Driverless Cars

Boeing 737 MAX-8 – question the pilots not the plane

There is something to be said about the group think behind countries stepping up to ground the 737 MAX-8. Of course safety is of maximum importance. It always is. However had the FAA held the slightest inkling that switching off the Boeing 737 AOA would still cause crashes it would be grounded immediately. The FAA is comfortable that airlines that follow the updated airworthiness directive (AD) will not experience danger. So confident in that decision the AD called for a continuation.

If anything blanket groundings are more a slap in the face of pilots in questioning their skill to fly these planes without all of the gizmos. As a passenger you should question the airlines that ground as a reflection on the level of pilot training and confidence in them during a crisis situation.

It’s a bit like having your parking camera and sensors go on the blink. Is reversing into the car space with your left arm on the passenger seat looking over your shoulder impossible without these aids? No. Do you stop driving your car because you’re afraid you can’t park it? The problem is all of these aids are to a point dumbing down the ability to drive using feel. Perhaps we should demand The NHTSA grounds Tesla for the spate of autopilot accidents ending in death of drivers.

Would Boeing risk such massive corporate negligence by letting the planes still fly if they had the slightest doubt switching off the AOA would cause more crashes? This is not a Ford Pinto moment. It’s a serious flaw to be sure but the plane has got a clean bill of health without autopilot AOA. That’s why the FAA hasn’t grounded it.

Boeing assures customers it has a software upgrade to be released in coming weeks. There are 4,800 orders outstanding. The new Leap X engines are so much more efficient than the CFM-56 variant they replace. The secret sauce in the engines is made by NGS Advanced Fibers (50% owned by Nippon Carbon) in Japan. Airlines want them. Period. Efficiency helps them stay in business.

The Boeing 737 fleet has done around 1 billion flight hours combined. This is a 50 year old plane which has been modernized. Think of it like a Porsche 911. The basic shape is the same. The plane is airworthy. The software is faulty. As passengers we should pray that the pilots have the skills when the systems fail, not fail when the systems let them down.

Tesla – Musk baits the regulator again?

Anton Wahlman on Seeking Alpha has reported that Tesla held a secret telephone conference call to a limited audience which apparently contradicted statements made earlier in the public domain. If true, from a pure compliance and governance perspective that would violate fair disclosure rules. It is surprising that given Elon Musk’s run ins with the SEC that shareholders would hope he’d look to avoid further investigation rather than taunt the regulator.

According to the call transcript, Tesla provided new profit/loss guidance to the select few on the call. Even more bizarre is that Deutsche Bank compliance apparently let its Tesla analyst publish a report on March 1 based on the contents of the call, including margin guidance on the $35,000 Model 3 which was not divulged to others.

CM has always held that Tesla is an amateur car maker. Luring owners to deposit a non refundable $2,500 for a $35,000 Model 3 smacks of a silent fund raising to keep the ship afloat.

The company recently admitted it would close much of its dealer network and move to mobile servicing. Cute in principal but unlikely to be sustainable. Mainstream makers know that dealer/service networks are vital to keeping customers connected. If large recalls need to be conducted, mobile units aren’t going to cut it.

None of the above really surprises. Owning Tesla is sort of like joining a cult. The preachings from the fearless leader are designed to keep the disciples fiercely loyal. However if the government gets enough evidence to gather the SWAT team it will swarm the compound. This company is not worth anything like $50bn. Grab your popcorn.

If the Green New Deal bans air travel…

…CM looks forward to catching a train to Hawaii.

Alexandria Ocasio-Cortez also intends to get every fossil fueled powered car off the road in a decade. The US has 270 million registered vehicles, the overwhelming majority being petrol powered. The US sells 16-17mn cars a year (sadly slowing). Therefore in the US, 16 years would be required to achieve that target. That’s before taking into account auto maker EV capacity.

