
$50M worth of Tesla equipment sits unused in a Wheatfield warehouse - Vervious
https://www.wgrz.com/article/news/local/inside-tesla-a-look-at-the-many-crates-of-equipment-delivered-to-the-south-buffalo-factory/71-341f2220-f2a6-4832-85a4-7c7a79171d89
======
pbreit
As usual, Tesla's involvement in the original deal is reported incorrectly.
Tesla had no involvement in the original deal. Nor did Solar City. In fact,
Silevo did the deal, was then acquired by Solar City which was then acquired
by Tesla.

~~~
jlmorton
Well, let's be clear about the timeline. Silevo was planning a factory in
upstate New York, and the State of New York was planning to invest $225
million in that project.

In June 2014, SolarCity agreed to acquire Silevo.

Three months later, with Elon Musk's personal involvement, the Cuomo
Administration agreed to increase their investment to $750 million, in a much-
expanded deal.

Construction of the factory began under SolarCity ownership in September 2014.

Tesla acquired SolarCity in November 2016. One month later, Tesla announced
that Panasonic would assemble the solar modules at Gigafactory 2/New York.

~~~
NotSammyHagar
Interesting info. If they got 750 million statewide investment, the factory
used $700 million of it then? 50 mil left over? I hate state investments in
businesses via direct or tax cuts. But this couldn't be worse than Washington
state's massive tax cuts for boeing, which proceeded to move more production
and jobs to their east coast factory right after they got the tax brake.

~~~
at-fates-hands
> But this couldn't be worse than Washington state's massive tax cuts for
> boeing,

I see your Boeing deal and raise you one Wisconsin deal with Foxconn that will
cost the state $4.5 billion and thousands of jobs that most likely never
existed.

~~~
onlyrealcuzzo
Is there a worse tax deal a state has ever made? Anyone?

------
mft_
I'm slightly confused; is the story that the state of New York bought
equipment for Tesla worth $300 million dollars, and a sixth of it is currently
unused (meaning five sixths of it _is_ being used currently)?

~~~
rjdagost
The history of the Buffalo "gigafactory" is rather sordid... In a nutshell,
Tesla and its subsidiaries made large employment and economic growth promises
to the state of NY in exchange for massive subsidies (almost $1B total). The
state wanted to stimulate growth in an economically depressed region, but
those growth expectations have not materialized at all. And now, at least some
of the NY state taxpayer financed equipment is apparently being shipped
elsewhere or sold instead of helping the economy of Western NY. That's the
story here. But the entire story goes much deeper.

Tesla fans don't like to admit it, but the Buffalo "gigafactory" project has
been a textbook example of government waste on corporate welfare. Multiple
people have gone to jail for corruption / bid rigging on the project. Tesla's
subsidies were supposed to be contingent on achieving hiring and economic
output goals, but those original requirements have been retroactively watered
down multiple times so as to prevent subsidy clawbacks. A local journalist
(Dan Telvock) has been detailing considerably more chicanery that has gone
done at the Buffalo gigafactory.

~~~
Robotbeat
This is just not accurate. The Buffalo plant economic stimulus package had a
clawback provision if Tesla doesn't meet employment milestones. They have been
meeting those milestones and so will not have to pay the fee:
[https://buffalonews.com/2020/02/13/tesla-looks-like-a-
good-b...](https://buffalonews.com/2020/02/13/tesla-looks-like-a-good-bet-to-
hit-its-april-job-target/)

I know people want to make this into some corruption scandal (blaming it
either on the state or on Tesla or both), but the state did their job by
putting these employment requirements in their contract WITH PENALTY, and
Tesla is doing their job by hiring enough people to avoid the penalty.

