Wars of Mass Destruction

People killed:

US war on Iraq: 85,966 – 93,778 (and counting)

US war on Afghanistan: 50,000+ (no clear number though)

WTC Attack: 2974 + 19 hijackers

Terrorism in India: 70000 (in 2001, and still counting)

-------------------------------------

Vietnam war: 1,100,000

World War I: 40,000,000

World War II: 70,000,000

Mao’s land policies: 800,000


Numbers that make you ponder a lot. A hopefully the world leaders too.

Electric Supercar: Tesla's wild ride

Building the world's first electric supercar was never going to be easy - even without the hubris, infighting, and mismanagement that nearly sent Tesla spinning off the road.

By Michael V. Copeland, senior writer

Last Updated: July 11, 2008: 1:16 PM EDT

(Fortune Magazine) -- For Martin Eberhard, there were many obstacles on the path to building the ultimate electric sports car. There was the scientific challenge of creating a lithium ion battery pack stable enough to power a 2,650-pound vehicle. There was the belief that Americans would stick with their gas-guzzlers, no matter what the price of oil. And there was, of course, the considerable resistance in the venture capital community to funding heavy industry.

But for Eberhard, the ultimate indignity came in early June of this year. Just days before he was finally supposed to take possession of his Tesla Roadster, a gray beauty with orange racing stripes that he had devoted the past five years of his life to building, a technician who had been driving it on the 101 freeway relayed some bad news.

The most advanced car on the planet had rear-ended a truck.

(Interactive)

Instead of sweeping triumphantly into Eberhard's driveway, the Roadster was towed back to Tesla headquarters south of San Francisco where, under the exacting eye of the company's chairman and financial backer, Elon Musk, it would be rehabilitated.

Even with its carbon-fiber front end shattered, the car was something to behold. Eberhard had named the car for Nikola Tesla, an eccentric late-19th- and early-20th-century inventor whose name has become a byword for genius tethered to otherworldly ambition. (His legacy ranges from the AC power systems we still use today to plans for a "death ray" that would help armies fight wars with electricity.)



The Tesla itself - 400 volts of electric potential wrapped in a carbon-fiber body - is as far-out as its namesake, styled like the cars you used to see only in cartoons but charged by a high-powered outlet in your garage. Stomp the accelerator, and thick cables connecting the liquid-cooled lithium ion battery pack to a printed circuit board send all that current into a series of silicon transistors the size of your little fingernail. They are capable of switching as much as 850 amps, which drive the AC motor as high as 14,000 rpm and send the rear-wheel-drive Roadster screeching off the line, with a range of 220 miles on a single charge. Acceleration is so fast (0 to 60 in 3.9 seconds) that you get pushed back in your seat for as long as you dare to keep your foot on the aluminum pedal.

That the Tesla exists at all is a small miracle. For car geeks it has long seemed that electric vehicles are the car of the future - and always will be. First tinkered with in the 1800s, the electric vehicle (or EV) had its fate sealed with the invention by 1900 of the internal-combustion engine, which was cheaper and could travel much farther than any battery-powered model. There was another flurry of EV development during the energy crisis of the 1970s, and again in the early '90s because of a series of regulatory guidelines governing emissions. But by the late '90s, California had defanged the electric-vehicle portion of its zero-emissions mandate and soon after, GM (GM, Fortune 500), Toyota (TM), Honda (HMC), and Ford (F, Fortune 500) all shut down their EV programs. The most dramatic end would come for GM's EV1, when the Detroit automaker famously ripped the cars away from ecstatic owners and sent them to the crusher, as detailed in the film Who Killed the Electric Car?

That backdrop makes the story of the Tesla all the more remarkable. The car was conceived by Eberhard, an engineer, serial entrepreneur, and inventor (his name is on battery-cooling, electric motor, and power electronics patents filed by Tesla Motors). He was convinced that if he could outfit an existing sports car chassis with loads of laptop batteries, it would be feasible to build and he'd find plenty of buyers among the speed-loving, planet-conscious Silicon Valley set and beyond. But given that he had zero experience in the auto world and that gas was at a relatively cheap $1.50 a gallon, Eberhard, 48, couldn't find a VC firm willing to give him enough to build the car. Which is how he came to Elon Musk.

The 37-year-old Musk had co-founded PayPal, was forced out of the online-payment company, but cashed in when it was sold to eBay (EBAY, Fortune 500), giving him more than enough money to launch SpaceX, a private rocket company that aims to start shuttling people to the International Space Station by 2011. Big ideas, in other words, are Musk's specialty. After a two-hour meeting in February 2004, Musk agreed to plow $6.3 million into Tesla. He would become the company's chairman; Eberhard would be CEO.

In one sense, the duo's timing couldn't have been better. Tesla has begun delivering cars just as gas prices and fears about global warming have shot to all-time highs. All those automakers that shelved plans have since restarted them. Nissan (NSANY), Mitsubishi, Daimler, Subaru, and boutique firms like Fisker Automotive are furiously working on new models - some all-electric, others range-extended EVs - but won't get to market till 2009-13. GM's Bob Lutz even credited his company's relaunch to Tesla. "If some Silicon Valley startup can solve this equation," he told Newsweek, "no one is going to tell me anymore that it's unfeasible."

Telsa first customers

But somewhere between the elegant plan and the rear-ender on the 101, things went terribly wrong. Says Eberhard, looking back: "I should have been more careful. I shouldn't have let [Musk] take a disproportionate control of the board." He adds, "I have no issues with Tesla Motors as a company. I do have problems with Elon and the way he treats people." Indeed, it was poetic that Eberhard wasn't behind the wheel when his Tesla crashed - he had been booted from the driver's seat and forced out of the company seven months earlier. Musk has kept silent until now about what happened. "I was too busy trying to fix the fucking mess he left. I haven't had time to tell my story," he says. "I will say, I have never met someone who is as capable of creating such a disinformation campaign as Martin Eberhard."

