Tesla Cuts 200 Autopilot Workers, Closes Site

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Charlie talking about the overall market trade, signing out some names Tesla also on our radar. It's down about one point eight percent in today's session,

definitely off. It's loads of the day, and we want to get to a story um that is courtesy of our own Bloomberg's Ed Ludlow and Dana Hall Bloomberg exclusive talking about the company's plans to cut about two hundred autopilot workers as it shuts down it's California's site. Let's get more. Bloomberg News West Coast correspondent Ed Ludlow. He is in our nine sixties studio in San Francisco. Check them out on YouTube. As we speak, you can see him Hi ed Hey, So tell us about this story.

You guys broke it? Um, What do we need to know? And was it a surprise? Yes and no. There's a facility in Samoteo here in the Bay area and it was home to the Auto Pilot dates babling team, and sources tell us that they were all called into yesterday and told that their jobs were gone, that this was part of a longer term plans moved this team from one facility in Samotheo for one down the road in lots of those workers are expecting to be moved, but

ultimately what happened was they were laid off. And I think you're actually at a port and that's a ship coming in. Is that what's going on? So? I mean when I saw this headline cross yesterday, usually you would see the headline like this and be like, oh man, the company is in trouble or in some sort of stress that we didn't know about. Is that true in Tesla's case? So elon must hold Our editor achieve John mcauthwaite last week that Tesla would be laying off ten

percent of salaried workers. Tesla's workforce is split between two thirds hourly workers and one third salaried. This is important because according to sources, the vast majority of those laid off yesterday were hourly, not salaried. So it's kind of at odds what happened. Because Elon must told us it would cuts would focus on salaried employees, hourly workers would be protected. Now. Elon Musk also clarified that a lot of the hourly jobs he was talking about growing would

be on production lines. The people we're talking about data labelers, they're working on the auto pilot functionality, but there's still hourly workers. So it was a surprise because we were led to believe that those types of employment contracts were protected. So is this a shift of a mega growth company. It feels like um as it's wrapped up and you have been spitting out its vehicles. I mean, is that a shift from this company maybe not being such a

big growth player, but still producing a lot. You know, autopilot data labing is kind of a manual job and a thankless job. You basically take video footage that's generated from the cameras on Tesla customer cars, Tesla owner cars, and you annotate to help train the neural networks that improved the technology. People are doing that here in the Bay Area, but they're also doing it in Buffalo, New York. And what sources tell us is that actually that team

is growing in Buffalo, New York. But sources also tell us that they are paid less in New York State than they are here in the Bay Area. So that's one factor to consider. But it's definitely one of these areas that Elon Musk has referred to where they grew too quickly to two greater size. You know, they're big teams in the Bay areas. I said this was part of a sort of change of plan to move people to different Obviously is they've been winding down the team anyway,

but it's still interesting. Well that's kind of what I was thinking, because it caught my eye in your story that you say that the company now based in Austin, Texas. It's currently about a hundred thousand employees globally. I had no idea that Tesla employed that many people. And I think about what we've heard from Amazon, and I think Walmart too, coming out and saying that they overstaffed. I mean,

could that potentially be true in Tesla's case. You know, I think what we learned with inflation is inflation took us by surprise. It's surprise to the upside a lot. The macro picture in the supply chain breakdown continues to surprise us, and inventories of retailers is a good example of that. What I would say is that people have short memories when it comes to Tesla, and you have to remember that there have been rounds of job cuts before.

You know, the stock performed astronomically in the in the early days of the pandemic, but they did go through a round of layoffs when things were tought. So we've seen Elon must be prepared to do this in the past, and he'd warned us, Hey, you know one thing I wanted to ask you, um kady. Now we're just kicking around some stories in the solar world, in the alternative energy world. There's a story by Tara Patel about Stilantis.