What's really the problem, here? 5/6ths utilization of capital equipment seems
pretty good, particularly in a fast evolving field like solar power (where
things like bifacial panels and Tesla's integrated solar roof weren't really a
thing when the deal was first signed).

~~~
rjdagost
You're trying to act like everything is A-OK with this project, when it has in
reality been a huge waste of public money. First, there has already been a
large corruption scandal centered on this project, with people in prison
because of associated corruption (search Alain Kaloyeros). Second, those Tesla
employment requirement milestones have been repeatedly reduced to require
fewer jobs, and the types of required jobs has also been watered down. The
requirements in the original agreement are more stringent than the 1460 jobs
required now.

The state of NY just wrote off 92% of the value of its $957M investment in the
factory: [https://buffalonews.com/2019/11/08/pennies-on-the-dollar-
the...](https://buffalonews.com/2019/11/08/pennies-on-the-dollar-the-tesla-
plant-isnt-worth-nearly-what-the-state-paid-to-build-it/) Does that sound like
Tesla is operating at 5/6 utilization of capital equipment?

Panasonic just announced that they're pulling out of the Buffalo factory:
[https://www.eveningtribune.com/news/20200227/after-
nys-750m-...](https://www.eveningtribune.com/news/20200227/after-
nys-750m-investment-panasonic-leaving-buffalo-solar-plant-but-tesla-still-
building) Tesla just wasn't giving them the business that they were promised
in 2016 when they joined the project.

I had high hopes for this project when it was announced. It is near my
hometown, and I thought it might be a good boost for the local economy. All it
seems to have been is a big siphon from public funds, but not a siphon to
where it is needed.

~~~
Jonanin
None of what you've said above justifies your completely misrepresenting the
deal as having economic output goals that were watered down, and the parent
corrected you on it. It's fine to not like the project, but let's not pretend
that spreading misinformation about it is helping anyone.

------
close04
I'm being greeted by an _Access Denied You don 't have permission to access
"[URL]" on this server._

Edit. Maybe a GDPR type issue.

~~~
jimbob45
Worked fine for me at the following:

[https://www.wgrz.com/article/news/local/inside-tesla-a-
look-...](https://www.wgrz.com/article/news/local/inside-tesla-a-look-at-the-
many-crates-of-equipment-delivered-to-the-south-buffalo-
factory/71-341f2220-f2a6-4832-85a4-7c7a79171d89)

Edit: I now realize that the parent poster may have posted a malicious link. I
feel like a fool.

~~~
retSava
For me, neither the OP link nor the one you gave works.

------
GiorgioG
More incentive money pissed away. Your hard earned tax dollars at work.
There's a lot of things I miss about Buffalo since moving south, but this
isn't one of them.

------
ricardobeat
This website responds with a plain 403 'Access Denied' for european users.

~~~
anonsivalley652
I guess it's American-made propaganda with export controls because it's
considered "munitions."

Try this instead: [https://outline.com/BdaeZq](https://outline.com/BdaeZq)

~~~
jfengel
I suspect it's more likely overzealous GDPR paranoia. Not that that's any
better.

~~~
ng12
Or more likely a simple cost-benefit analysis.

~~~
jfengel
What provides the cost of allowing Europeans to see it? The server costs?

~~~
ng12
At the minimum a lawyer and a technical audit. GDPR compliance is not free and
for a local news station in Buffalo it's probably just not worth it.

~~~
jfengel
Ah, I see, you were disagreeing with the "overzealous/paranoid" part rather
than the "GDPR" part. I get it now. Thank you.

------
deckar01
Here is a recent article about the project with a little more detail about the
deal that was made between NY and Tesla.

[https://www.cnet.com/roadshow/news/tesla-
gigafactory-2-new-y...](https://www.cnet.com/roadshow/news/tesla-
gigafactory-2-new-york-write-down-value/)

------
searine
This seems like kind of a 'gotcha' article.

"One out of every $6 spent on machinery for the Tesla factory is now unused."