In the past four years, Musk has sunk $55 million of his personal fortune into the company, the ousted Eberhard has started a tell-all blog to air his grievances, and 1,000 customers - many of whom long ago laid out nearly $100,000 - are still waiting for cars that are unquestionably cool but now a year overdue. The only thing anyone can agree on is that men, not machines, are largely to blame for Tesla's struggles. (See Eberhard's response to this story.)

***

You need to be a little nuts to start a car company. And by most accounts Martin Eberhard always was. In his early career, he launched a series of startups, including an electronic-book company he co-founded called NuvoMedia, which he sold to Gemstar in a deal valued at $187 million in 2000. By 2003 he was looking for his next project. Driving the streets of Palo Alto that year, he began to notice that the same driveways that held a Prius (or "dork mobile," as he liked to call it) often also had a Porsche 911 or other luxury sports car.

"It was clear that people weren't buying a Prius to save money on gas - gas was selling close to inflation-adjusted all-time lows," says Eberhard, a tall, thin man with a mop of graying hair and a nervous, foot-tapping energy. "They were buying them to make a statement about the environment." So why not, he reasoned, allow this deep-pocketed clientele to make that statement driving a car that exceeded the performance of a Porsche?

Eberhard, who has an undergraduate degree in computer engineering and a master's in electrical engineering from the University of Illinois at Urbana-Champaign, spent almost a year doing an analysis of what energy source was most efficient for his imagined eco-supercar. He examined and dismissed hydrogen fuel cells, natural-gas-powered cars, hybrid technologies, and diesel. The energy source that offered the highest efficiency and performance, he concluded, was pure electric.

As it turned out, EV pioneer Al Cocconi (one of the original engineers of the prototype for GM's EV-1 and founder of an EV shop called AC Propulsion in San Dimas, Calif.) had concluded the same thing and produced a one-off he called the tzero. Though the tzero could go 0 to 60 mph in 4.1 seconds, it was loaded to the gills with 1,000 pounds of lead-acid batteries, so its range was limited to 60 or so miles of driving.

At the time, AC Propulsion was struggling to keep its lights on, so Eberhard proposed a deal: In exchange for a $150,000 investment, he wanted Cocconi to try powering the tzero with thousands of lithium ion laptop batteries, which were lighter and had six times more energy per pound than the lead-acid variety. (It was an easy sell: Cocconi was already experimenting with lithium ion.) The lighter batteries worked. The souped-up tzero accelerated from 0 to 60 in 3.6 seconds and had a range of more than 300 miles. Eberhard had found his supercar. He persuaded AC Propulsion to build him one and tried to convince Cocconi that he should put the tzero into production. But Cocconi had no interest in building a car company.

So Eberhard decided to build a car by licensing electric-drive-train technology from AC Propulsion and using an existing carmaker to do the manufacturing, just as semiconductor manufacturers had done with their "fab-less" model. In Eberhard's view, that would make building the car better, cheaper, and faster. After persuading Marc Tarpenning, a software jockey and Eberhard's business partner in his previous companies, to join him, they incorporated Tesla Motors in July 2003. Eberhard didn't know it at the time, but someone else was itching to see tzeros hit the road in large numbers, and that someone had far deeper pockets than he did.

After eBay bought PayPal for $1.5 billion in 2002, Elon Musk, an imposing South African with a yen for high-tech gadgets and designer clothes, had taken his sizable fortune and set up SpaceX in Hawthorne, Calif. Shuttles to space were the first goal, but Musk's really big idea was that by making space travel cheap, people could start moving off earth and onto other planets. His terrestrial plans were equally ambitious. Like Eberhard, Musk had long thought EVs were the logical way to kick our oil addiction. "During undergrad at the University of Pennsylvania, I used to harangue my dates about electric cars," says Musk. Before the Internet piqued his interest, he had even started a Ph.D. at Stanford focused on advanced capacitor technology.

So when JB Straubel, a hotshot engineer out of Stanford who is now Tesla's CTO, mentioned the tzero to Musk, he immediately arranged for a test drive. Musk tried to buy the car, but Cocconi wouldn't sell, nor would he take the $250,000 Musk offered to convert his Porsche 911 Turbo to electric. Then Tom Gage, AC Propulsion's CEO, had an idea. "That's when I suggested that Martin and Elon should talk," he says.

***

It took Eberhard and Ian Wright, VP of vehicle development, only two hours during a February 2004 meeting to get Musk onboard. The meeting ended with Musk saying simply, "Okay, I'll do it." On the street outside SpaceX, Eberhard and Wright high-fived. "I think we just got our funding," Eberhard said.

There were, however, a few catches. Musk saw the franchise-dealership arrangements that U.S. car companies had tangled themselves up in as an increasingly expensive, margin-killing model. He wanted to own and operate Tesla dealerships rather than franchise them. He wanted final say over all decisions - which he would get by naming himself chairman. And finally, Musk demanded that they close the deal in two weeks. His wife was expecting twins, and he needed everything buttoned up by then. Though Musk had a reputation for outsized thinking and an ego to match, Eberhard wasn't in a position to be picky. As he puts it, "You take money from the people who offer it to you."

Tesla now had funding, a business plan, and even a chassis. The first prototype of Tesla's car, dubbed the Roadster, would be based on a $45,000 fiberglass-skinned sports car that Lotus sold, called the Elise. Lotus made fast, light cars and also had the virtue of being the only sports car manufacturer that would give Tesla management the time of day. While Eberhard was thrilled to have a viable plan to build the Roadster, Musk had even bigger ideas. "Eberhard's initial stimulus for starting Tesla was to build the EV he wanted to buy," says Wright. "Musk had a much grander vision: He wanted to be the next General Motors."