It's one of Europe's biggest automakers and they are warning of a car market collapse if evis don't get cheaper. I have to say that's that makes sense to me that unless we bring down the price, and I don't know how we do it, whether it's just you know, being able to mass produce more. I mean, how do you see it? And how does kind of tests the play into this. Who has been also trying to, I feel like, be more aggressive about getting a car for

the mass market. Yeah, you guys, remember Elon Musk had this original goal of a twenty five dollar EV where he wanted to make one for the masses. Well that's gone out the window, frankly, he's abandoned that idea, and not every If we take the United States an example, the median household cannot afford a forty fifty sixty seventy thousand dollar vehicle, especially a small one like a Tesla

Model three or Model Why. They look for value. And you look across the market and the trend that we're seeing all of these EV players, the Rivian's, the Lucids on top of tests that and the legacy auto like GM and Ford. It's very expensive high end models they're offering. We don't yet have a true mass market model that is affordable for that media to lower income family household. And you know that's the inflection point. You look at

China where you the adoptions further ahead. They have a greater variety of model types and at more affordable prices than we have here in the United States and Europe. Again, more option, lower price point. All right, to look into your crystal ball. What's gonna be the next story on a Elon Musk is gonna be tesla twitter wet just quickly yet you know Elon Musk has not tweeted since June twenty one. I want to know why. I feel something's coming. Guys, I feel something's coming. Ellen, are you

out there? You can just tweet it ad directly Bloomberg Air while you're at it. Yeah, exactly, Come join us at love Look. Thank you so much as always, great Scoop West Coast correspondent Bloomberg News in our nine sixties studio in San Francisco. You can hear them Bloomberg Radio and see them on YouTube. Katie and I come back in just a moment. Right here at Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg

Quick Takes Tim Stinovic on Bloomberg Radio. Well, the Bloomberg business Week annual Heist issue. It is out. The cover story takes us from the Cambodian Jungles to the Metropolitan Museum of Art. It is about an art crime for the ages, and earlier I caught up with Matt Campbell, Asia editor for Bloomberg business Week from Singapore. Matt wrote that story along with Bloomberg Business Week editor Joel reb Webber. I began by asking Joel about how this story perfect

for the Heist issue came to his attention. Matt actually wrote this story and as he'll I think reveal here, actually the main character UM is a character named Douglas Latchford, and Matt had high hopes to actually talk to him at some point, but then obviously COVID happened and he

passed away. So what is incredible. But the story though, is that it really speaks to Cambodia and artifacts at Cambodia, but also the sea change within the art world where artifacts that UM were looted decades ago are now in the crosshairs of investigators who are trying to actually return them to their rightful owners. UM. So, so Matt talked to us about Douglas Slatchford, who is he exactly? So?

Dougla Flashford, the late Dougla flash For who died was a British businessman who lived virtually his whole adult life in Bangkok uh and among other activities, he was for a period of about forty years arguably the top dealer in the world of statues from Cambodia, the spectacular Khmer Empire sculptures and some of them a thousand years old

or more. And he really built an art dealing empire, and there are works in a very fancy private collections and huge important museums like the met in the British Museum with links to Latchford all over the world. But but as has now become a parent, he was a part of a looting network and was facilitating essentially the looting and laundering of statues that were being ripped from temple having their origins of Steward and then trafficked onto

the international art market. So what did that network really look like because he actually really never went into the jungle. It was wasn't like he was an Indiana Jones character here going into the jungle to get these artifacts, right, So what did his network look like that's right, Joel. There is there has been a perception of Lashford sometimes in the past as as kind of a tomb raider himself,

and that in fact is not true. He directed this operation and he did everything that he did essentially from his apartment in Bangkok. But what he did was by whatever was coming over the border from this network of looters and brokers within Cambodia who do that. Lash was a buyer. He helped create a huge market for stolen antiquities, uh, and certainly had contact with the brokers who were deciding to some extent what got looted and what got out

of Cambodia. So while he was not himself smashing and grabbing statues, he was really the essential node in this operation. Without him, and particularly without his very energetic salesmanship which made these Cambodian statutes into really big money objects, you know, selling for for high six and even seven figure prices, Uh, this looting would never have occurred on the scale that it did. And what are the artworks themselves? So we need to do a little bit of a little bit

of background history here. Cambodia a thousand or so years ago was the center of something called the Khmer Empire, which was this Hindu and Buddhist monarchy stretching encompassing all of contemporary Cambodia as well as much of Thailand in Vietnam, was this very powerful civilization. Ongore was the capital on Gore Watt being the site of people are familiar with.

