Is Elon Musk Turning Into Howard Hughes?
Billionaires with eccentric lifestyles and beautiful women, hounded by the government. It could be a cautionary tale for Musk, whose dreams are bigger than changing the world.
He is very very rich. He has big ideas. He wants to use his wealth to push new technology to its limits and, by doing so, transform the world. He is impatient, demanding, and hell to work for. He is both a genius and a little bonkers.
No, it’s not Elon Musk – although it might well be. It was Howard Hughes., one of the most mind-bending visionaries in American history. With Musk now facing action by the Securities and Exchange Commission that could lead to his losing control of Tesla, his transformational car company, it’s a good time to look at what happened to Hughes as he took the biggest gamble of his life, because there are several points of convergence between the character and experiences of the two men.
Early in 1939 Hughes quietly bought stock in Trans World Airlines, TWA. The airline was struggling financially and its senior managers were feuding over policy. Hughes could pretty much do anything he liked with his personal fortune, but his closest advisers advised against this move. They thought the infant airline business was a basket case. They didn’t realize what he was up to until he had 78 percent of the stock and control of the company.
In 1932 Hughes had made Hell’s Angels, one of the first real blockbuster movies, about the flying aces of World War I. He was an airplane nut. He took a course in aeronautical engineering at Caltech and was a natural autodidact with an intense curiosity. Armed with a fortune from a father whose patented oil drills opened up the gushers of Texas, he set out to make his own mark. In 1939 he sensed that all the technological pieces were falling into place to change the airline business for ever—clearing the way for people to fly around the globe regularly and safely.
All it needed was a person who could assemble those pieces into one airplane. This he did. He chose the Lockheed Corporation to bring it all together. The result was the Lockheed Constellation. By the end of World War II, when the world’s international air routes were open to being developed into a global system, TWA had the sexiest airliner anyone had ever seen, with something of the same kind of aesthetic as a Tesla Roadster, one of those rare machines that conveys a pure sense of its purpose on a foundation of scientific sophistication.
Engineers designed the four-engine Constellation, but Howard Hughes’s hands were all over it, from its slippery, porpoise-like fuselage to the distinctive triple-finned tail. Hughes flight-tested the prototype himself, quickly wearing out a set of brakes and tires with the frequency of his landings.
His crankiness was evident everywhere. During a week of demonstration flights in Washington he ordered a glass of milk and two cheese sandwiches placed in the cockpit for every flight, but never touched them. He had a hotel suite on a separate floor from the rest of the TWA executives. They had to confer with him through the closed door of his suite, through the transom, without seeing him.
The Constellation was a pathfinder. It made record-breaking trips across the country, flying from Burbank to New York in less than seven and a half hours, four hours faster than the previous time, and then to Paris and Rome. Hughes packed the inaugural flights with Hollywood stars.
As a renowned lady-killer Hughes had dated a string of movie beauties, including Bette Davis, Olivia de Havilland, and Ava Gardner. There seemed to no limit to his conquests, both among the women stars and in the new golden age of aviation. (Musk’s romantic life appears to be far less robust: he admitted to being in “severe emotional pain” after breaking up with Amber Heard.)
But by 1960 Hughes was pushed out of TWA, though he retained his stock. He had failed to see the coming of the jet age, and as a result his airline was eclipsed by Pan Am.
Juan Trippe, the creator and imperious boss of Pan Am, was an old enemy. In 1947 Trippe had colluded with far-right Republican Senator Owen Brewster of Maine to try to force a merger of TWA and Pan Am in which Hughes would have been removed. This plot was exposed in a Senate subcommittee hearing when Hughes, playing brilliantly to the cameras, came across as the dragon-slaying independent entrepreneur standing up for his rights. Brewster’s reputation was destroyed, and any political appetite for pursuing Hughes was extinguished.
(Whether Musk has the same charismatic ability to defend and retain his control of Tesla is about to be tested.)
Even though now removed from his airline, Hughes had built a string of aerospace companies with the inventive fertility of Leonardo DaVinici’s Workshop and from which emerged the modern air traffic control system, the first working laser and the first geosynchronous communications satellite, all of which added to his immense fortune.
Sadly, Hughes, the great disruptor of his day, retreated into an ever-stranger and reclusive world and died in 1976.
To be sure, Musk is not going there.
But the board of Tesla, as well as his many fans, were troubled by his two-and-a-half hour podcast with comedian Joe Rogan in California, in which he sipped whisky, smoked weed and led a meandering conversation ranging from the woes of Tesla to artificial intelligence and the end of the universe. “It’s very difficult to keep a car company alive,” he lamented. According to his own account, the 24-hour stresses of trying to fix Tesla led him to taking Ambien to sleep. But those who knew him couldn’t see him submitting to the prescribed discipline of remaining in bed long enough for the drug to work.
Tesla has around $11 billion in long term debt and no profits. In the first half of this year, as the assembly plant began to produce in volume, the company generated $7.4 billion in revenues. That looked good, but there was still an operating loss of $17 billion, and little left to cover continuing operating losses.
Musk has discovered that efficiently mass-producing sedans, even without the added complications of introducing a new technology, is really challenging. And his competitors in Detroit are not shedding any tears. The auto industry has a record of snuffing out independent challengers, behavior that has produced two classic screw-the-innovator movies.
