Wednesday, October 2, 2024

Musk's effort to help Trump is running behind

Plus: What WeWork's Neumann is up to now

Last night, vice presidential candidates JD Vance and Tim Walz went on TV for what might be the last debate of this election cycle. But perhaps more consequentially, with only weeks of campaigning left, thousands of volunteers and paid workers will be knocking on doors, trying to get out the vote. As Bloomberg's Joshua Green writes, Republicans are counting on PACs like the one Elon Musk is funding to make face-to-face contact with voters. But will it work? Plus: WeWork's founder tries again, short sellers take on a family-owned drugmaker, and the latest episode of Elon, Inc.

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Elon Musk's super PAC is spending millions to help Donald Trump and other Republicans, and it's still trying to hire door-knockers in swing states and congressional districts across the country. With the election barely a month away, some political experts and rivals are wondering: Why did he wait so long?

America PAC, the political action committee Musk created as a vehicle for his political ambitions, listed job openings in 17 states as of Monday. Trump has a great deal riding on projects like Musk's—his campaign is relying heavily on super PACs, which can raise and spend unlimited amounts of money, to turn out voters on Election Day. Through the end of September, America PAC has spent as much as $71 million to influence the presidential election, according to government filings.

Although experts say it's possible for PACs to build a robust turnout operation, Musk faces two hurdles. First, his PAC is relying on paid canvassers, who tend to be less effective than volunteers committed to a candidate or cause. David Nickerson, a Temple University political scientist and expert on voter persuasion, estimates that using paid canvassers requires about twice the cost and work hours that using volunteers does. "It's painstaking work that requires good people, good training and a real commitment to succeed," Nickerson says.

Campaign signs ready for distribution at the Butler County Republican Party headquarters in Middletown, Ohio. Photographer: Scott Olson/Getty Images 

That leads to the second hurdle: time. Building a successful turnout operation entails setting up field offices, recruiting the door-knockers, training them, and then measuring which ones are effective and which aren't and need to be replaced. "It takes a while to find the right canvassers," says Mark Harris, a Pittsburgh-based Republican strategist. "If you had a perfect program you could plunk in today, it could still be effective. But coming late really complicates the logistics."

That America PAC is still hiring so late in the cycle is a sign that its effectiveness could be limited, voter mobilization experts say. "The challenge with starting a paid program so late is basically one of labor economics," says Sasha Issenberg, author of The Victory Lab: The Secret Science of Winning Campaigns. "Unemployment is low. It's not a great time to be hunting for day laborers of any kind. You probably won't get great workers, which typically means they're lazy or inefficient."

There are signs America PAC may be struggling with exactly this problem. Two weeks ago, it fired its canvassing vendor in Arizona and Nevada, two states critical to the presidential election, and took over the task of recruiting workers itself. The PAC's "Careers" page lists dozens of openings for "energetic and committed individuals to join our team as Door-to-Door Canvassers." A spokesman for America PAC declined to comment on why it parted ways with the vendor just weeks before the election. But a person familiar with the PAC's efforts says it was replaced with a larger vendor with more ability to scale. (It doesn't help that some applicants have already taken to X to complain about the operation. After one person said they were fired after asking about pay, Musk tweeted back, "Sorry, so many dumb things happening. Working on fixing.")

Canvassers for rival organizations say they're doubtful that Musk's PAC will have a transformative effect on the presidential race because they aren't encountering many America PAC workers when they're out knocking on doors.

"In close races, it's pretty common for us to run into folks from the other side because a lot of times we're going after the same undecided voters," says Yasmin Radjy, executive director of the liberal grassroots group, Swing Left. "But I'm not currently seeing or hearing about that kind of activism in any of the places we're working."

That may be intentional. A source familiar with the PAC's strategy says it's focusing on low- and mid-propensity voters that previous campaigns haven't typically tried to reach, including young men. With the cost of national campaigns rising every election cycle, outsourcing voter turnout to super PACs able to raise unlimited funds from wealthy donors holds obvious appeal. The Federal Election Commission provided another impetus when it issued a decision this year allowing super PACs and other outside groups to coordinate with campaigns on voter turnout strategies.

But even a well-funded program with plenty of time and organizational expertise doesn't automatically lead to success. In the 2024 Republican presidential primary, Florida Governor Ron DeSantis relied heavily on the Never Back Down super PAC for advertising and voter turnout in his quest to beat Trump. Yet despite the PAC spending more than $130 million to boost DeSantis, he never threatened Trump and quit the race after a distant second-place finish in the Iowa caucuses.