Global EV sales were 2.1mn last year. So her plan would take 128 years. That’s unfair as capacity would grow. Let’s assume auto makers could conceivably increase capacity by 2m every 2 years (plants take 2 years to build and those poor Congolese child slave laborers will be run off their feet digging for cobalt to go in the batteries) then conceivably 30mn.cumulative EV units could be built over 10 years. That’s 11% of her goal. Let’s not forget the fossil fuels required to power auto factories to satiate this plan not to mention the steel that goes into the bodies.

Global auto production is c.80mn units. That assumes that the world’s auto makers will snub the ROW to meet her demands.

Socialist mathematics is never quite up to the task. Is Ocasio-Cortez was a true patriot she’d demand GM, Ford & Tesla be the sole products that consumers are allowed to buy to support domestic jobs. They’ll need them because she’ll be causing the lay offs of a shed load of Boeing line workers if planes are banned.

When she finally gets into the Oval Office we should look forward to her catching Ground Force One from 1600 Pennsylvania Avenue Station to travel the country and tell Americans how much better things have become.

Stemming the cycling casualty cycle

A cyclist colleague asked CM to look at the stats behind road fatalities of pedal power in Australia. The stats highlight some of the issues.

On the face of it, the authorities would look to the achievements of a reduction in cyclist fatalities and pat each other on the back. 35 cyclist deaths in 2018 is down on the 2013 peak of 50. On balance cyclists are around 2-4% of total road fatalities. Between 2005 and 2009 cyclist fatalities were 2.3% of total and 2010-2014 that rose to 3.2%. In bike friendly ACT, the figures were 2.5% and 7.4% respectively. Total road fatalities fell from 1,600 to around 1,200 over the same period.

A 2015 BITRE report showed that cyclists were 16% of hospitalizations from traffic accidents. The extent of non-fatal crashes is not reported. Note that “fatalities” are only statistically counted when the death occurs inside 30 days. Die in 30 or more days and the stat is not tallied as a road accident.

In 2005/6, 4,370 cyclists were hospitalized nationwide. In 2011 that rose to 5,393 (+23%).

Speed a factor? 45% of crashes according to BITRE happened sub 50km/h. 42% between 50-60 km/h. Of course cyclists aren’t allowed to use dual carriageway which would skew accidents to urban areas.

Cars are responsible for 96% of casualty crashes involving cyclists. 25% of accidents involving a bike and car happen at intersections. No surprises there.

One can get drowned in the analysis but the question is how do we cut the deaths of cyclists if there is a concerted effort to increase their use?

The ‘Australian National Cycling Strategy 2011-2016’ aimed to double cyclist participation. In 2013, another national survey showed cycling numbers drifted down. So if the plan remains to increase usage, it makes sense to allow more shared off-road infrastructure and or dedicated bike lanes.

The question arises on how to tackle the casualty problem. As a motorcyclist it is not hard to be frustrated to see drivers with mobile phone in hand. Cyclists would concur. Whether texting while driving or failing to note a traffic light has changed to green. It is dangerous and frustrating for other road users. Can a social media reply wait 5 minutes? It is often impulsive to pick up the phone and tap away. The punishment for phone use while behind the wheel remains too soft. If drivers don’t focus 100% on conditions then is it any wonder that accidents occur?

ADAS or advanced driver assistance systems (lane guidance, auto braking or wing mirror warning devices) are helping drivers become more alert but at the same time some are becoming too reliant on these devices being failsafe. How often have we seen Tesla drivers crash when the systems don’t work properly? They’re there as a last resort, not a first. Look at the fools who take videos of their Tesla autopilot in action.

It is not to say that cyclists shouldn’t ride with due caution. There are no stats on rogue bikers chopping up cars. We’ve probably encountered an overzealous bike courier who gives the rest a bad reputation. It is fair for drivers to feel frustrated if a cyclist jams himself at speed into a tight gap. Yet it doesn’t justify some drivers whizzing past cyclists in close proximity through pure frustration. Many videos, including those of the late cycling advocate Cameron Frewer, show how selfish some drivers can behave.

Is lowering speed limits the only answer? Perhaps speedo gazers trying to avoid fines create a dangerous loop. Is there an argument to install mobile speed warnings signs that allow drivers to keep eyes glued to the road rather than the speedo needle? At what cost?