And these Cambodian kings commissioned massive statues. You know, these are four feet tall fig feet tall, you know, six hundred pounds stone objects depicting gods and warriors or themselves, you know, or or their wives and children. Really beautiful figures. And actually when you spend a little time with these objects as I have, it's very easy to see how you can become obsessed with them, as Douglas Flatchford was well, and you know, take us there, Matt, you went to

the Cambodian Jungles. Tell us about what you saw, uh, and kind of the massive I mean some of these there's some pictures in the magazine. They really are are stunny, but they're they're massive. And take us to also where you know, who knew that feet would be so key in figuring out this heist, if you will? Well, so one of the things that strikes you about visiting temples in Cambodia is, first of all, they are spectacular and they're amazing places and and sort of overwhelming to see

you in person. But but as you look a little more closely, you realize what's not there is that these buildings are empty. Because as there were statues, they used to be full of statues. But the statues are all gone, and we're all taken years and years ago. Some were taken under the French, others later, you know, during the Cambodian Civil War and the Camara Rouge period and then this really big period of looting which I described in the story in the nineties, and that was really the

golden age of Temple Robin in Cambodia. And however, this looting was sort of crude and left behind remnants and fragments, and actually, as you alluded to, feet uh and and one of the key anecdotes and the story relates to matching a pair of statues that had made it into Western collections to their feet which were still in sits

you on the ground, broken off. And of course it's possible, you know, with with computer technology to three D match these objects together and to determine this statue came from this place, and then if you can interview witnesses find people who remember that being taken, you can actually nail down the when as well, when and how did this

high begin to unravel. So this has been a long and kind of interesting, very interesting process where you've had a number of private citizens, heridag activists, archaeologists, other people involved in antiquities in one way or another who have had suspicions about this trafficking network for over a decade now.

But things really began to unravel in the mid when US prosecutors, specifically in the Southern District of New York, began to take an interest in antiquities trafficking and antiquities trafficking from Cambodia. So there have been a series of indictments now of both federally and at the state level in New York of people involved in one way or

another with the lash Ford operation. And in last for himself was indicted on fraud and h conspiracy charges by SDN Y and that really signaled that there was this extremely serious law enforcement effort underway. However, a latch for I had about a year after that indictment. He was very sick at the time, eighty eight years old and never went to trial. I feel like there are three key players in your story, and we've covered um Douglas Latchford.

There's the individual who helped him and digging up and you know, finding they aren't getting it out of Cambodia. There was also an internationally connected attorney that the U. S Department of Justice turned to, Brad Gordon. How important was he in kind of helping figure this all out? Brad Gordon is a really crucial character in this narrative and and is really a remarkable character. He is an

American lawyer. He's lived in Asia much of his career, had lived in Cambodia for over a decade now, and he was hired by the d J about ten years ago to begin investigating some of these thefts on behalf of the US government on the Cambodian side, and Brad really became obsessed by it, totally hooked on the challenge of figuring out where these objects were taken and uh

and how they might be returned to Cambodia ultimately. And in that effort he found a really crucial witness, a Cambodian man named talk Tick, who actually Brad referred to with a code name Lion uh and Lion it turned out, was a master looter, an extremely prolific looter, and someone who helps Brad and measurably put it all together. Alright, that last voice Matt Campbell, Asia editor for Bloomberg Business Week. He joined us from Singapore Morning, Our time, Night, his time.