Despite their differences, the two men initially worked well together. Both are technical guys who attack problems relentlessly. Eberhard's style is to question every engineering assumption. He'd corner people in the hall and debate them on the merits of air-cooled vs. liquid-cooled battery packs. "Technically he is just brilliant, and he has a tenacity that is unbelievable," says Laurie Yoler, a venture capitalist and an early Tesla board member and investor. "He is the guy you want around in those early days when you have naysayers all around." The team was solving huge technical problems, from battery cooling and load balancing to the power electronics. But if he didn't like an idea, Eberhard could also be very insulting. When an early member of the marketing team suggested putting solar panels on the roof of Tesla's new headquarters in San Carlos, Calif., Eberhard's response was, "Why the fuck would we do that?" (Eberhard says now that the company simply couldn't afford it.)

At the time, Musk's primary job was running SpaceX, but he and Eberhard talked practically every day. On some weekends both men would continue the conversation over dinner at one or the other's home with their families. Using what he was learning about rockets, Musk would constantly suggest materials that could shave a few pounds from the chassis or the body. Says Wright: "There were signs that he wanted to fiddle in the details, but it wasn't enough to make me run screaming. Musk is a technically savvy guy who wanted to help."

The highlight of board meetings for the tech-obsessed group were the show-and-tell portions, with little focus on the bottom line. "Martin would come in all excited and talk about one breakthrough or another," Yoler says. "Then we would go out to the shop and look at the latest electric motor or battery pack prototype." In his role as chairman, Musk would ask technical questions and then offer his own suggestions. As the car progressed, staffers began to realize that a green light from Eberhard was not sufficient. "The question always had to be asked," says Tarpenning, "'What will Elon think of that?'"

As time went on, Musk became more and more comfortable pulling rank. Jessica Switzer, who ran marketing at Tesla until the car's official launch in 2006, recalls persuading Eberhard to spend $30,000 on focus groups to test the car's logo, look, and feel. A few weeks later Musk killed the project without explanation. With Eberhard's approval, Switzer hired people from a PR firm in Detroit to drum up publicity in the automotive press before the car's launch. Musk promptly fired them. She later learned that Musk didn't want to spend money on marketing before the car was finished and figured his own involvement and the car itself would drum up more than enough PR.

When it came to design, Musk's vision - building the Next Great American Car Company - soon came into conflict with Eberhard's goal of getting a cool electric sports car to market quickly and relatively cheaply. The Lotus Elise chassis on which the Roadster was based had a high doorsill, a feature that makes entering the car tricky if you are not careful. Getting out is even harder. It took several attempts for Musk's wife to get out of an early Roadster prototype while wearing a dress. So Musk ordered the engineers to lower the doorsill two inches, thereby losing much of the cost savings that come from using a crash-tested off-the-rack chassis. "Have you tried getting out of an Elise?" asks Musk. "It's like you have to be a contortionist."

And rather than use the fiberglass body panels from the Elise that Eberhard had suggested, Musk insisted on carbon fiber, a lighter, stronger, and "cooler" material, in his opinion. He then went on to redesign the headlights and the door latches. After riding for a weekend in an early Roadster model and taking a beating in the standard Lotus seats, he insisted that custom seats be developed. Every change meant additional cost and time. "I always argued that we would sell exactly as many cars whether the door latches were push-button or electronic, whether the body panels were carbon fiber or fiberglass," Eberhard says. "All the nicer, cooler, faster stuff increased risk."

But Musk got his way, in large part because he was putting more and more of his own money into Tesla. He led Tesla's $12 million second round of financing in the fall of 2005, and also convinced some of his high-powered friends, including Google founders Sergey Brin and Larry Page and eBay employee No. 2, Jeff Skoll, to invest in later rounds. To date, he has personally put in $55 million of the $145 million Tesla has raised.

Musk, who is precise in his sentences, laughs easily, and if fired up will literally leap from his chair to punctuate a comment, admits he poked his nose into everything. "I was very insistent on things during the design phase, and it is true those things cost money," he says, "but you can't sell a $100,000 car that looks like crap." Unfortunately, while the exterior of the Tesla was designed and redesigned to meet Musk's exacting specifications, there was one very big problem: Two months before the car was set to debut in the summer of 2006, it still didn't have a production-ready transmission.

***

As Hollywood heavy hitters like Michael Eisner and Governor Arnold Schwarzenegger mingled with well-heeled car buffs at the Roadster's public unveiling at the Santa Monica Airport in July 2006, it looked like a slam-dunk for Tesla. But behind the scenes company execs were sweating. Electric motors have the advantage of being lightning fast from a standing start. But to get to the top speed that Tesla had promised (125 mph), they needed either a more powerful drive train or a second gear that could send the car speeding beyond 100 mph.

Problem was, Tesla's engineering team didn't yet have the experience to build a more powerful drive train, and no one had come up with a two-speed transmission that could go from 13,000 rpm to 7,000 rpm and survive for more than a few thousand miles before it wore out. Eberhard was inclined to stay on schedule, get cars on the road by sticking with one gear, and offer a Roadster that topped out at 110 mph.

Instead Musk launched the search for a supplier that could deliver a two-speed transmission. "Why did DeLorean fail?" Musk asks. "Because it was a shitty sports car. It may have looked cool, but it had the acceleration of a Honda Civic. That's what our car would have been with the motor we had and the power electronics we had connected to a single speed."

Meanwhile Eberhard was spending more and more time basking in the glow of the clean-tech crowd. He was the face of Tesla, the voice on its blog. He became a regular on the conference circuit and even starred in his own BlackBerry "innovators" ad. But at least four board members, including Musk, were growing concerned that Eberhard didn't have a firm grasp of the company's increasingly complex finances and supply chain. At an executive staff meeting at Tesla's San Carlos headquarters in June 2007, Eberhard grew visibly agitated, according to Straubel and others, as Tom Colson, head of manufacturing, went through a cost analysis of the Roadster put together by one of the company's VC backers.