Or is it a case or enforcing all vehicles to install drive recorders? In the US more police are wearing body cams to help prove cases against them for excessive force. It wasn’t long ago that dashcam footage helped jail a motorist for 15 years for deliberately ramming a motorcycle. Drive recorders are cheap. Insurance companies would surely approve. Cyclists would do well to wear cameras too.

It ultimately comes down to mutual understanding. While drivers may limit injury through airbags and seatbelts, bikers don’t have that luxury if hit by negligent drivers.

That is not to make cyclists devoid of responsibility but simply having a “Safe System” approach which is a big picture idea of better roads, better conditions and more active/passive safety systems in cars won’t overcome inattentiveness and those keen to check Twitter while moving.

How many canaries in the coalmine do we need?

SAAR.png

CM has said for ages that President Trump risks being hoisted by his own petard if he continues to attribute the stock market to his leadership. It works both ways. Stock markets are suffering. Suck it up.

GM has announced it is pulling the plug on over 14,000 US workers (8,000 white collar, 3,300 blue-collar workers in Canada and another 2,600 in the US) and potentially closing  5 plants. Is this a surprise? The chart above shows the % year over year change of US car sales. It has been stepping down clearly since GFC. In September this year GM’s sales slumped 19% in before falling 5.5% in October. The brutal storm activity is unlikely to help November either.

This quote will live to haunt in the coming downturn – CEO Mary Barra said the company doesn’t predict an economic downturn any time soon and is making the cuts “to get in front of it while the company is strong and while the economy is strong,

50% of US corporations have a credit rating of BBB or less. We are at the sharp end of massive government sector recapitalization crowding out and companies with dodgy balance sheets (that have levered up to conduct massive buybacks to flatter EPS masking anemic earnings growth) won’t be given the same tight interest rate margin spreads come the next refinancing. Await the implosion.

Rising interest rates don’t help and credit markets wait like vultures over the likes of GE which is having a reality check over its $115bn of debt, negative equity and troubled restructuring. Credit rating downgrade have booted it from some funds so the stock is in the cross hairs. If it had any sense it would file for Chapter 11 to buy breathing space.

If you want to put some perspective on it, GE’s market cap in 2000 was $592bn and now is $65.8bn. Tesla is now worth $56bn.

GM is yet another canary in the coalmine

 

Musk flips the ‘bird’ at the SEC

E1CA948E-BE24-4AD1-8F39-139CB3CD4BBB.jpeg

Tesla shareholders must wish Elon Musk would be as silent as his products. It seems the Tesla CEO has learnt nothing from his $20mn fine. Given that Tesla is still under investigation for other reporting  matters, it seems unprofessional to bait the SEC when shareholders want to see stability at the helm. Musk tweeted,

Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!,”

Just further evidence this CEO has no wish to listen to his board or interact with them in a way that promotes best practice corporate governance. It’s still a one man band. The irony of the tweet is that the SEC’s leniency allowed him to stay at the top causing a 17% jump on the settlement.

Even worse Paragraph 13 of his settlement with the SEC requires him to seek board oversight of any public communications although has yet to be officially signed off by a judge.

In a twist or irony one shareholder tweeted back that he wasn’t just attacking the stock shorters  but the long only owners as well.

Tesla shares closed down 4.4% and indicated at $273 in the after market, a fitter 3% fall. At the start of the SEC decision last week the shares had traded as low as $267. In a sense Musk has been the Shortsellers Enrichment CEO not the SEC.

Musk to recover $1.2bn based on pre-market

EEC104BF-487B-473D-943F-F2E345753322.jpeg

Musk stands to recover $1.25bn in wealth if the pre-market indications of Tesla prove correct. A $20mn fine from the SEC which effectively wiped $1.3bn of wealth will all but be restored. Is it just that investors think that nothing will change even if he isn’t chairman? Did the SEC fold to his star power or did they receive a free flame thrower to lighten the charge? While $20mn looked like a proper slap on the wrist he can shrug off the incident like it didn’t happen. All in all pretty impressive. He lives to fight another day.