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From: adonis403 (Rep: 63) reply to luvb2bDate: 02/20/2013 18:36
Forum: Tesla - Msg #599Thread #673503677 (Rec: 0)
Re: just got done with the call. may not satisfy short term traders, but man some...

not sure what the laws are where tesla manufactures, but in cali... overtime rates are 1.5x hourly rate for the first 4 hours past 8 and double time after 12 hrs in a day. so your numbers may be slightly off, depending where they're located. regardless, big savings if they can get the OT hours down. may be more prudent to just hire more workers if demand requires it.

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Reply to luvb2b - Msg #2352334 - 02/20/2013 18:24

just got done with the call. may not satisfy short term traders, but man some impressive accomplishments.

the biggest one to me is the gross margin. when you listen to the things they had as cost factors in q4, it's amazing they had +8% gross margin. the kinds of things they talked about:

* 68 hour work week for production workers in q4. overtime was basically double for people. this is already down to 54 hours and by march they expect mid 40s. to give an idea how much cost this adds:

with 68 hour weeks:
40 hour workweek x $30/hour = $1200
28 hours over time x $60/hour = $1680
total labor cost per week = $2880

with 45 hour weeks:
40 hour work week x $30/hour = $1200
5 hours overtime x $60/hour = $300
total labor cost per week = $1500... almost 50% less!

* had to fly in tires from czech republic. seriously. probably cost them at least $25-40 per tire.

* suppliers price breaks not included at low volumes: for example panasonic gives them price breaks at higher unit volumes.

so when they say they can get margin to mid-teens by q1, that's pretty damn realistic imo.

they were totally confident of being profitable in q1 (i think they mean ebitda). that was confusing a lot of analysts, me included. i can't quite figure out how much margin or revenue they must have to make it to breakeven. but damn they sound so confident.

sounds all good to me, just not what the hot money needs though. a lot of call options probably gonna get vaporized, including a few of my own.
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