I'd imagine most healthy large companies operate this way. Utilizing the
majority of their equipment and having some reserve capacity in parts and
equipment stored.

~~~
wpietri
You imagine healthy companies just having 17% of total investment sitting
around in warehouses because they might need it someday? I encourage you to
read up on Lean Manufacturing and just-in-time delivery, which swept the US in
the 1980s. Even to an MBA, over-ordering gear by $50 million is pretty obvious
waste.

~~~
searine
>You imagine healthy companies just having 17% of total investment

I imagine healthy companies keep enough manufacturing parts to be able to
repair/replace/scale as needed. Particularly a company like tesla which is
well known for scaling rapidly.

> I encourage you to read up on Lean Manufacturing and just-in-time delivery,
> which swept the US in the 1980s.

These are only efficient when you are pushing all your externalities on the
other guy. Tesla doesn't globalize their supply chain nearly as much as other
manufacturers, which would explain the stock of machinery.

~~~
wpietri
Your first bit is just tautological. Yes, healthy companies are healthy. The
questionable part is your notion that 17% of investment is healthy.

As to the bit about Lean Manufacturing, you're just wrong. Toyota in
particular is known for close relationships with suppliers where they are well
supported and trained in Lean approaches as well.

------
ErikAugust
Wait until they hear about the hundreds of billions of dollars worth of all
sorts of stuff sitting idle that has been purchased by the DoD and USG paid
for by tax money.

~~~
tomatotomato37
Reminds me how the US continually produces tanks despite the armies
recommendations, to the point where we have enough tanks to essentially fight
WW3 with purely tanks and still have some left over, just so some congressmen
can keep jobs in their constituency.

At least that was the situation in the 2000s, no idea if that wackiness is
still continuing

~~~
qubex
The production of armaments is a bit of an economic anomaly, to be honest. All
businesses, including arms manufacturers, require a constant flow of business
in order to cover their fixed costs and remunerate their investors (debt
holders and shareholders). If governments only order weapons when they need
them to fight a war, then the arms manufacturers would shut form at the end of
a conflict and would take ages to “gear up” again when a new conflict arises,
stymying response and lessening the deterrence implicit in having a standing
army. Consequentially, it actually makes sense (from a strategic point of
view) to keep weapons manufacturers “ticking over” with a constant flow of
orders even if that just results in growing stockpiles. One of the reasons
that profits are di high for weapons manufacturers is that according to the
Capital Asset Pricing Model (CAPM) the rush of a government suddenly cutting
off orders during peacetime and rendering the company unprofitable and
probably bankrupt needs to be offset by high dividends in the here-and-now and
with low historic volatility.

Now, I’m not saying I support this, far from it, but that’s (one of) the
rationale(s).

~~~
tomatotomato37
It seems like it would be a better use of resources to just build up enough of
a stockpile that the industry would be able to safely retool into a similar
civilian industry, such as railroad locomotives, and then have time to switch
back without a loss of combat capability. You'd just have to keep a small
industry around for upgrades and maintenance.

~~~
nradov
That is unfortunately no longer realistic. The skills and supply chains needed
to produce high-end military equipment are too different. The production lines
have to be kept continuously running or else they would take so long to
reestablish that in any serious conflict it would be too late.

~~~
Robotbeat
The problem isn't that the skills and supply chains are fundamentally
different but that supply chains for non-military equipment become globalized
if not outright off-shored (often to geopolitical rivals) and therefore cannot
be counted on in case of a major geopolitical conflict.

Pre-massive-globalization, we had no problem gearing up for WW2. Our
industrial capacity was largely in-house. There were some things like rubber
that were off-shore, but generally the industrial toolchain was domestically
produced.

Nowadays, many domestic industrial producers rely heavily on these (bloated)
military contracts to maintain relevance in a globalized industrial setting
where the center of gravity for a lot of heavy industry and tool production
has shifted to Asia.