Several Republican strategists working in battleground states and swing congressional districts—who didn't want to speak for attribution for fear of angering the Trump campaign—says they, too, have seen few indications of Musk's ground game. The Trump campaign didn't respond to a request for comment. One attributed this apparent shortcoming to a problem he says has quickly become endemic in the new, PAC-reliant era of campaigning, especially among "wealthy tech bros" like Musk who are new to politics and expect their riches to produce an outsize impact. "In politics, money is a vehicle—it's not the output," the strategist says. "You still have to do the work of turning out votes."

Most surveys show a deadlocked presidential race, including the latest Bloomberg News/Morning Consult swing states poll, which suggests the election really could hinge on which side does a better job of turning out its voters. In recent weeks, some Republicans have begun fretting that super PACs may not be up to the job. Despite those doubts, liberal strategists still worry that their opponents' ability to tap the coffers of wealthy donors could wind up making a difference. "When you have the kind of limitless money Elon has, the program can make an impact even if it's not well run," Radjy says. "You can have paid canvassers talking to every single voter in a district."

That may sound like hyperbole. But Musk doesn't sound as if he's ready to throw in the towel. Early Tuesday morning, he wrote on X: "Mind-blowing that the Democratic Party is massively outspending the Republican Party in swing states!"

Related: How Gigantic Sums of Money Shape This US Election Season

In Brief

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The Coworking Space Grows Up

Adam Neumann in April. Photographer: Romain Maurice/Getty Images

Four months after a failed bid to buy back WeWork Inc., the coworking company he co-founded in 2010, Adam Neumann is introducing a competitor. The concept, dubbed Workflow, is to make a more adult version of his former brainchild. Like WeWork, it will offer office space on flexible terms to companies and individuals, though it will aim to create a calm atmosphere with fancy artwork and plush furniture, instead of providing kombucha and beer at offices filled by twentysomethings running amok.

Design sensibilities won't be the only difference between Workflow and WeWork, which emerged from Chapter 11 bankruptcy in June. Neumann's initial coworking company signed long-term leases with landlords, then relied on short-term leases for revenue, leaving it vulnerable to sudden drops in demand. Workflow is building offices in residential buildings it already owns or partnering with landlords to manage spaces it doesn't.

Neumann says Workflow will benefit from the high demand for flexible workspaces since the pandemic. "The lack of community and the disconnection that people feel is even more relevant today" than when WeWork started, he says.

WeWork was once the fastest-growing coworking company in the world before it crashed and burned. Natalie Wong talks with Neumann about how this venture is different: Adam Neumann's Latest Project Is a WeWork Competitor

Investors Versus a Family Legacy

Illustration: Ard Su for Bloomberg Businessweek

For more than eight decades, the descendants of Josep Antoni Grífols Roig ran the pharmaceutical company he founded in the wake of the Spanish Civil War. But following a critical report from New York short seller Gotham City Research in January, shares in Barcelona-based Grifols SA tumbled by a third—and today the family is on the cusp of losing control.

Grifols had long been dogged by concerns about shoddy governance and a lack of transparency, but some investors overlooked those issues because the company is one of three that dominate the global business of collecting blood plasma and turning it into treatments for diseases such as hepatitis and hemophilia. Today, though, investment firm Brookfield Asset Management is in talks with the founder's descendants, who own more than a third of the company, to take the business private. "It's a desperate situation for the family," says Xavier Brun of Trea Asset Management, "a turning point to save their ownership."

The short seller's attack, one of Europe's biggest in the past decade in terms of the decline in the target's market value, highlights the risks family-owned companies face when listing on global markets.

Clara Hernanz Lizarraga and Rodrigo Orihuela follow the story of Grifols here: How a Short Seller's Attack Threatens This Spanish Family Company

The 'Remigration' Discourse Explained

Photo illustration by 731. Photos: NASA (1), Getty Images (3)

Elon Musk's posts on X have grown more and more political—and right wing—over time. This week on the Elon, Inc., podcast, Bloomberg's Jonathan Tirone joins the panel to discuss how the billionaire and his platform have brought the once-obscure White nationalist term "remigration" back into US politics. Plus tech reporter Kurt Wagner talks to Jack Sweeney, who created the ElonJet tracker that Musk personally de-platformed from Twitter.

For all that and more, listen and subscribe on Apple, Spotify, iHeart and the Bloomberg Terminal.

Big Bets

25%
That's how much some hedge funds made after betting big on China in September. Stocks surged after Beijing unleashed a range of measures to bolster an ailing economy.

Scraping By

"We are gravely skeletal in ways that will not be good for students, for the community, for teachers or schools."
Andrea Castañeda
Superintendent of Oregon's second-largest school district, Salem-Keize
US pandemic aid that funneled billions of dollars to school districts across the country is expiring, threatening deep cuts to staff and services. Read the full story here.

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