In Tesla's own prospectus for its most recent round of funding, dated April 12, 2007, it had estimated the cost of building the car at $65,000, dropping as production ramped up. But just two months later, the VCs now believed the average cost was going to be well north of $100,000 for the first 50 cars and would decrease only slightly as more cars were built. "If this is true," Eberhard told Colson and the room, "you and I are both fired."

Eberhard doesn't dispute that things seemed to be heading south, but he says that for months he had been asking the board to hire a CFO and a COO and it wouldn't approve his choices. "I raised my hand and said, 'I am drowning, please help me,'" he recalls. Board member Yoler says that Eberhard could have hired anyone he liked but was holding out for Elon's approval, which never came.

In fact, there was another search going on at the same time. Tesla was moving from its development stage to an operational stage, where costs and schedules were taking precedence. According to board members (all venture capitalists at the time, except for Musk's brother), that wasn't a good fit for Eberhard. Even his old friend Tarpenning saw the problem. "You reach a point where the same people who are running the company when it has three people are not the same people who are running the company when it has 300," he says. "Both of us had been around the Valley long enough where we knew that to be the case." Eberhard himself agreed to join a board subcommittee to search for his own replacement. Dozens of candidates were interviewed and rejected; in the meantime Eberhard remained optimistic that Tesla would be able to hit its Aug. 27 production date.

But according to Darryl Siry, Tesla's head of sales, marketing and service, that wasn't going to happen. In June, he says, Lotus factory officials began warning that the late-August launch wasn't realistic. Eberhard persisted, saying in staff meetings that "we're dead if we miss that launch," Siry says. Yet Tesla hadn't even released all the car's specs to the parts suppliers. Two suppliers, Xtrac and then Magna, failed to get the two-speed transmission to work. Still, Tesla was ramping up spending as if it was going to start production in late August, putting $469,696, for example, into stereo and navigation gear that never made it into the cars and instead was sold back to the distributors at a loss. "Elon was pushing for early shipping all the time - it wasn't me," says Eberhard. "I resisted that spending, but Elon insisted."

Even though the Roadster project was wildly off course, between January and June 2007 there were monthly board meetings about designs for showrooms and a parallel project to find a site - they picked Albuquerque - to build a factory for Tesla's second model car, a $59,000 sedan code-named Whitestar. "Either senior management just wasn't paying attention, or they were hoping it would work itself out and they could fix it later," says one board member. "They were running line items on cost, irrespective of where milestones were on development of the car and the supply chain, as if they were not related."

With more-financially-minded investors like Valor Equity Partners and Technology Partners now backing the company, board meetings became focused on the numbers, and according to Musk and three other board members, Eberhard simply didn't have the answers. "In any other company it's the CFO that provides those numbers," Eberhard says in his defense. "I'm an engineer, not a finance guy." During the July 2007 board meeting, Eberhard took a grilling. "You can't tell me the car is going to cost $65,000 to make when just the battery pack is well over $20,000," recalls the board member. "This CEO would not admit the problems and ask for help. You must develop commitments from data and set them in reality, not just hope it works out. We did not believe that this registered with him, and the board felt compelled to take action." A month later Eberhard was removed as CEO and demoted to president of technology.

****

In August 2007, Tesla finally got its priorities straight with what became known as the "Marks list." It was put together by Michael Marks, former CEO of Flextronics and a minority investor in Tesla, whom Musk handpicked as interim CEO to replace Eberhard. It contained about a dozen items in order of importance, each of which had the potential to delay the car. At the top: battery pack, battery cooling, and transmission.

Whereas Eberhard was the high-concept visionary, Marks was a manufacturing whiz with no tolerance for any gray areas in schedule or cost. He quickly realized there was no way to hit the late-August launch and ordered a minimum six-month delay. "I postponed anything that wasn't aimed directly at getting the Roadster out the door," Marks says. That meant mothballing plans for the factory in Albuquerque and shuttering a side business that would have produced battery packs in Thailand for other automotive customers. "If we didn't get that car out," he says, "there wasn't going to be a business."

Eberhard had cut a deal with Lotus for production of the Roadsters that included penalties if production didn't begin on schedule. It didn't. In October, Lotus hit Tesla with a bill for $4 million. That was just the start of the company's cash-flow problems. "We had bought 80% of the parts for hundreds of cars, but since we didn't have the remaining 20% of the parts (including a working transmission), we couldn't ship [the cars] and get paid for it," said Musk.

Marks had been keeping Eberhard temporarily busy on power-supply electronics problems and public appearances, but in December 2007, Musk orchestrated his ouster from the board. Over the next month 10% of Tesla's employees, most considered Eberhard loyalists, were also let go.

Eberhard was furious, believing he had just been following Musk's orders. "Either he was a passive investor or he was involved," says Eberhard, "and I can tell you, Elon was involved every step of the way." Though he had lost control of the company, Eberhard could still fight a PR war. He launched "The Tesla's Founders Blog" detailing what he called the "Stealth Bloodbath" and soliciting comments from current and ex-employees. A typical post: "The company has changed so tremendously since I started. It's very secretive and cold now. It's like they're trying to root out and destroy any of its heart that might still be beating."

The board went nuts, and Yoler pleaded with Eberhard to stop (he eventually toned it down). Nancy Pfund, who sits in on board meetings on behalf of Tesla backer J.P. Morgan, says that Eberhard's "bloodbath" was really just getting costs under control. "We had to reduce the burn rate of the company," she says. "It's always painful, but that doesn't mean we didn't have to do it."

Morale plummeted for those who remained, especially since the car was still nowhere near ready. "We knew things were not going to get better until we had cars out there, so that is what we focused on," says CTO Straubel. Musk began spending two to three days a week at headquarters. The board found a permanent replacement for interim CEO Marks in Ze'ev Drori, an operations-focused Silicon Valley veteran who came out of retirement. Meanwhile CTO Straubel took the car apart on the shop floor in San Carlos, looking at every printed circuit board and every bracket to see where the company could cut costs. Since no supplier could provide the two-speed transmission Tesla wanted, Straubel's team continued to work on the one-speed version, seeing whether it could eke more power from the motor and the electric drive. In March 2008, with a clear path to costs below the sticker price by the end of the year, Tesla decided it could wait no longer and began production of the Roadster. The transmission on the first 40 Teslas, however, will need to be replaced by the end of the year to get the promised performance.

