TESLA and the state of NC’s tendency to try and pick winners and losers

 

 

 

Tesla, the electric car manufacturer, is upset with pending legislation in the North Carolina General Assembly barring car manufacturers from selling directly to consumers.  Holy hypocrisy, Batman!

Tesla — a company founded by Bill and Hillary Clinton friends and allies —  has stayed afloat as a result of major subsidies from federal and state governments.  These guys have got NO business bad-mouthing government attempts to get involved in the car business:

Tesla gets $45,000 for each car it sells in state and federal subsidies. The Tesla S starts at $69,000, so about 40% of its total cost is subsidies (Tesla isn’t making any big profits).

Still, I don’t have much sympathy for the legislation pending in the NCGA.  It’s all about government control and “taking care” of major campaign contributors.  Just like the whole online sales tax garbage. 

It’s not just auto dealers who get special protection by the state.  Check out the architects.  Design-build is growing in popularity throughout the construction industry.  Design-build throws out the old model of hiring an architect, who puts together blueprints, then puts said plans out for competitive bid.

It replaces that model with a new system that involves the customer, the designers, and the contractors working together as a team from the beginning of the process to ensure the project stays within budget.  Design-build directly impacts the gravy train for established architect firms with long-standing connections throughout the various levels of government.

State law says  architects MAY NOT hold a state license AND have a financial interest in a general contracting firm.  Architects are also barred from being licensed by the state AND working directly for a general contractor.

State law says architects and engineers don’t have to competitively bid their services to government officials.  The design fee is based on a set percentage of the final project cost.  So, where is the incentive for the architect or engineer to keep project costs down?  Submitting the lowest number at the end of the bidding period is all a contractor has to do in order to win the project.  There is no incentive — during the bid period —  for the contractors to point out errors in the blueprints.   Those get pointed out after the awarding of the contract.

Politicos get to tout an under-budget winning bid to the public.  Meanwhile, change orders get negotiated with the winning contractor — typically bumping the project into over-budget territory and increasing the size of the architects’ design fee.  The architects win.  The taxpayers lose.

Design-build is a proven winner at keeping costs down.  Design-build projects typically come in at 10 to 20 percent of the total cost of similar projects that were competitively bid. Yet, the state of North Carolina continues to protect the architects’ gravy train and ignore a golden opportunity to save taxpayer dollars.

The “conservative revolution” in Raleigh needs to stop coddling and protecting car dealers and architects and the like.  They need to live up to their campaign spin and back government out of the business arena.  Loosen the shackles, and allow people more freedom to practice capitalism and grow this economy.