Who give a shit what their revenue is. It tells me nothing about how they pay their vendors.
2.5mm in liens is just how much they have proveably shorted construction workers in Texas. It doesn't count other vendors doing work that isn't elegible for a lien, or how many workers got shorted, but it just wasn't enough to worry about.
If you were one of the 70+ businesses that held a lien against them, you would think differently.
> It don't appear to be because SpaceX is having trouble paying.
Having the cash to be paid out, and having the systems in place to pay your bills are two different things.
> I would guess SpaceX are delaying payment as much as possible because it is cheap lending and because it's run as an extremely mercenary company.
Violating the terms of your contract isn't cheap lending. It is fraud. The fact that they are getting away with it isn't a defense.
> Their costs of deliquent payment are likely below their lending costs. So optimally don't pay until the cost of deliquency exceeds lending costs (maybe ≈ junk bond rate per year).
Consistently and intentionally violating the terms of payment is, as noted above, fraud. They are getting away with, and they might continue to get away with it, but mercenary businesses getting away with crime is a bad thing.
Sigh, these rage bait style of responses are as bad as the original article. Reuters was not even able to figure out what % was due to contractors as opposed to Tesla itself.
Everything you said says nothing of how they pay their vendors. $2.5mm is not exactly breaking news for construction projects. Most large projects have some percentage of total project value in liens.
I know we all want to get upset but its too hard to say either way, the dollar amount is far too small, it maybe involve a large portion of contractors and based on the cost of the development does not seem to be a rampant issue.
It could be, also, that they are refusing to pay because they are not happy with the delivery and looking to fight it further in court. I’d say they have real cash flow issues when they stop paying their employees and electricity bills.
>> Most large projects have some percentage of total project value in liens.
I hate to be this guy but please provide a source for this. I’ve been involved in the construction industry for quite a while, almost exclusively on large and mega projects, and “most” of my jobs have not had any percentage of their total project value in liens.
One company that refused to pay for work my (then) company performed is SpaceX. Our work did not permit filing a lien.
My experience with projects and AP in general. ~$2mm across 70 liens without any split between contractors vs spacex is not that interesting. Did not look like they even accounted for a chain of liens based on the same original unit of work. The report came out in 2024 and the count and $ sum was from 2019, so over 5 years including COVID years. During COVID liens jumped quite a bit and on projects that span multiple years I don't find $2mm over 5 years that shocking.
Now SpaceX could totally be stretching their NWC as far as it goes and always paying late on purpose. Really impossible to tell in this style of shock reporting.
I would be surprised in your experience that you have never had cases of a GC not paying on his end and those folks throwing a <$100k lien on the project. Or a dispute between the GC and payer.
There are disputes about payment on lots of projects I've worked on. That wasn't your claim. You claimed that liens were filed and perfected on "most" jobs, and that is not my experience.
And I said that was my experience that liens often crop up and the scale of these were not out of the norm especially on the project size and timeline. After all the project is actively being used and some of these are not purely new construction related. Boo.
I mostly agree with you. I wasn't excusing or agreeing with the behaviour. I was only trying to ponder the amoral financial incentives.
Aside: I think most moral people struggle to even recognise amoral decision making. I also suspect that learning to be more sociopathic can be profitable. I don't much admire most doyens of business. Trying to fight amoral business people seems like a personally losing game because you eventually internalise their tricks.
2.5mm in liens is just how much they have proveably shorted construction workers in Texas. It doesn't count other vendors doing work that isn't elegible for a lien, or how many workers got shorted, but it just wasn't enough to worry about.
If you were one of the 70+ businesses that held a lien against them, you would think differently.
> It don't appear to be because SpaceX is having trouble paying.
Having the cash to be paid out, and having the systems in place to pay your bills are two different things.
> I would guess SpaceX are delaying payment as much as possible because it is cheap lending and because it's run as an extremely mercenary company.
Violating the terms of your contract isn't cheap lending. It is fraud. The fact that they are getting away with it isn't a defense.
> Their costs of deliquent payment are likely below their lending costs. So optimally don't pay until the cost of deliquency exceeds lending costs (maybe ≈ junk bond rate per year).
Consistently and intentionally violating the terms of payment is, as noted above, fraud. They are getting away with, and they might continue to get away with it, but mercenary businesses getting away with crime is a bad thing.