***

Seven Teslas - part of the so-called Founder's Series - have been completed. (The lucky owners: Musk, his brother, board member Antonio Gracias, investor Skoll, Google's Larry Page and Sergey Brin, and of course Eberhard.) The company hopes to ship several hundred more by the end of the year. Musk has set his sights on delivering Tesla's next car sometime in 2010. Called the Model S, it's an all-electric $60,000 family sedan with four doors and a hatchback, which he now plans to build in the Bay Area. He'll need to raise $250 million to $300 million, and he knows it's a long shot that Tesla can grow up and become a real car company. For all the difficulty of getting a few cars built, scaling to thousands and tens of thousands of cars is exponentially harder. Tesla is turning to automotive veterans like former Chrysler executive Mike Donoughe, recently hired as executive vice president of vehicle engineering and manufacturing, to help crack that code. But before it can get to the next car, Tesla needs to make sure the Roadster is a success.

And there are a whole lot of auto buffs and professionals waiting to see what will happen when these cars hit the road for real. Though you can get insurance for a Tesla, a big concern is the amount of heat generated by 6,831 battery cells lashed together. "Never mind whether they will burst into flames," says Bruce Belzowski, assistant research scientist at the University of Michigan's Transportation Research Institute, of the Tesla batteries. "What if they plain don't work? There is real uncertainty about these battery technologies, because there is nothing to compare it with - it's so new there aren't even regulations in place yet." Tesla says the batteries have been tested for an equivalent of 40,000 miles with no safety or durability issues.

Tesla's customers don't seem particularly concerned. During all the turmoil, only about 30 of almost 1,000 asked for their deposits back, and those spots were quickly filled. Engineer Earl Cox (who is buying a Tesla, as is his dad, Stanford professor Don Cox) says he has a great deal of respect for Eberhard. "But I would still love Tesla to win," he says. "I would love if Elon Musk went down in history alongside Henry Ford for doing this thing. It is a great car - I don't have any hesitancy about that - and I can't get it soon enough."

Same goes for Stephen Casner, a software engineer who worked with Eberhard and Tarpenning at networking technology company Packet Design. It was because he trusted and believed in his two former colleagues that he put down $100,000 for his radiant red Roadster. What he didn't do is ask for his money back after Eberhard was shown the door and Tarpenning quit. "I guess I just want the car too much," Casner says.

Startups, after all, are always chaotic. The people who found them are often arrogant or overbearing or both. But in a way Musk was right: The bumps along the road are forgettable, as long as the car isn't.

First Published: July 10, 2008: 7:41 AM EDT

The advantages of irrelevance

Swaminathan S Anklesaria Aiyar,

Having won over the Samajwadi Party (SP), the Manmohan Singh government can push ahead with the Indo-US nuclear deal, and hope to complete its full five-year term. If the government survives the trust vote, Congressmen will be delighted, since they are terrified of an early election, given that inflation is running at 12%.

Their delight will be tempered by the bitter knowledge that the once-mighty Congress is steadily decreasing in political relevance, in state after state. Yet, ironically, its growing irrelevance in the states has actually helped it survive in New Delhi. Even dark clouds have silver linings, sometimes very broad ones.

When the Congress won more seats than the BJP in the 2004 general election, it was far short of an absolute majority, and sought the assistance of every possible party to cobble together a ruling coalition. It sought the support of the SP too. But Mulayam Singh Yadav said absolutely no. He feared that a Congress government in New Delhi might find ways to cut him to size in Uttar Pradesh or even oust him, and then stage a comeback in India's largest state. Mulayam feared that the Congress might win back the support of UP Muslims, who had defected to him in droves after the demolition of the Babri Masjid. So, he declined firmly to support the Manmohan Singh government.

Why then has he suddenly changed tack, and saved Manmohan Singh's bacon? Because he is finally convinced that the Congress has become irreversibly irrelevant in UP, and should no longer be viewed as a threat. In the 2007 state assembly election, Rahul Gandhi, heir apparent of the Congress, himself spearheaded the party's state campaign, and aimed to win back lost ground. Alas, the Congress came a pathetic fourth in the state election, far behind the BSP, SP and BJP. Despite Rahul's efforts, the Congress tally of seats actually fell from 25 to 22. The party won just 8.4% of the popular vote, down from 12% in 2004.

Its decline in the state worsened in the five by-elections in the state in April this year. The BSP swept all five seats, and the Congress lost its deposit in four of the five. The once-hegemonic party of India had become a pathetic also-ran.

This, above all, explains why the SP has decided to support the Manmohan Singh government. It can afford to do so because the Congress has become irrelevant in UP. It is now a party to be used, not feared. The only parties that matter now in the state are Mayawati's BSP and Mulayam's SP, with the BJP and Congress playing minor roles. In this scenario, Mulayam can use the Congress to harass Mayawati, by pursuing corruption and income tax cases against her more vigorously. And he can hope to come back to power in UP in the next state election by having the Congress as a very junior ally.

This drives home the point that, in a highly fractured polity, weakness in some regions can translate into an advantage in New Delhi. In the 1990s, this factor played to the advantage of the BJP. It had some strength in the Hindi-speaking heartland, and in Gujarat. But in other parts of the country it had little or no strength. Yet, it managed to come to power in 1998 with the assistance of sundry regional parties.

For most regional parties, their main local foe was the Congress party. Hence, they were willing to support the BJP simply as their enemy's enemy. The TDP, AIADMK, BLD, Samata Party, and others joined Vajpayee's NDA government. The very fact that the BJP was so weak in their respective states meant they faced no threat from it locally, and that made it a more attractive partner in New Delhi.

