Bloomberg Opinion

Elon Musk’s commitment to Tesla’s Robotaxi-driven future made me think about the type of organizational culture that Tesla needs to ensure that its self-driving cars are as safe as they need to be. Physical safety requires psychological safety, because only when employees feel free to speak up can you fix all the problems that lead to safety issues. What’s more, safety and financial performance go hand in hand. Boeing used to be legendary for its safety performance, but when it abandoned psychological safety in the pursuit of short-term shareholder returns, its safety collapsed, and then its stock price followed. Alcoa, on the other hand, under legendary CEO Paul O’Neill, vastly improved its safety—and saw its stock price go up by a factor of nine. Although Musk often talks about the importance of speaking up at Tesla, he often seems to stifle disagreement and punish dissent. If he doesn’t want to take the same path Boeing did, Musk needs to change his approach. 🔗 Read my column on Bloomberg Opinion on why the culture produced by Musk’s leadership style may be the greatest threat to Tesla’s future: https://lnkd.in/e_qhZuq6 🎥 Or watch the video version

Are you still planning a European summer? With US airlines and hotels bearing the brunt of Trump’s trade policies and declining consumer confidence, the dream could be over this year for many Americans, says Andrea Felsted. See the latest data: https://lnkd.in/ecdBiTFv

This is a bad week for Israel, and by all appearances that’s just fine with the US president. Like the former reality TV star that he is, Donald Trump has choreographed several plot lines to send a single message: He will do whatever he thinks will redound to his own glory, even if that means freezing out Benjamin Netanyahu. It’s hardly a coincidence that Hamas, the terrorist organization that Israel has been pounding in the Gaza Strip since October 2023, released its last living hostage bearing a US passport just as Trump set off to the Middle East on a trip that includes three Arab countries but conspicuously omits Israel. In March, his administration had rejected a similar offer from Hamas, deferring to the Israeli fear of being cut out of the negotiations and disadvantaging the two dozen other hostages still believed to be alive. This time, the US didn’t care. It was a similar story last week, when Trump abruptly announced that the US would stop bombing the Houthis in Yemen. “We hit them very hard,” the president said. “They gave us their word that they wouldn’t be shooting ships anymore, and we honor that.” Left unsaid was that the Houthis had just fired missiles at Ben Gurion Airport near Tel Aviv, and that he hadn’t consulted the Israeli prime minister. Trump also blindsided Netanyahu in dealing with Tehran.... (Read the whole column with the gift link below) Bloomberg Opinion https://bloom.bg/3F8A1nC

California has a love-hate relationship with Big Oil, being both at the forefront of environmental policy and a huge gasoline market. That tension is coming to head if Governor Gavin Newsom’s recent letter to the California Energy Commission is any guide. In it, he calls on state officials to extend an olive branch to oil refiners. It’s a marked departure from Newsom’s earlier accusations that refiners are gouging California’s drivers. But it’s tough to argue that refiners are making excessive profits when so many are closing down. In part, this reflects a wider challenge of the energy transition, as fossil fuel assets reach economic obsolescence before they reach physical obsolescence. But it also reflects California’s peculiar politics and geography. A big swing in the Latino vote in November, in counties where people drive long distances to work, could be an important factor here. This piece is a JV with my colleague Erika D. Smith. Read it here at Bloomberg Opinion https://lnkd.in/ewcEb-jK

Trashing the environment to pay for tax cuts is the fiscal-policy equivalent of having a violent loan shark spot you funds for an unaffordable Fifth Avenue shopping spree: It might feel good in the moment but will cost you dearly in the long run. To help pay for President Donald Trump’s plans for a $4 trillion tax cut, the House Ways and Means and Energy and Commerce committees this week offered proposals to save hundreds of billions of dollars in government spending by derailing the clean-energy transition in the US, including essentially repealing large parts of the Inflation Reduction Act, the biggest climate law in US history. But any savings from such a move would be swamped quickly by its costs. Those include not only the big-picture dangers of global heating but also higher consumer power bills and the economic fortunes of voters in many Republican districts. Gift link to my column for Bloomberg Opinion https://lnkd.in/eZpM56ZS

BlackRock’s investors get their say on the firm’s executive pay this week. The “say-on-pay” shareholder resolution received a big protest vote last year. The coming poll will be a verdict on whether BlackRock's done enough to address the key concern: poor disclosure of how it calculates bonuses for CEO Larry Fink and key execs. Proxy adviser Glass, Lewis & Co. reckons BlackRock’s remuneration reporting is now “adequate.” Rival ISS STOXX remains unconvinced, and you can see why. BlackRock’s pay committee has provided bullet points and narrative under sub-headings detailing the metrics used. But shareholders don’t know the weight ascribed to these categories, nor, in most cases, any quantitative benchmarks. In BlackRock’s defense, 2024 was a fantastic year for the firm. Five-year total shareholder returns beat the S&P 500. And it’s good that BlackRock sets pay using non-execs' judgement rather than slavishly following a crude formula. But BlackRock’s the industry standard setter and its board could better justify its conclusions on pay. Read my recent column at Bloomberg Opinion: https://lnkd.in/eZWKbhkt

Markets may be up, but will they pass the Bobby Ewing test? That’s John Authers’ big question. Read today's installment of his free daily newsletter Points of Return: https://lnkd.in/eKrVvSeX

Here's a question facing potential suitors for bp. When an asset is likely to attract competing bidders, is there any advantage in being the first to make an approach? Or is it better to wait until someone else has put a price on the table, and then beat it? The UK oil major is vulnerable to takeover due to a slide in its shares and stake-building by activist Elliott Investment Management L.P. Earlier this month, Bloomberg News reported that Shell is working with advisers to evaluate a possible acquisition, while waiting to see if BP’s share price falls further or if another bidder goes first. The likes of ExxonMobil, Chevron, TotalEnergies and ADNOC Group have also reportedly run the numbers. There's often a first-mover advantage in M&A. Just by getting your target to agree terms, you may make any lurking counterbidders lose ambition. But BP is an intensely political situation. The aspiring buyer that goes first will likely stir controversy. As for Shell, it could uniquely position itself as the British "rescue" bidder if it chose to react to, rather than make, the initial strike. Read my latest column for Bloomberg Opinion here: https://lnkd.in/dnakKAfx

COLUMN: The chain-smoking protagonist of Landman, the American television drama series about the Texas oil industry, puts it better than anyone else: “You want oil to live above 60, but below 90,” says the fictional Tommy Norris. “Seventy-eight dollars a barrel, that’s about perfect.” In real life, prices are far below that “perfect” level. "The impact is starting to be felt in Texas and beyond: Shale companies are trimming spending, announcing they will reduce the number of drilling rigs and fracking crews they employ. [...] At current prices, US shale oil output has probably peaked. Just don’t expect a rapid decline like the downturns of 2015 and 2020; the most likely trajectory is an undulating plateau." Bloomberg Opinion

Want to invest like Warren Buffett? Try Japan. The Oracle of Omaha recently revealed not only the surprisingly simple inspiration behind his purchase of shares in five Tokyo trading shares now worth $25 billion, his largest overseas investment. But he also showed a view of Japan that's surprisingly bullish -- and one more should know. My latest for Bloomberg Opinion, free to read for the next week: https://lnkd.in/g5XvJWTs