In today’s dump we’ve got Elon Musk back in front of the Delaware Chancery Court, Ford asking the feds to be loose with EV rules, a clarification from American Axle, and some interesting results from a British auction.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Tesla Has To Explain Elon Musk’s Weird Package
I’m getting kinda sick of Elon Musk being all over the timeline and I’m clearly only making it worse by writing this, but it’s important and in a week everyone’s going to be talking about it so we’re all just going to have to get through it, together.
Next Monday, barring any shenanigans, Elon Musk’s team is going to have to go to the Delaware Court of Chancery (a real thing) and explain to Judge Kathaleen McCormick why it’s ok for him to approve a giant payout to himself even as he seems to control the board. If you were curious, Judge McCormick is the same judge that essentially forced Elon Musk to buy Twitter.
Why can’t Elon Musk just pay himself whatever he wants as CEO of Tesla? Because it’s a public company and minority shareholders, one of whom brought the suit, argue that the CEO of the company and his buddies have a fiduciary responsibility to carefully consider if the compensation makes sense and didn’t do so in this case, which resulted in “the largest compensation grant in human history” according to the filing. I’m not sure how they can prove that but I can’t think of an alternative.
Of course, shareholders voted and approved this compensation package.
From a Yahoo! article about the case:
At its heart is the issue whether Elon Musk can be considered a controlling shareholder on both sides of the transaction—as chairman of the board owning a 22% stake at the time, as well as the beneficiary of the package. If he were, the deal would be considered a conflicted transaction subject to different governance rules.
“Musk’s problem is that he has close ties to a lot of directors,” said Tulane University law professor Ann Lipton. “If you are deemed to be a controller, conflicted transactions cannot be cleansed with a shareholder vote alone. You also need a disinterested and independent board committee, and a more formalized process, which wasn’t followed here.”
Clearly, Elon Musk is solely focused on making sure that Tesla is a success and his compensation is therefore fair. Clearly, clearly, nothing else is distracting him at the moment and he isn’t out begging Stephen King for $8.
Ford Asks Gov’t To Be Cool With EV Rules
The new EV tax credit rules, which were written to encourage automakers to move away from an over-reliance on certain countries, have not been met with enthusiasm by most carmakers.
Now Ford is asking for a little leniency in the interpretation of those rules, according to this report from The Detroit News.
In comments submitted to the Treasury Thursday night, Ford said it supports the goal of strengthening local and ally-based battery and critical mineral production. But “an overly expansive interpretation of this provision risks undermining that very same objective by making the clean vehicle credit largely unavailable.”
The list of foreign entities of concern includes China, Venezuela, Russia, Iran and others.
Ford urged the Treasury not to disqualify joint ventures with non-U.S. partners that aren’t from a listed country; non-U.S. companies that aren’t organized in a listed country if it’s less than 50% owned by a listed country; and any U.S.-organized company regardless of owners.
There’s always a balance here. These requirements are going to make EVs that would otherwise qualify for an exemption more expensive in the short-term. In the long-term, creating an alternative supply chain should lead to cheaper EVs.
Is American Axle Actually Available?
Last week we shared a report about American Axle allegedly being in talks to sell to a larger conglomerate. Today, American Axle put out a press release to essentially say not so fast:
While our long-standing policy is to not publicly comment on market rumors and media speculation, we feel it is important to state that we are not engaged in any discussions to sell the company and that we are not otherwise for sale.
In the ordinary course of executing on our strategic plan, we continuously monitor market conditions and assess industry developments and we regularly consider strategic opportunities that serve the best interests of the company (including our customers and associates) and its shareholders.
The story we cited was from Bloomberg and, since Bloomberg is usually pretty good, this brings up some interesting hypotheticals:
- There were some early discussions that didn’t go anywhere and Bloomberg was just riding the chatter.
- AAM’s press folks are being careful with their language and the company is not for sale but a merger is what’s actually coming.
- AAM really isn’t for sale and Melrose Industries (or someone related), which is publicly traded, was out to create a little buzz based on some discussions they had.
We don’t know the answer so we’ll just have to wait.