The Congress was upset to see professedly secular parties like the TDP and Samata Party joining hands with the BJP. It made strong declarations at its Pachmarhi summit about spurning opportunistic regional parties, and seeking to return to power on its own. Yet, this had the practical effect of pushing regional parties further into the BJP camp.

Those delusions of grandeur have gone now. The Congress has declined in one state after another, and knows that it cannot rule without allies. It has submitted to constant humiliation by the Left Front for four years in New Delhi, knowing that this is the price for survival.

Yet, this humiliating decline is now proving to be an advantage. Lalu Yadav, who for most of his political career had viewed the Congress as his main foe in Bihar, realised in 2004 that the Congress had become so irrelevant in the state that he could afford to ally with it. That realisation was what made the current UPA government possible: Lalu could join it without jeopardising his own position in Bihar.

The same thing has now happened in UP. There, too, the Congress has become irrelevant. And so Mulayam can afford to support the Manmohan Singh government in New Delhi. Rahul Gandhi may be a pale shadow of what was once an all-powerful Gandhi family. But that actually enhances his attractions.


Article Link

Right for good governance

A day after I wrote on the SP’s ulterior objective, I was pleasantly surprised to see an article (Let us not lose sight of good governance ) that raised this issue in the newsprint. Surprising because it’s rare to see such open opinions in my usual read The ToI. But this was from The Hindu, who I feel are usually more outspoken about their political opinions (though sometimes criticised as one-sided).

Here the writer (Harish Khare) has been able to put a better perspective to the issue of the murky Ambanis’ feud getting into Governmental issues. The article gives more data and history to the story. But at one place the article fails. Towards the end of his argument Khare goes on to state “If the ruling alliance’s new ally wants to use its status to correct a perceived tilt, we would all be better off. Even in this age of market reforms, the corporate houses are totally beyond the government’s reach; nor are they above wanting to suborn the law and the loyalties; therefore, if the new political alignments in New Delhi are used to bring about a healthy balance, so be it. Irrespective of the dramatis personae, it would provide the much-needed corrective to our public discourse if we are able to debate on the economics and ethics of allowing windfall profits in a country of vast poverty.”

Well, after all this argument he simply states that “two wrongs make a right” or rather “it is the end and not the means”. I do not subscribe to that policy. If we are letting the Government run according to the individual agendas of its coalition parties who walk in and out like people in a mall, then where is the reason for a political manifesto. In the future elections let’s not invest in anyway-a-farce-statement called Manifesto or now the Common Minimum Programme. Next time on we are into a two party system like the US, albeit with a difference. The political parties will state whether their mandate is to protect Anil or Mukesh. The rest will fall in line. Given that the Ambanis’ are increasingly getting into the nerve of every Indian, this policy should suffice. So if your worry today is that the communication industry is not functioning properly, then vote for the Anil party. The ensuing Government will roll out subsidies for upgrading the CDMA services, slap hefty licenses on GSM providers and bingo.

We have a right to demand ideal political conditions. Mr. Khare, I agree that sometimes these cannot be helped. But as a think tank on a leading newsreel, your duty bound to suggest, to fight for the better and not succumb to the present.

Last head: PM, govt top guns may broker Ambani peace deal. That's nice job for a change.

Challenging the basis of Kyoto Protocol

Vladimir Radyuhin

Russian scientists deny that the Kyoto Protocol reflects a consensus view of the world scientific community.

As western nations step up pressure on India and China to curb the emission of greenhouse gases, Russian scientists reject the very idea that carbon dioxide may be responsible for global warming.

Russian critics of the Kyoto Protocol, which calls for cuts in CO2 emissions, say that the theory underlying the pact lacks scientific basis. Under the Theory of Anthropogenic Global Warming, it is human-generated greenhouse gases, and mainly CO2, that cause climate change. “The Kyoto theorists have put the cart before the horse,” says renowned Russian geographer Andrei Kapitsa. “It is global warming that triggers higher levels of carbon dioxide in the atmosphere, not the other way round.”

Russian researchers made this discovery while studying ice cores recovered from the depth of 3.5 kilometres in Antarctica. Analysis of ancient ice and air bubbles trapped inside revealed the composition of the atmosphere and air temperature going back as far as 400,000 years.

“We found that the level of CO2 had fluctuated greatly over the period but at any given time increases in air temperature preceded higher concentrations of CO2,” says academician Kapitsa, who worked in Antarctica for many years. Russian studies showed that throughout history, CO2 levels in the air rose 500 to 600 years after the climate warmed up. Therefore, higher concentrations of greenhouse gases registered today are the result, not the cause, of global warming.

Critics of the CO2 role in climate change point out that water vapours are a far more potent factor in creating the greenhouse effect as their concentration in the atmosphere is five to 10 times higher than that of CO2. “Even if all CO2 were removed from the earth atmosphere, global climate would not become any cooler,” says solar physicist Vladimir Bashkirtsev.

The hypothesis of anthropogenic greenhouse gases was born out of computer modelling of climate changes. Russian scientists say climate models are inaccurate since scientific understanding of many natural climate factors is still poor and cannot be properly modelled. Oleg Sorokhtin of the Russian Academy of Sciences Institute of Ocean Studies, and many other Russian scientists maintain that global climate depends predominantly on natural factors, such as solar activity, precession (wobbling) of the Earth’s axis, changes in ocean currents, fluctuations in saltiness of ocean surface water, and some other factors, whereas industrial emissions do not play any significant role. Moreover, greater concentrations of CO2 are good for life on Earth, Dr. Sorokhtin argues, as they make for higher crop yields and faster regeneration of forests.

“There were periods in the history of the Earth when CO2 levels were a million times higher than today, and life continued to evolve quite successfully,” agrees Vladimir Arutyunov of the Russian Academy of Sciences Institute of Chemical Physics.

