The Huffington Post has an interesting story about how “green guru” Elon Musk is getting pummeled online for his increasingly close ties to President Donald Trump.
First, President Trump, whom he opposed during the presidential campaign, named him to his Strategic and Policy Forum and his manufacturing council. Then Musk broke with the environmental community and endorsed Rex Tillerson, the former CEO of Exxon Mobil, for secretary of state. Progressives were incensed by what they viewed as Musk’s betrayal. “What did they promise you in the golden room?” one tweeted to Musk.
Next, Musk defended Trump’s controversial travel ban that targets Muslims, sending out a retweet that said “after reading the language of [Trump’s executive] order, it looks far less bad than portrayed by left.” This prompted an even more intense response from progressives. One group, Americablog, went so far as to create an online petition demanding Musk end his association with Trump. “Enough is enough,” the group declared. “Tell Elon Musk to stop defending Trump’s racism — it’s time to dump Trump.”
So, why has Musk become so close to an administration determined to keep oil king, restore coal to its former glory, withdraw the nation from the Paris Agreement on climate change, and eliminate as many environmental regulations as possible?
Necessity. He runs three debt-ridden, money-losing companies heavily dependent upon the federal government. His business empire and personal fortune are a lot shakier than they look.
After being saved from bankruptcy in 2008 with its first government contract, SpaceX, Musk’s space exploration company, has stayed in business only because it received $6.5 billion worth of contracts from the U.S. military and NASA. Since going public in 2012, SolarCity, Musk’s solar roof installer, has not had one profitable quarter, despite receiving federal tax credits to help reduce the price of solar panels the company installs. In November 2016, SolarCity was so close to bankruptcy Musk was forced to save it by having Tesla purchase the company in a $2.6 billion all-stock deal.
But Tesla, Musk’s electric car manufacturer, has itself faced — and continues to face — serious financial troubles, even though the government has provided tax credits that reduce the effective price of Tesla cars. Since 2010 when the company went public through the third quarter of 2016, Tesla posted a profit in only two quarters…There are other problems too. Besides dealing with chronic unprofitability, Tesla must now assume the liabilities of SolarCity, which had more than $3 billion of debt at the time of Tesla’s bailout and its own negative cash-flow steam.
Read the full story.