What Happened With The RM Sotheby’s Auction Market?
There was a big RM Sotheby’s car auction in England over the weekend and the results were fairly interesting. It should be remembered that RM is coming off of a world-record week at Pebble Beach where the company moved almost $240 million of cars.
The most surprising sale was of Freddy Mercury’s 1974 Rolls-Royce Silver Shadow, which was expected to bring in £30,000, but actually sold for £286,250.
Almost as surprising was the non sale of three modern-classic supercars:
- A white 1996 Bugatti EB110 Super Sport (Bid to £2.2 million, below £2.5 million low estimate)
- A 1985 Ferrari 288 GTO (Bid to £3.0 million, short of £3.25 million low estimate)
- A 1995 Ferrari F50 (Bid to £2.8 million, short of £3.25 million low estimate)
What’s going on? Are these Rad-era exotics not as interesting anymore? Given that a 1984 Lamborghini LP5000S and a Ferrari Testarossa Spider concept sold for above estimates implies that’s not the case.
Hagerty’s UK Price Guide Editor John Mayhead has a couple of theories:
“It was undoubtedly one of the most impressive collections of modern classic performance cars ever seen at a UK auction. There was some hesitation from buyers, possibly because these are mostly cars that have been regularly used rather than ‘lock away’ investments, but it could also signal a slight reticence on behalf of UK buyers for the many right-hand drive cars.”
I tend to prefer cars that were drivers, but that’s just me.
The Flush
What’s your biggest used car no-no? Obviously, most people on staff here will buy a car in any condition, but let’s assume you’re smarter than us.
Biggest No-No?
I’d probably have to give a hard pass on any Porsche, Audi, or Lambo that was on the Felicity Ace cargo ship that sunk off the coast of Azores in March 2022. Too hard to get that mildew smell out.
On awd cars, I always look at the spare. If it has noticeable wear, I nope out unless the price is an absolute steal: if driven far enough to wear the spare, whatever differential the car has may well have sustained damage as no one keeps to the <50mph/limited mileage use-case for spares*. Which are often (usually in my experience) under-sized.
*when I popped a tire in the snow a couple years back I went home no faster than 40, and also slow & straight to tire shop on Monday. Cringing the whole time:I have a vivid imagination-and every little noise was my LSD grenading
Beyond the obvious red flags: fire damager, rust held together with paint, fluids on the ground. I have:
– Reports a Excellent except for rot, blown head gasket, a list like Ecto-1 being brought in.
– No lowballzers, I know what I got or aggressive posts.
– Unwilling to let a test drive happen.
– Too good to be true.
– A 12ft plastic Santa statue up in July (Guilty)
Yeah the people that try and tell you that you need to come get it RIGHT NOW because there’s 5 other people that want it. Bullshit. If 5 other people wanted it, it’d already be sold. Speaking of ‘aggressive posts’, I even saw one that called out that they would refuse to sell to anyone who voted democrat, and ended up with 3 paragraphs of a MAGAphesto in the for sale post. So cringey.
Immediate no-no is right hand drive.
Elons weird package.
£30.000 for Freddy Mercury’s Rolls sounds really low so no wonder it went for much higher.
I’m also pretty surprised by the low auction estimate on that one. If I win the Powerball jackpot, I’m totally going to give the new owner of Freddie Mercury‘s a hefty offer over the winning bid!
Red flags for me are if they couldn’t spend 20 minutes cleaning the interior of the car. Doesn’t take that long to vacuum and clean the hard surfaces. If the exterior looks like it has been washed recently I can give it a pass on some surface dirt.
Also I take a look at the house or car lot. Is it generally neat and tidy? Good sign.
Agree. If you’re trying to sell a car, spend 2 hours washing it and cleaning the interior, wipe everything down. At least make it LOOK like you cared about it. Posting photos of the interior full of trash and fast food? FOH.
Squeaky clean engine bay… you should just walk away.
If the engine was dirty enough they wanted to pressure wash it, then it’s most likely got some serious leaks, which suggests lack of maintenance.
Mismatched tires is another one.
….what?
