again and again, part
of my thinking is Max right, if it's being so
darn hot out right now, if you're ever gonna reintroduce
some relaunch him, now's the time. I feel like he
should send some to Gates, even if Gates still isn't
(32:02):
shorting the stock, right, you know.
Speaker 2 (32:03):
It's almost worth with this with the temperatures, it's almost
worth shorting the stock just to get.
Speaker 5 (32:09):
I think they should be like black cyber cab or
cargo shorts, you know, like that's how they could maybe
market them. It could be like a robotex carbon short.
Speaker 4 (32:19):
The problem is with black in the summer it's hot,
so the stock is up. Temperatures are up, the short
shorts are coming back, and Musk is happy.
Speaker 2 (32:28):
I just want to say the stock is up on
the year if you back up, if you turn the
clock back two years to you know, November twenty one,
when the stock hit an all time high. It's still
way down from there, I think nearly forty percent. And
as Escha Day has mentioned on this podcast several times now,
it is a stock that swing swings around like there
(32:50):
are these big ups, big downs, Like I think you
don't want to read in too much to anything, especially
until we see you know what exactly happens at this Robotech.
Speaker 4 (32:59):
Yeah, Dan, it's all signs point to the great Robotaxi launch.
Speaker 5 (33:04):
Yes, but just to be clear, before the Robotaxi, we
have earnings Tuesday, July twenty third. And the reason why
the stock is up in part is because Tesla cleared
out a lot of inventory that was like an overhang
in Q one, so that's going to help them with
their margins. They're all excited about the Mega pack. Listeners,
we will do a Megapack special episode at some point.
Speaker 4 (33:25):
The two hours all about the Mega Pack.
Speaker 5 (33:28):
So the stock is up because the you know, the
earnings should be better because they they got rid of
all this inventory. So that's that's a big part of
it too.
Speaker 4 (33:35):
But this is why it's very very important to have
you on the show because you keep us the task here.
Speaker 5 (33:40):
Don't let your ROBOTAXI enthusiasm.
Speaker 2 (33:45):
Do you really think though, that the dan you really
think the stock is getting run up like this because
of you know, inventories being I'm not sure I have
confidence that, like the market is as rational as that.
Speaker 3 (33:57):
What I'm just.
Speaker 5 (33:57):
Saying is, like, from a fundamental perspective, Q one was
a really lousy quarter because they they made more cars
than they could sell. In Q two, they sold more
cars than they made So all of these like old
model threes and model wise that were like sitting around
in parking lots, and the parking lot truthers were out
talking about this inventory build out that built that inventory
(34:18):
has now been cleared and that really helps Tesla because
Tesla does not have dealers. They sell cars directly to
their consumers, so then when they have a lot of
inventory sitting around that is just like a dead weight
on their balance sheets. So the fact that they managed
to clear this inventory helps them. Is that why the
stock is gone berserk? No, I mean the stock is
going doing what it's doing because everyone's excited to hear
(34:40):
about the.
Speaker 4 (34:40):
Rover, about the Robotaxi, and and it's a moment. It's
a huge momentum for.
Speaker 2 (34:44):
People are so excited they're just they're spinning up these
like crazy. I don't know if you all saw that
the big rumor among the Tesla enthusiasts was that he
had secretly hired Elon said, this is not true, that
he had secretly hired Uber founder Travis Kalanik to lead
the Robotaxi efforts to bring being the band of kind
of like slightly canceled figures together to usher us into
(35:06):
the new AI era. I'm sad it's not true, because
it would be fun to see Elon and Travis, those
are two very strong personalities come together.
Speaker 4 (35:14):
All right, Absolutely, all should be revealed in one month.
And yeah, and we'll watch the stock in the meantime.
Max Dana, thanks as always, pleasure to be here at Gridgebier.
This episode was produced by Stacey Wong, Naomi Shaven and
(35:36):
Rayan Harmancia are senior editors. The idea for This very
show also came from Rayhon Blake Maples handles engineering, and
we get special editing assistants from Jeff Grocott, Antonio Muffarech
and Ourfat jalas show Perry. Our supervising producer is Magnus Hendrickson.
The Elon Inc. Theme is written and performed by Taka
Yasuzau and Alex sugi Era. Brendon Francis new them as
(36:00):
our executive producer, and Sage Bauman is the head of
Bloomberg Podcasts. A big thanks to our supporter Joel Weber.
I'm David Papadopolis. If you have a minute, rate and
review our show, it'll help other listeners find us. See
you next week.
Host
David Papadopoulos
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