When four years ago, then President Vladimir Putin was weighing his options on the Kyoto Protocol the Russian Academy of Sciences strongly advised him to reject it as having “no scientific foundation.” He ignored the advice and sent the Kyoto pact to Parliament for purely political reasons: Moscow traded its approval of the Kyoto Protocol for the European Union’s support for Russia’s bid to join the World Trade Organisation. Russian endorsement was critical, as without it the Kyoto Protocol would have fallen through due to a shortage of signatories. It did not cost much for Russia to join the Kyoto Protocol since its emission target was set at the level of 1990, that is, before the Russian economy crashed following the break-up of the Soviet Union. According to some projections, Russia will not exceed its target before 2017. Notwithstanding this, the Russian scientific community is vocal in its opposition to the Kyoto process.

“The Kyoto Protocol is a huge waste of money,” says Dr. Sorokhtin. “The Earth’s atmosphere has built-in regulatory mechanisms that moderate climate changes. When temperatures rise, ocean water evaporation increases, denser clouds stop solar rays and surface temperatures decline.”

Academician Kapitsa denounced the Kyoto Protocol as “the biggest ever scientific fraud.” The pact was lobbied by European politicians and industrialists, critics say, in order to improve the competitiveness of European products and slow down economic growth in emerging economies. “The European Union pushed through the Kyoto Protocol in order to reduce the competitive edge of the U.S. and other countries where ecological standards are less stringent than in Europe,” says ecologist Sergei Golubchikov.

Russian scientists deny that the Kyoto Protocol reflects a consensus view of the world scientific community. Academician Kapitsa complains that opponents of the man-caused global warming are routinely denied the floor at international climate forums.

“A large number of critical documents submitted at the 1995 U.N. conference in Madrid vanished without a trace,” the scientist says. “As a result, the discussion was one-sided and heavily biased, and the U.N. declared global warming to be a scientific fact.”

Critics concede that the thrust of the Kyoto Protocol is towards promoting energy-saving technologies, but then, they argue, it should have been just that — a protocol on energy efficiency and energy conservation. The problem with the Kyoto process, critics say, is that it shifts the emphasis away from genuine ecological problems, such as industrial, air and water pollution, to the wasteful fight against harmless gases.

“Ecological treaties should seek to curb emissions of sulpher dioxide, nitrogen oxides, heavy metals and other highly-toxic pollutants instead of targeting carbon dioxide, which is a non-toxic gas whose impact on global warming has not been proved,” says Dr. Golubchikov.

Russian researchers compare the Kyoto Protocol to the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, which called for phasing out Freon-12 as a preferred refrigerant. It has since been proved, says Dr. Golubchikov, that chlorine-containing Freon-12 destroys ozone only in laboratory conditions whereas in the atmosphere, it interacts with hydrogen and falls back to Earth as acid rain before it can harm ozone.

The Montreal Protocol brought billions of dollars in profits for U.S. DePont, which held global patent rights for Freon-134, an alternative refrigerant that does not interact with ozone. “Within 10 years of the Montreal Protocol the output of refrigeration compressors in the U.S. increased by 60 per cent, whereas in Europe it declined by a similar proportion. In Russia, which accounted for a quarter of the global market of refrigerants, the industry ground to a complete stop,” says Yevgeny Utkin, Secretary of Russia’s Inter-Agency Commission for Climate Change.

The ultimate irony of the Montreal Protocol is that the new refrigerant is the most potent among greenhouse gases blacklisted under the Kyoto Protocol, and moreover is explosion-prone. The Freon bubble burst when, in 1989, the ozone layer suddenly jumped to the pre-Montreal Protocol level and has since continued to rise. Russian critics of the Kyoto Protocol are convinced that the greenhouse gases bubble will likewise prove short-lived.
Global cooling

Who remembers today, they query, that in the 1970s, when global temperatures began to dip, many warned that we faced a new ice age? An editorial in The Time magazine on June 24, 1974, quoted concerned scientists as voicing alarm over the atmosphere “growing gradually cooler for the past three decades”, “the unexpected persistence and thickness of pack ice in the waters around Iceland,” and other harbingers of an ice age that could prove “catastrophic.” Man was blamed for global cooling as he is blamed today for global warming. “Climatologists suggest that dust and other particles released into the atmosphere as a result of farming and fuel burning may be blocking more and more sunlight from reaching and heating the surface of the earth,” The Time lamented.

Russian scientists say that today’s alarmism over greenhouse gases is as baseless as concerns about man-raised dust were 30 years ago. Solar physicists claim that the Earth has entered a 30-year period of global cooling predicated upon a cyclic decline in solar activity. They cite U.S. global weather reports as indicating that global temperatures have stopped rising since the turn of the century. “The global warming in 1970-1998 was merely a phase in the 60-year cycles of natural warming and cooling,” Dr. Bashkirtsev says.

Russian climate researchers working in Antarctica confirm that temperatures on the sixth continent have been declining in recent years. According to geographer Nikolai Osokin, the ice cover in Antarctica, which accounts for 90 per cent of the global ice stock, has overall been growing.

This year global temperatures have been showing a distinct downward trend, and according to the Earth System Science Center at the University of Alabama in Huntsville, in May “the globe was cooler than at any time since January 2000.”

This is good news for Dr. Bashkirtsev, who together with another Russian solar physicist three years ago, bet climate scientist James Annan $10,000 that the Earth would cool down over the next decade. It is more than a wage; it is a contest between two concepts of climate change. The Russian scientists believe in sun-driven climate changes, while the British researcher creates man-caused climate-warming models on the Earth Simulator supercomputer in Japan’s Yokohama.

