Tuesday, June 15, 2021

If no one reports it - did it happen?

A couple of weeks ago when Katerra announced they were going bankrupt it piqued my interest. I've been kinda background watching them every since. Construction costs are very high in California. They claimed they could build components off site for cheaper.

A couple of years ago I watched a project go up this way. It seemed to take forever. It was a mini project of four houses, so you never know if the guy is running out of money, or if it's due to construction delay.

Anyway, when this company fell out I wasn't sure if it was the tip of the iceberg,  or they were just tards. And I think it was a bit of both. If I hit their Wiki page, my immediate reaction is - oh, that company was destined to fail. It's a Softbank backed company started by techies? I also have a general rule that if I hit a site, I should immediately know what your company does. It shouldn't take me three tabs to figure it out. And if all it talks about it optimizing synergies, my bullshit meter goes sky high.

Then I recently became aware of a project in my city that was halted because of this company. It's sitting idle right now.  It's a mid size project. It was then I started digging more. Because..... how many people did that company employ, and why is there no news about layoffs? It also makes me wonder, how many other project have been shut down with no news? 

Kattera allegedly employed 7500 people at one point. It seems like that would rate a news article.


  1. Building components off-site... you mean, they re-invented the modular home?

  2. Well...

    I think it's walls only since the site is stacked with them.

    Maybe that makes sense when gas is low, but you can't get a very dense stack of lumber because it's in the shape of a wall. What you save in building off site you must eat up in transportation costs.

    Also when I watched the mini project go up they had to hire a ~large~ crane. The kind you only see on big construction sites. At the time I thought - how much does that cost?

    For a four house project it didn't make sense to me, And I know for certain this is VERY expensive labor. I talked to a guy once and he said it takes a bunch of years to become certified. I don't remember the exact amount of time now, but I think more than 5 years. This is ~speciality~ knowledge. I don't know for certain, but crane operators are a finite resource.

    Lumber prices going up 400% also couldn't have helped.

  3. Capital of Texas RefugeeTuesday, June 15, 2021 5:57:00 PM

    Bay Area technerds "sponsored by Softbank" [announcer echo] try to reimagine what Japanese home manufacturers such as Toyota, Mitsubishi, Panasonic, etc. already do regularly for the Japanese market, yet fail spectacularly trying to deliver for the American market ...

    Did they just not understand the idea of "Lost In Translation"? (Is it Suntory Time?)

    The Japanese version doesn't arrive mostly pre-assembled on a giant truck with a crane to follow.

    Instead, the Japanese version shows up on a bunch of smaller trucks as grouped assemblies that are staged so that they arrive on time for the next part of the assembly.

    This works great when production is essentially regional and one factory isn't trying to service a country as large as the United States.

    Seriously, the Japanese have this down to a science, plus in a country where home values tend toward zero over time, these companies can deliver products that have warranties for up to sixty years.

    But here's a different angle: this was very likely never about building anything at all.

    Softbank so often looks like it's nothing but a money conduit.

    Perhaps that's the fundamental truth of Softbank.

    And so the "failure" of Katerra is like the "failure" of WeWork: certain C-level people were put into positions so they could be paid off for "community service", using Softbank as the leveraged payoff organization.

    Just look at the background of the people in the C-level seats as well as how this was part of the Greensill Capital system of managed payoffs to designated prize winners.

    Anyone at Katerra who thought this was about building houses better was very likely completely mistaken.

    It's like what you say about Tesla, which is essentially true: the work the company does toward building vehicles you can drive is mostly a distraction for its true purpose as another kind of vehicle, meaning the investment kind.

    One more question then: to what extent was Katerra responsible through this "mass timber" market they were trying to exploit of driving up lumber prices in the American market?

    Maybe that's why it seems like it was structured for C-level rewards.

    Again, Softbank just looks like the bag man in this financial gangster drama.

  4. I think that is the most linear response you've ever made. ;) But agree. It's pretty obvious at this point. Sort of like a shell game.

  5. Capital of Texas RefugeeTuesday, June 22, 2021 2:35:00 AM

    It's been really busy here.

    I keep getting asked for more paperwork, so the thing hasn't happened, but there's not a hard "no" about it yet.

    But about Katerra: this timber thing could be over for the US if they'd set up a six month exception to the Canadian soft lumber tariffs and hard wood lumber tariffs for the EU.

    So it's really about someone pulling an Enron again, this time with lumber.

    And, of course, it's really about politics of the very worst.

    Which it appears you've noticed ...

  6. No - this is Americans fault. They just don't give a fuck about anything. So I'm not all that sympathetic honestly to what is going on. This is what happens when people think it's more logical to let trees die due to drought rather than cut them down and make lumber. And letting Canada stroll in to the rescue decidedly is why we are here right now.

    We are truly becoming Venezuela because people are completely unwilling to use our own resources. We are sitting on a fuck ton of trees that are just going to die.