It's his story, he wrote it. It's for the annual Heist issue, which comes out every summer. And Katie, it is just a great summer read. Just these all these kinds of theft stories, intrigue, and Matt tells a tale like no other. End. I'm just waiting for this story to be on Netflix or Hulu or you know, one of the streaming channels, because it's pretty incredible. All Right,

you're listening to Bloomberg Radio. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio, July four, Holiday, just around the bend. So we're talking hot dogs, hamburgers, we're talking fried chicken, trip macaroni salad. That's what my mom used to make when we were growing up. In fourth we had Fourth of July. Um, we're gonna eat probably some different things, Katie, but safe to say that we're all going to probably pay a

bunch more for it. So let's get to it and see what our next guest has to say about that. Carol Flynn is ag tech analyst at Wells Fargo. She joins us on the phone in California, and Carol is good to have you here with Katie and myself. So tell us a little bit about the pain points that we're going to face this Fourth of July when it comes to what we eat. Well, thank you so much for having me. Look, um, it's it's absolutely a pain point.

Food price inflation is hitting everybody's wallets. Um, and we wrote this uh research just to figure out where that pinch of inflation could be potentially solved by finding relative value and more palatable price points. And so what welk us through some of those relative value plays. Feels like I'm talking about stocks here, but when it comes to food in particular, I mean, one are the substitutions that one could make if they are trying to host a

party and not you know, pay a fortune for it. Well, that's a great question. What you know, it's year over year in food price acceloration that we're looking at here, and the substitutions are truly going to be um, things like what else can we put on our grill? It looks like brisket is going to be more affordable than try tip this time. Maybe if you're gonna stick with the hamburger patties, take a look in the frozen food section, anything that's sort of had shelf stay, book stability, or

frozen foods versus perishable. You're gonna see some specials out there and some loss leaders. Um, it's gonna take a little more effort to make sure this is um the price, the budget is taken care of, all right, Carol Kate is already weighed in because I'm not gonna eat shrimp and port tacos. I heard that there are so many argans in the produce department and you don't have to have that. That's I mean, that's the beauty of the

American food and agricultural system. I mean, we have an incredible, incredible glossy of foods available, but are shrimp taco is actually cheaper this time around? The reason we brought up shrimp is actually shrimp prices have not increased over the last five years, but you look at the other proteins on the grill and they're looking at twelve or fifteen percent year over year increases. So again all about relative value.

So we'll see the shoppers looking for relative value. If shrimp is already on your grill, you may have more of it this time. If there's something else that you like, um, then you're going to be maybe looking for substitutions in the frozen case or some new innovative menu items. Sp Uh, No, I don't. I'm gonna say shrimp prices probably haven't gone up because it's a weird food. It is that a

weird food. It's a great food, weird texture. Not a fan, but in any case, I also want to talk about alcohol, because personally I don't really like beer, more of a white wine gal, but a lot of people drink beer and other beverages at the fourth of July. What's the

outlook there. It does look like some of the higher priced beverages in the beer case are up, and we're already seeing demand flow to the domestic um super premium brand, so people are already making a change, and the white wine and especially killed white wine is still out there and there's some great, amazing brands that are at lower

price points. If you're still looking to still you know that, you know, to prepare with a really nice wine, you're gonna be okay, okay, all right, So talk to me too about veggies or things like avocados between have been expensive. We've talked about shortages. I feel like over the last year or so, where are we on that? Well, Avocado shortages is another story altogether. You know, most sleep supply chain,

there's always a perishability issue and weather driven issues. Um, but California avocados are just about to come into season, into the peak of the season. To look for your in your protest department again, seasonality is going to drive a lot when their tired supply. You're going to see prices get moderated and things move quickly. It's very dynamic space in the in the protest section. So, um, talk

about sort of weird textures. People talk about that with avocados, but once you are a fan, it's usually a lifetime issue. So are you saying they're expensive but they're around No? I actually think that prices are going to come down because we're gonna better supplies because we're coming into the California. See this avocados. Actually, I am not in avocado every single morning, half of all, not an entire avocado left the record. Should it's so healthy for you, so healthy.