I love international trade and I'm skeptical of military spending (and even
more so of military adventurism), but this effect should be kept in mind when
making trade policy. The military-industrial complex is keeping alive much of
our industrial know-how that would otherwise be entirely be off-shored and
retired domestically.

~~~
nradov
The skills and supply chains are just fundamentally different in crucial
areas. A prime example is the specialized techniques for welding together
thick hull sections of specialized steel alloys to build a complete submarine.
There's no equivalent in civilian industry. If that production capability is
ever lost due to a long gap in new submarine orders then it would take many
years to reestablish. Institutional knowledge if a fragile thing.

------
jlv2
Archived link: [http://archive.is/ny5TX](http://archive.is/ny5TX)

------
anonsivalley652
I don't particularly care about what Tesla, SolarCity or Silevo does or
doesn't do. What is concerning is handing over hundreds of millions in
socialist corporate welfare that goes to waste, when that money could've
helped the homeless and desperately poor who get austerity instead.

------
JackFr
Good job chasing Amazon out of NYC though!

------
3fe9a03ccd14ca5
> _State government documents put the final price tag at $958,600,000 for the
> property, building construction and equipment. The cost for the equipment
> alone is close to $300 million._

What a staggering number. How does our government get away with wasting so
much money without any accountability?

~~~
skrtskrt
They count on a few things:

* you don't hear about all the millions of times this happens

* You will still hear about thousands of times that it happens, and it happens so often you feel that can't possibly fight it all

* you don't have alternative options to vote for

* any alternative option is crushed with voter suppression and/or the massive campaign chests of the incumbents

~~~
briandear
> any alternative option is crushed with voter suppression

With early voting, free or very cheap ID for poor people, mail in ballots, and
literally a year or more to confirm one’s voter registration, voter
suppression is a ridiculous excuse. If people cared about voting, they would
do it. I honestly don’t want people voting that can’t be bothered to take the
responsibility seriously enough that they allow themselves to be “suppressed.”
More voters isn’t the answer: more voters that care about fiscal
responsibility is the answer. Many voters don’t care one bit about waste
because those voters aren’t paying very much in the taxes that are getting
wasted. They want “someone else” to pay. Many voters vote for the “stuff” they
can get for themselves.

~~~
skrtskrt
People waited in line for 3, 4, even 7 hours in black/Latino neighborhoods and
on college campuses in Texas and California last night.

They close voting sites in these places, sometimes the day of the election:

[https://www.theguardian.com/us-news/2020/mar/02/texas-
pollin...](https://www.theguardian.com/us-news/2020/mar/02/texas-polling-
sites-closures-voting)

They come up with convoluted ID requirements that only apply to college
students, requiring types of ID their colleges don't even issue for them:

[https://www.nytimes.com/2019/10/24/us/voting-college-
suppres...](https://www.nytimes.com/2019/10/24/us/voting-college-
suppression.html)

That doesn't happen in rich white neighborhoods. It's nothing if not voter
suppression.

That's not even to bring up gerrymandering. I mean look at these voting
districts that have been drawn:

* [https://www.reddit.com/r/VoteBlue/comments/bd77pf/dan_crensh...](https://www.reddit.com/r/VoteBlue/comments/bd77pf/dan_crenshaws_district_in_texas_this_kind_of/)

* [https://www.ranker.com/list/most-gerrymandered-districts-in-...](https://www.ranker.com/list/most-gerrymandered-districts-in-america/eric-vega)

~~~
wilg
Totally agree we need to fix these issues with lines and ID requirements. But
Texas and California are very different.

California has mail-in so I do think something is going on where people don't
know about the vote by mail. You can even just get your ballot by mail and
drop it off at a polling place or mailbox day of if you want to decide late.

And gerrymandering is definitely a huge issue, but not the whole issue. You
can't gerrymander the Senate, for example, but it is still Republican-
controlled.

It does seem like there are still extreme get-out-the-vote issues beyond the
(totally unacceptable) vote suppression. Turnout is still unbelievably low.