I literally just got under the hood in my car detailed a couple weekends ago. It’s a Prius, but dammit I want it to “feel” nice. Plus there’s so many leaves in my apartment complex that they tend to magic themselves into the engine bay somehow.
I doubt I’d ever judge a vehicle based on being “too clean”.
Mismatched tires should only matter if it’s 3 or 4 different types, right? If front and back are cleanly split, well, my car’s handled the same from when it came like that when I bought it used and when I replaced all 4 at the same time. No issues then or now.
I clean the engine bay of my car usually once every two to three times I wash and clean the interior, and I wash it every week or two in the summer. I don’t pressure wash it, but I still wipe down the strut towers, rad support, intake manifold, bottom of the hood. Why wouldn’t you?
Depends on the car. If it’s a daily driver and the engine bay is cleaner than the car, I agree. If it’s a collector car and everything is really clean, except the engine bay, that’s a hard pass for me.
One interesting thing I learned about buying a car was actually from selling one. After 14 years of Toronto winter roads, my car finally rotted out in too many places. My mechanic basically advised me it wouldn’t be worth repairing. He said I should be able to get maybe $1000 for it. I looked around some listings and found that to be close to others being offered. I decided to check with the dealer I was buying my new car from to see what they’d do on a trade. I brought the car in for inspection and included all of my service receipts. They got back to me and offered $2000. The following day, I got a call from the mechanic at the dealer who had done the inspection. He said the dealer was allowing him to personally make me a better offer and offered $2500. Cash. When I asked him why, he said that everything that needed doing, he could do himself and he could tell from the inspection and receipts that I had taken good care of the car, so it was worth more than the comps I would have seen.
I suppose my big used car no-no is buying a used car at all since I’ve never done it. My grandfather used to say that “When you buy a used car, you buy somebody else’s problems” and I have enough problems of my own that I don’t want to buy someone else’s. That said, automotive technology has come a long way since my grandfather’s day, and used cars frequently have a lot of life left in them, so a used car is no longer a one-way ticket to misery anymore.
If I were to buy a used car, aside from having it looked over by a qualified mechanic, my big test would be smell. Is the owner a smoker? If so, forget about that car. Even if he claims to never smoke in the car, you’ll get a whiff of that horrible cigarette smell eventually. Does the car have one of those little tree air fresheners dangling from the mirror or one of those little jewel ones clipped to the vent? Walk away; you don’t know what horrible odor it’s trying to cover up, but it’ll hit you eventually. Does it have more than one air freshener? Run away.
Yeah, I think there’s definitely a balance of money saved vs. inheriting someone else’s problems.
I bought a ’12 Prius v a few years ago at 116k miles and aside from an inverter problem that Toyota repaired at their own cost (known issue), it’s had zero “non-road-hazard” issues.
Of course, wish I’d done my research on the known potential head gasket issues for a range of model years including ’12, but I think that’s on me for not doing my research.
In Houston the biggest concern with used cars is any flood history at all. I tried it once, it was a nightmare, no matter how handy you think you are with a wrench you can’t keep up with flood gremlins.
If the car has been in a flood it’s an instant no. R-titles are immediate red flags and almost always lead to the reject pile, but I’ll dig into the details if it’s a car I’m really interested in.
For older cars, when was the timing belt last changed? The owners either know, or know that it’s on the sticker on the timing belt cover, or I can look at the timing belt cover and see. If they don’t know, and there is no sticker, that’s a huge red flag for me.
Scary to think of the number of times I’ve asked about timing belts/chains just to have someone look back at me with a blank stare and stammer “uh, yeah, sure that’s been done…(whatever that is)”
Biggest used car no-no? Disassembled.
I’ve done it. I don’t recommend it. I like to think I won’t do it again.
Like to think is a nice way of saying you probably will. I’ve done the same. I need to learn some lessons multiple times and so probably will again.