SP's ulterior objective

Not even a day into supporting the Government, the SP has already shown its ugly head of self fulfilling reasons why it decided to back the Government. Amar Singh is demanding why Petroleum Minister Deora "continues to favour only one well-known private operator". Well it is an open secret that he is talking of none but Mukesh Ambani controlled RIL and nobody needs extra thoughts to infer that he is talking at the behest of his close buddy and fund provider, Anil Ambani. Look at his other concern –GSM operators should be charged higher fee to get 3G licences (again a favour for Anil Ambani who controls CDMA based RCom). Agreed these may be genuine concerns that the Government should look into. But at the time of rising inflation, impeding food crisis, growing internal insurgency and a fractured foreign policy, Amar Singh believes that the first thing he has to review when in Government is to abet his friend Anil Ambani in his personal rivalries.

We have seen Railway Ministers use their position to push more railway lines/development in their constituencies or State. We have also seen kith and kin of Defence Ministers winning defence contracts. But it is appalling to see an inconsequential personal rivalry between two corporate conglomerates to be brought into the day to day affairs of the Central Government. Gone are those days when being in power meant some extra benefits. Today that is the ulterior objective. I just pray that nobody in SP take any ministerial position. You never know where the sights of the leeches are.

And how does Amar Singh quote his words - "If I take the Prime Minister's suggestion on nuclear deal seriously, I hope Prime Minister will take cognizance of what I raised." Last heard, the officials of the Finance, Petroleum and PMO were busy explaining Amar Singh on issues raised by him.

---Vj

ET: SP targets pvt oil firms; wants PM to take cognizance

Sam Manekshaw

Jul 3rd 2008

From The Economist print edition

Sam Manekshaw, soldier, died on June 27th, aged 94

EPA

HIS most famous remark was not, strictly speaking, true. On the eve of the war with Pakistan in December 1971 that led to the creation of Bangladesh, India’s prime minister, Indira Gandhi, asked her army chief, Sam Hormusji Framji Jamshedji Manekshaw, if he was ready for the fight. He replied with the gallantry, flirtatiousness and sheer cheek for which he was famous: “I am always ready, sweetie.” (He said he could not bring himself to call Mrs Gandhi “Madame”, because it reminded him of a bawdy-house.)

Yet General Manekshaw himself recounted a cabinet meeting in Mrs Gandhi’s office in April 1971. To forestall secession, the Pakistani government had already cracked down in what was then East Pakistan. Hundreds of thousands of refugees had crossed the border into India. Mrs Gandhi wanted the army to invade Pakistan. General Manekshaw resisted. The monsoon, he pointed out, would soon start in East Pakistan, turning rivers into oceans. His armoured division and two infantry divisions were deployed elsewhere. To shift them would need the entire railway network, so the grain harvest could not be transported and would rot, bringing famine. And of his armoured division’s 189 tanks, only 11 were fit to fight.

He was not, in other words, ready. But, as he put it, “There is a very thin line between being dismissed and becoming a field-marshal.” Mrs Gandhi rejected the resignation he offered, and acceded to the delay he wanted. His job, he told her, was to fight to win. In December he did, cutting through the Pakistani army like a knife through butter, and taking Dhaka within two weeks. Quibblers later noted that this was not one of his original war aims. He had the most important attribute of any successful general: good luck.

That was not the only time he threatened to quit. Mrs Gandhi once questioned him about rumours that he was plotting a coup. In response, he asked if she wanted his resignation on grounds of mental instability. Yet if she and other politicians were in awe of him as a professional soldier and grateful for his lack of political ambition, his men loved him for his willingness to take on their civilian bosses and stand up for the army’s interests.
He had shown this in the Indian army’s darkest hour, the abject defeat in 1962 by China. Already a general, he had the previous year quarrelled with India’s defence minister, V.K. Krishna Menon, about national security. He was vindicated when the Chinese army swatted aside Indian resistance and briefly occupied what is now the state of Arunachal Pradesh. Mr Menon resigned. General Manekshaw was rushed to the front to rally the demoralised troops. His first order was: “There will be no withdrawal without written orders and these orders shall never be issued.”

General Manekshaw was able to demand courage from his soldiers because his own was not in doubt. Known as Sam “Bahadur”, or Sam the Brave, an honorific given him by the Indian army’s Gurkhas, the first of his five wars was for the British in Burma, where he was seriously wounded. Assuming he would die, an English general pinned his own Military Cross on Captain Manekshaw’s chest, since the medal could not be awarded posthumously. Another story has it that a surgeon was going to give up on his bullet-riddled body, until he asked him what had happened and got the reply, “I was kicked by a donkey.” A joker at such a time, the surgeon reckoned, had a chance.

Stiff but hairy

There was something of British military tradition in his stiff upper lip, the lavish handlebar moustache in which he cloaked it, the dapper little embellishments to his uniform and his partiality for Scotch whisky. Yet he was born into a very particular and tight-knit community: India’ s small and dwindling Parsi minority, which has produced a disproportionate number of leading Indians, such as the members of the Tata and Godrej business dynasties. Sam Manekshaw was another Parsi overachiever. He was the first of only two field-marshals ever created in the army.

Yet his retirement since 1973 was not one long bask in glory. Former deputies felt he had monopolised the credit for various victories. Then last year his name was linked to bizarre allegations, by the son of a former Pakistani president, against an unnamed brigadier who had once sold Indian war plans to Pakistan. All nonsense, said those who knew him. Already in hospital, General Manekshaw was in part shielded from controversy.

After his death, anger at the slur, and at the lack of proper honour for one of India’s true heroes, rumbled on. The prime minister, along with the army, navy, and air-force chiefs, all missed his funeral—which was a modest one held in Tamil Nadu in the south, not a grand one in the capital. His friends grumbled that even foreigners such as Lord Mountbatten were afforded greater respect in death. Bangladesh, however, paid grateful tribute to his part in the nation’s foundation.

He too might well have been disappointed that his obsequies were not grander. His last words were “I’m OK”, though he had rehearsed a better line nearly 37 years earlier. For death at least, the brave soldier had indeed shown himself “always ready”.