I'm glad to hear it, Carol. We only have about thirty seconds left, but we've covered the main course, We've covered beverages. What about dessert. What's the outlook there? Well, I think he might want to look at some of the non dairy alternatives. I'm a big fan of the real milk people, so don't forget the real live cream. But it does look like those are those price futures gonna be up substantially. I like a hot fudge Sunday on my July four I'm just gonna say it, and

a little bit of watermelon as well. All Right, we're gonna run um. Have a great holiday. Esay holiday, Carol Flinch's ag tech analyist over at Wells Fargo joining us on the phone in California. I'm robbing journal. Yeah, but you let me drive? Oh no, no, no, no, who's right? Please? I'll ravels. I want to drive. It's a good question that drives in the drive to the globe. Well up, jog down on Bluebird Radio. All right, just about eleven

minutes left in today's trading session. We have been bouncing around. Slight gain on the Dow, as you just heard from Charlie, a little bit lower on both the NAZAC and the SNP. So off our highs and lows of the session. Talk about searching forward directions, So let's get to it. Uh. Delighted to have with us Stephanie Pierre. She see of Dry Fus Melon and E t S for B and Y Melon Investment Management. She is in our Bloomberg Interactive Broker Studio with Katie, and she and I were in

Dallas at B and Y Melon Purging Insight two. We talked about a lot of things, including the future of money, which we'll get to in just a moment. But Stephanie, so great to have you. How are you great to see you. It feels like it was just a week or two ago that we're on stage together. Yeah, it was just so I felt like it was so forward thinking about you know, kind of our discussions. But let's be present right now and as we look at this market,

we talked about volatility in that panel. Uh, we continue to see it here in the market environment. What are you seeing in terms of fun flows? That tells you about what investors are thinking about right now, you know, Carol, it's really powerful to see the fun flows ETFs this year. You know what I think it tells you is markets go opper down. But ETFs are still the vehicle of

choice for investors. As of the kind of May kind of month end, we were almost two hundred sixty billion in e t F net inflows here to date, and that just tells you that that's only going in one direction. And I mean beyond that, beyond the inflows you're to date inflows that you are seeing, I mean, what are the trends within that those flows, because it feels like

it's pretty broken apart. Well, it's interesting, surprisingly, with all the volatility and equities that Carol mentioned, we're still seeing very significant flows into equity e t f s. That was about billion of the two D sixty billion, And within that there's definitely some more defensive um trends. Right So you're seeing healthcare ETFs take a lot of the flows they're relative to some of the more cyclical areas

like financials and technology that have been in outflow. Um. The other piece that I would mention though, is the continued growth in fixed income in cash like e t F product, which was another fifty billion inflows, and of that about twenty five or half of it billion of

it was an ultra short ETF. So I guess the short version of that is that you know, cash and fixed incomes sort of plain vanilla yield oriented product are really going to start to give more esoteric yield vehicles a run for their money as you continue to see rates creep up. Well, that's actually what I started to

jump in. But that's something that I've been thinking about a lot because I was looking at some of the ultra short duration cash like e t s and they're actually starting to pay dividends, pennies, but something they are.

And if you look at where we are today, right, so we're coming up on another FIT meeting in you know, the end of July, markets are pricing in a seventy percent probability of seventy five basis points, and then if you fast forward to the end of the year based on what you know is being priced in in terms of fat action. We could be at three three and a half percent just in a cash like product, and then you go out the curve a little bit you

get more than that. Right, that's pretty interesting. I would go as far as to say it's pretty sexy relative to you know, the liquid alts and the other esoteric products that people have been using to get yield. You may not need to do that actually get an in vanilla fixed income. So sexy because you know, at this point we talk a lot about capital preservation, Stephanie, and that's really kind of what investors need to be thinking about.

That's exactly right. I think investors not only cyclically, Carrol, but also demographically. Right, the search for yield is not just because we haven't seen three percent on money markets or cash product in ten years. It's also because we have an aging demographic in this country that need that

more structurally for their lifestyles. So giving an idea in terms of Stephanie and market cycles, like you know, we've talked about that it's typically about eight months between when the Fed stops raising rates to when it starts to cut rates, which is a short period of time. Markets are forward looking, right, I mean, how what are you looking for when you get an idea that this maybe down market cycle is on the equity side of things

is coming to an end. Yeah, look, I mean you know, sometimes we joke about the perspective any of us how on markets is probably worth the price of a cup of coffee. That being said, um, I think you know our view is that you know, the real question is around inflation, Carol, and that's really what the markets are focused on. That's what people are looking at in terms of earnings and multiples and what's really going to impack the equity markets as well as psychology as well as