No, let me cherish my deeply delusional hope of self-improvement for as long as possible. I mean, I’ve owned that first disassembled car for well over thirty years and I’ve only bought one more since then. I’m sure I’ll get back to reassembling both of them any day now…
Besides the tires, I check the oil and air filter. If the oil smells burnt and is dark black, that’s a bad checkmark. If the air filter is filthy dirty, that’s a bad checkmark
Is anything that is either expensive or a real PITA to fix acting dodgy, does it smell like cigarettes or cheap air freshener, is there undisclosed crash damage that can be readily sussed out, and are any emissions codes pending. A scammy move here in NY where an OBDII emissions scan is required for inspection is to reset the CEL right before a mark arrives to look at the car. NY will fail inspection for pending codes as well as having a lit CEL. Following CA emissions standards means some of those fixes can get into 4 figures quickly due to only certain emissions parts being allowed to be sold to NY addresses.
People have been texting me lately like “man Elon Musk sure seems like a jackass!” and my response has been “…seems like? Where have you been for the last 10 years?!?”
I feel like he’s currently at the “Dearborn Independent” stage of the billionaire cycle, and speedrunning to the Kleenex-boxes-as-slippers phase.
Personally, I prefer fluids to stay where they’re meant to, so I look for leaks on the pavement and how wet with oil/atf/coolant/etc the undercarriage is.
They really should’ve let Elon back out of the deal and not buy Twitter.
Of course, he can always sell it, right? What would stop him from buying then immediately selling?
No one else on Earth thinks Twitter is worth $44 billion.
So it’s either stick it out and hope for a turnaround, or sell at an immediate 11 figure loss. Neither is very promising.
Worth pointing out here that even _he_ didn’t think it was worth $44B either, and tried hard to get out of the deal for quite a while.
I seem to remember him signing a contract to that effect. He could have backed out and paid whatever costs were associated with that. Twitter was circling the drain anyway, so Musk shouldn’t have worried about having to silence it.
Moisture/mud in the interior? “Bizarre” electrical malfunctions? Water trapped in connectors? Serious rust? Interior stinks? Title issues? Car crabs (doesn’t track straight)? Uneven ride height on flat? Mismatched wheels / tires?
Nope.
I can’t rank any 100% nope higher than the others, and there are more than I’ve listed.
Never buy a Nissan with a CVT, a ford with a power shift DCT, an 8 speed GM trucks or anything with the triton series of engines. of course the 2017 and newer frod 4 cylinder turbos, and the GM VVt 3.6 are also hard no’s.
You left off any Hyundai/Kia with a GDI engine.
Hold on a second….including the 4.6l Triton? Or at least certain variations of it?
I had a ’97 E-series conversion van from 97k miles to 163k miles, and I have to say, for as “uncomfortable” as the engine sounded going up hills, and the MANY mechanical problems that van gave me, never once did I have an engine problem.
And I would *guess* there’s a legion of Panther body owners who’d back me up?
Really, the bad Triton engines were the 3v versions. The 2v & 4v engines were OK.
I’d any German V8 to the mix of engines to avoid as well as any Northstar.
Never buy a car that was warmed up before you arrive. “Oh, I had to move it to get it out” does not bring it to full operating temperature. A warmed-up car is a huge red flag.
I once stopped by a used-car place on a main highway, sometime in the mid-00s. They were warming up every car on the lot. Said they did it every day. OK then, have a nice life.
I’m definitely uninformed here…what issues could get “masked” by the cars being on or warmed up recently?
My lifetime total of “cars I’ve purchased myself” so far is one, and it was from a dealership, used. Nothing’s exploded so far.
Rough cold idle, hesitant start, clogged fuel system, fuel pressure regulator/regulation, smoke of various pretty colors, sticky syncros and on and on….
Of course that goes out the window when meeting at a mutually agreed, public location, as is perfectly reasonable for online sales.
Conversely, if you’re selling a car that likes to vibrate, meet the buyer somewhere so that you have a good excuse for having driven the car there.
I specifically ask any seller not to start the car before I arrive. If I then arrive and the car has been warmed up, I leave immediately.
Never look at a car you’re thinking of buying at night or in the rain.
Of course, I HAVE looked at and bought a car at night, in the rain. Turned out great. So YMMV.