The first, Tucker, The Man and His Dream, stars Jeff Bridges as Preston Tucker, a brilliant but flawed engineer who in the late 1940s produced what would today be called a concept car, the Tucker Torpedo. It was way ahead of its time, with a slew of advanced features, including a rear engine, fuel injection, disc brakes and an attention to safety ideas that Detroit had ignored, including a padded dash, side-impact protection, a roll bar in the roof, a windshield that popped out in an impact and lights that swiveled in a turn to improve visibility in a turn.
The Tucker Corporation went bust in 1950, having produced only 51 hand-built sedans (there never was a production line). Tucker was never adequately capitalized and the Detroit magnates were happy to see him fail. (Well preserved Torpedoes now go to collectors for as much as $3 million.)
The second saga, The Flash of Genius, tells the story of Robert Kearns (played by Greg Kinnear), who invented the intermittent windshield wiper, whose patents were ripped off by Ford and Chrysler. That has a happier ending: after a long legal struggle, Kearns won multi-million settlements from both corporations.
But Musk is a far more formidable challenger of Detroit orthodoxy than Tucker was. Tesla still has a market value of about $50 billion and a car that most people believe is outstanding. Given better management and restored confidence in investors he could still make it. Like vultures hovering over an infirm body, GM, Ford and Chrysler are standing off and watching and learning from his mistakes as, inevitably, they prepare to follow into electric cars.
But Tesla is only part of the Elon Musk vision. The car company is overshadowing the achievements of Musk’s much greater bet on the future, Space X. He has already forced the space industry to rethink its entire business model by developing launch rockets that are reusable.
In February, Space X choreographed a spectacular demonstration in which two rockets returned to launching pads at Cape Canaveral. In doing do Musk was reversing an attitude embedded since the earliest NASA missions—that the rockets required to reach orbit became instant junk, jettisoned as they burned out and fell into the ocean.
That kind of uncaring expendability was common to all three of the major space powers, the U.S., Russia and Europe, and until Musk came along it was never questioned. Each of the rockets used in the Apollo moon missions cost $374 million in 1960s dollars, or a few billion dollars in today’s money.
It was time for a dose of fiscal discipline. Since the U.S. abandoned the Space Shuttle it has become dependent on Russia for getting astronauts to the International Space Station. The cost per seat has risen to more than $80 million, costing NASA around $3.37 billion over 21 years. But that is actually a bargain compared to the Shuttle flights, where the cost per seat was $214 million.
Although the vision behind Space X is Musk’s the execution of his ideas is in the hands of one of the few women engineers in the business, Gwynne Shotwell, the president and chief operating officer. She recently set out just how ambitious she is: “Hopefully, in a year or two the whole concept of reuse is not even a discussion. We don’t talk about airplanes being reused or how many flights they have seen before you get on an airplane. If you leverage the airplane business model that is where you are headed—complete and rapid reuse.”
In eight years Space X has achieved 55 successful launches of its Falcon 9 rocket, and 25 of them involved successfully recovering and reusing the vehicle.
The latest Falcon 9 rockets are designed to make 10 or more flights without needing a major overhaul. Ultimately Shotwell wants to be able to relaunch a rocket within 24 hours of it being recovered. “That doesn’t mean we want to fly the rocket once a day,” she said, “but we could if need be.”
Now the Falcon 9 is being readied to ferry astronauts to the space station in Space X’s Dragon 2 capsule. NASA requires seven successful flights of the latest version of the Falcon 9, configured for the capsule, before giving the green light for the first flight with astronauts, due next April.
Space X won a NASA contract to ferry astronauts to the ISS with a bid of $2.6 billion, including six missions each carrying four astronauts. Boeing, bidding to provide the same capabilities, got a contract at a price of $4.2 billion. “I sure wish I would have bid more,” Shotwell told reporters at a conference at Space X’s headquarters in California in August. “I hate to talk about profit when we’re talking about flying astronauts, but this will not be a losing proposition for Space X.”
That huge difference in the contract price reflects the vast difference in the cultures of Space X and Boeing. Musk is the innovative disruptor, developing his own vertically integrated program, from launch rockets to capsule. Boeing is a legacy corporation that has grown fat on budget-busting government contracts and finds itself competing with a far more nimble rival.
In fact, Boeing is just one part of a consortium with a cumbersome management tree. Boeing is responsible for producing its Starliner capsule but the launch rocket involves a long and complicated pedigree going back to the Atlas rocket series, first developed in the late 1950s and used to send John Glenn into orbit in 1962.
Under the title of the United Launch Alliance Boeing partners with Lockheed to build the current Atlas 5 rocket (which is not reusable). Right now that depends on a Russian engine to power its first stage. This is due to be replaced next year by an engine developed by Jeff Bezos’s Blue Origin team. The Starliner capsule has already suffered delays and will be at least a year late in being tested.
But providing taxi service to the ISS is far too small an idea to satisfy Musk’s imagination. His wildest project is the colonization of Mars. In Musk’s vision we should eventually be capable of “making humanity a multi-planet species.”
He is talking about a fleet of 1,000 space ships departing for Mars every 26 months when Earth and Mars are best aligned for flights. Each ship would carry 100 people, paying around $100,000 each for the ride to a new world.
Who knows, when the first ship lands on Mars Hughes might be there waiting to greet them. In his latter life he sometimes gave the impression of being a Martian.