whether people are employed and continue to spend right. So, if the Fed strikes the right balance where we know the FED is behind the curve on inflation, if the Fed can strike the right balance, then I think you'll see market stabilized. J Powell thinks he can, Wright, Katie, we heard this from him today, but he's not he

thinks he can. So Stephanie, how how comfortable do you feel in an environment that we're coming off of that we've never lived through before, that you think the FED can get it right because they are going to be aggressive. We know that they're definitely going to be aggressive. You know,

it's interesting. You may be familiar with our chief economists, Vincent Ryan Hart was a former FED official, FED watcher par excellence, and certainly I think Vincent is talking about a fine balance here in terms of not turning this into a recession. But it's a very tricky balance given how behind the feed has been on a relation. So look, they have to get it right for us to continue the upward trend that we've seen over many, many years

in equity markets. Um. But um, you know it's gonna be It's gonna be a really interesting market to watch her for the next few months. And I'd love to broaden this conversation a little bit and talk about crypto. I know that you were on really riveting peril with panel with Carol in Dallas. I wasn't there, you guys, but you should have been because it was really smart. Um. And so let's talk about you know, Stephanie. I loved it because we talked specifically about you know, what's what's

the future of money UH? And we had Matt Walsh UH, founder of UH, finding partner at Castle Island Ventures. We had Matt Hogan as CEIO at bit Wise. I mean you guys really came in it from different perspectives. They are in on the crypto world, but said, we were very early in. How do you guys at your company think about where you need to be in this space? Sure, well, from a broad perspective, bing Y Melon seeks to be a leader in the digital assets space. As you know,

we're a leading custody bank. We're really in all parts of the cash ecosystem, and as our clients look to us for digital assets solutions as a place to keep their money, or trade their money, or manage their money, we want to be a leader there. So that's kind of the short answer. Now, what does that really look like?

It's going to go? In different stages? Right, the regulators have a key role to play, and I think what we saw Carroll after you know, some of the crypto events and the dislocation that happened a few weeks ago, is that the regulators are going to come in and provide some standards, particularly as relates to you know, the reserve management underneath um some of these cryptocurrencies and stable coins, which I feel like you guys all welcome that idea

that we would get some regulatory over. So it has to happen. There was too much white space here and I think that plus, as the guys on the panel pointed out, there was a lot of leverage as well as just not a lot of regulation, and that created some of the outcomes that we have. I mean, the reality is the recent people have confidence in traditional currencies is because there is a fully transparent, fully liquid hard currency backing in reserve management in every single central bank

around the world. And that wasn't the case in table coin, and it needs to be well, talking about crypto, talking about regulation, talking about e t F. So let's wrap it all together, because there's a very important SEC decision coming on a gray scale application to convert their bitcoin trust into an e t F. I gotta ask, I mean, is a spot physically backed bitcoin e t F going to become a reality sometime soon? Well, if you hadn't

said soon, I probably would have said likely. I think the question is when right, clearly investors love the rapper that they're comfortable with the liquidity, the transparency, the way it works in the pipes of every advisor and recail investor in this country. That's why this is so attractive. Having said that, as we just talked about. It remains to be seen how the regulators will UM really standardize some of the components I mentioned right, whether that's transparency, liquidity,

reserve management. And until that's in place, I think you'll see this UM probably take a little bit of time, doesn't mean it won't happen. I think the direction of travel is clear that, even be on the underlying of that specific instance, the idea of blockchain and digital ledger is here to stay. It's just a question of what not if. All right, Stephanie, I'm so jealous and not in studio with you. You have to promise to come back when I am COVID clear. I mean, I'm negative everybody,

but they're just still quarantining me. UM. Because I loved our conversation and I want to continue with you, Stephanie Pierce. She's chief executive officer of Dreyfus Melon H and E. T f s over at B and Y Melon Investment Management, joining us in our interactive broker studio. I highly recommend you go back to the Insight twenty two conversations and check out our panel, which was all about reimagining the future of money. Thanks for listening to Bloomberg Business Week.

Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News