I traded in a car once at night in the rain. It was nicely waxed, but had hail damage all over the car. The water beads hid it well. Unrelated, it was stalling on me occasionally (every week or so), but never threw a code. Sometimes it wouldn’t restart for up to 10 minutes. It would just cut out, I could be at a stoplight, or going 70mph. My mechanic couldn’t figure out the problem. It was a 97 Lesabre with a 3800, and it was only 5 years old, but had almost 100,000 miles on it. I bet that dealership regretted that in the morning. I think Karma got me for that one though, because the new Alero I bought was just a couple days short of 30 days in the shop in the first year, and blew the lower manifold gasket on the 3.4L at about 40,000 miles.
So Scottish people can never buy a car?!?
They can only buy a Studebaker Scotsman.
Maybe a Highlander?
My big red flag for a used car is the simple fix. If someone wants to sell me a car that “just needs a $50 part” or something, I assume that there is a lot more wrong. Because you usually aren’t giving me a killer deal because of that. It’s because of all the things you think I won’t notice until later.
That’s a great one that’s far too common. “It’s a $20 fix, I just don’t have time!” You don’t have time to spend $20 to make another $1000 on your asking price? Yeah, OK.
Said this to a buddy of mine who was looking at a car. “All it needs is XXX, need it gone. $1000” Bullshit, if all it needed was that part, you’d have done it for $200 and sold the car for $5000 instead.
I figured this one out (before buying) when I was a pimply 17-year-old. Lovely Audi 4000, the guy even had the parts on hand – new CV joint boots. Thank goodness I asked a mechanic before I went any further. Knocking sounds from both front wheels at a quarter turn of the steering wheel…
Often it does just need a $20 part. But they leave out the 40 hours of labor required to reach the part.
Besides the obvious ones like paint not matching, dodgy history, etc, the one I always look at is tires.
-Are they wearing evenly?
-Are they matched all around?
-Are they from a real brand or are they “Golden Lion” or “Ling Ling” or something?
In 20 seconds of looking at your tires I can get a pretty clear sense of the attitude you take toward maintaining your vehicle.
Small Used car dealer here, but I will stretch a bit when buying cars if they have Michelin tires. I figure if someone cared enough to stretch on tire prices, they wouldn’t balk at routine maintenance.
I’m a little confused by the frequent mention of mismatching….If it’s 3 or 4 different tires then that’d be a massive red flag, but what’s wrong with front and back pairs being different?
I would think that’d be an economical way to keep the car on the road while still maintaining “balance”. I could never expect everyone to be like “oh crap, this tire needs to be replaced, let me just drop another $800+ on a fresh set.”
My car had a separate front and back pair when I bought it, but it handled the same then as it does now since I’ve replaced all four together.
It’s not an immediate “walk away, don’t buy this car” type of red flag for me, but it it does invite further questioning as to why.
Some possibilities that aren’t necessarily favorable:
-The fronts and rears wore at different rates because you never rotated the tires. What other simple maintenance items did you neglect?
-You only replaced two tires because you couldn’t afford four. Not a crime to be poor, but what else might you not have been able to afford on time?
-If the vehicle is 4×4 or AWD, have you caused damage to the transfer case by driving around on mismatched tires?
On some of my front wheel drive cars, I’ve rarely rotated the tires. The worn fronts go to the rear when I replace them. That’s pretty much it. I don’t run them down to the wear bars while they’re up front, so they’re plenty good enough for the rear. And with front wheel drive, you always want your best tires on the front.
“And with front wheel drive, you always want your best tires on the front.”
Not correct….FWD or RWD, the best tires should be on the rear to prevent unintentional oversteer.
You’re 100% right. I did over 13 years and over a million miles of driving pizzas almost exclusively in small manual cars, and I didn’t correctly remember how I used to rotate the tires when I had almost no money.
But the point is that with FWD, you can just take the rears forward and buy new ones for out back. Repeat as often as the fronts wear out.
That makes sense. And obviously it’d be hard to quickly or easily distinguish if “well, they penny-pinched and only replaced two tires but have otherwise kept up with all maintenance as required.”
I appreciate the perspective.