Fed Workers Weigh Trump’s Buyout Offer & Tesla Sales Struggle in Europe

0:03When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, a fork in the road. Will government workers take Doge's offer of deferred resignation? Then Tesla's sales across Europe took a nosedive as Elon Musk dives deeper into the region's politics.

0:46It's Thursday, February 6th. Let's ride.

0:53There's been so much talk about government efficiency here in the U.S., but over in the Czech Republic, they're absolutely chewing through red tape. And that's all thanks to some cost-cutting beavers. Here's the story. So there's this nature park where local authorities have been trying to build a dam for seven years to restore water areas. But the project has been frustratingly held up over getting the necessary building permits to start construction. Enter a family of eight beavers who in two days built a dam that humans have been trying to set up since 2018, and it was in the perfect spot. One environmental official said beavers always know best.

1:32The places where they build dams are always chosen just right, better than we can design it on paper. They estimate that the beavers, who have now become famous, save the government $1.2 million. That's Doge Dunrigh. You know who has no time for bureaucratic delays? It is beavers. Fun fact about beavers, when they create dams, they also create special pools that are conducive to growing their favorite food, which is this leafy green shoots. So they aren't just building a dam. They are also building a farm at the same time. So look at them stimulating economic activity. But here is my galaxy brain.

2:06Take Neil. Those beavers actually just destroyed$1.2 million of GDP for the Czech Republic doing construction without a permit. So maybe it's time to rethink how we calculate GDP to include unpaid labor from animals like beavers. Now a word from our sponsor, Wise Business. Neil, between us two, who is the more responsible one? Well, you once showed up to work without your computer, so I'm going to go with me. Unfortunately, I have to agree with you, which is why I am such a fan of Wise Business. It is like the Neil of international payments. Always prepared, always reliable. It handles multiple currencies, connects you to your accounting software, and has no hidden fees.

2:45Plus, it's devilishly handsome. Okay, I said you're responsible, not a supermodel. Just remember your computer, okay? Wise can always save you. For an international business account as prepared as Neil, visit wise.com slash business. That's wise.com slash business. This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs.

3:23Like a good neighbor, State Farm is there. Day marks a big test for President Trump and Elon Musk's plans to dramatically shrink the federal workforce. It's the deadline for more than two million federal workers to decide whether they will accept the deferred resignation offered to them. To recap how we got here, last week, most federal employees were sent an email with the subject line, a fork in the road. It gave them the option to resign by today and still get paid for another eight months until the fall. It's one of the centerpieces of the Trump administration's push to cull the federal workforce.

3:57It remains to be seen how many people will actually take the offer. So far, the Trump administration said that at least 40 ,000 employees have taken the deal, about 2 % of the federal workforce. That's much lower than the goal of a 5 % to 10 % reduction set out by the administration. And one hang up that could be keeping federal workers from leaving their jobs, it's unclear whether this move is legal. Three unions that represent more than 800 ,000 federal workers have filed the lawsuit seeking a restraining order to halt the deadline. Or in more practical terms, the employees might be hesitating to resign because they're not sure whether they can trust the government to keep paying them and make good on this promise or what their job prospects might look like after resigning.

4:39So a whole lot of question marks, but a big day for the millions of people employed by the government. Yeah, you have started to see people warning federal employees to not accept the offer because one possibility is the workers don't get paid the full term and then file lawsuits against the government saying, hey, wait a second, you were supposed to pay me this. But then if the actual, you know, offer in the first place was unlawful, then there's no legal recourse against something that wasn't legal in the first place. So, yeah, there's a couple of things that this offer potentially violates.

5:10One is the Anti-Deficiency Act. This is a law that prevents the government from promising money in excess of what Congress has allocated. And remember, Congress has only funded the government through mid-March. We're going to have another one of those big budget meetings, not through the end of the fiscal year, not through the end of December where these payments would go. So they're saying we can't even – you can't promise money that hasn't been allocated yet. So that's one issue. And then there's this other federal provision that says you're not allowed to pay federal workers on paid leave for over 10 days.

5:43And the idea is you don't want to pay federal employees for not working. It's actually a very Dogean law if you think about it. So those are the two kind of legal issues that go against this fork in the road offer. Right. And that March 14th, the government would shut down, in which case federal agencies wouldn't be funded and employees would be furloughed. So that is a major question mark. I mean, employment lawyers, their phones must be ringing off the hook. And I think from what we understand, the general consensus is that they're advising employees to not take the offer based on all of the big legal questions that you raise.

6:21The administration pushes back, saying that Trump signed an executive order giving agencies more leniency into providing more administrative leave for federal workers in order for this to comply. So big questions here. And another one is that how many of these workers would have resigned anyway? I mean, if you look at the national attrition rate, natural attrition rate for the government workforce, it's 6 percent a year. So 2 % is lower than that, obviously. And how many of these workers would have been a part of that 6 % turnover that the federal government has anyway? Right. A lot of people said mainly the people who are leaving already had other job offers waiting for them.

7:03Because remember, even though 20 ,000 workers sounds like a lot, that is well within that 6 % attrition rate that you mentioned. That being said, the White House has said that the number of deferred resignations is rapidly growing. They do expect a big surge in these last 24, 48 to 24 hours. We are right. I mean, people procrastinate these. It's like when you send a party invite, no one replies until the very end. So it is true that you might see a huge spike today. Yeah, so the fork in the road email was sent last week, but now we are really at that juncture. Lost in Elon's infiltration of the federal government is the fact that he is still operating multiple very large businesses, one of which is trending in the right direction, the other not so much.

7:44First up, the social media platform X is suddenly looking a lot healthier than it did a year ago. For a while, it looked like the exit path for the Wall Street banks that funded Elon's acquisition of Twitter was going to be a turbulent one. His controversial moderation strategies led to an advertiser exodus, which caused the platform's value and the loans Wall Street held to plummet in value. So Morgan Stanley, Bank of America, and others started shopping around to offload those loans. But since Trump's election win, investors have changed their tune on X. And as of yesterday, the banks were able to sell$5.5 billion in X debt for around$0.97 on the dollar, up from the$3 billion at$0.95 they initially expected.

8:27Neil, this still isn't exactly a healthy company. X is still struggling to break even. But the combination of Musk's Washington Connects and the growing intertwining of X with XAI, his artificial intelligence company, has investors interested again and banks breathing a sigh of relief. Yeah, this debt sale is a very interesting education in how leveraged buyouts work. So we know that Musk paid$44 billion to buy Twitter at the time. Of that$44 billion, banks provided$13 billion in financing once the acquisition went through. Now they owned all of this debt in this new company. Typically, when banks finance an acquisition, they quickly offload that.

9:06They don't want to hold that debt for long. They quickly offload it to other investors who might be interested in investing in the company that they just helped take private. So typically, banks will shed this within months. They already have buyers lined up. In this case, I mean, it's been over two years. That's because these loans were underwater. This company fired 80 % of its staff and advertisers had been pulling away. Its finances were in the dumps now that it's creeping back up. Musk wrote in a January email that we are barely breaking even, which I guess is a positive, is seen as a positive.

9:43So there's certainly momentum around this company a little bit due to Musk's, you know, relationships with the president. So that's why banks were able to get maybe face value for this loan to dump it to investors who were pretty eager to buy into this company. Another thing, too, it makes the banks that did take the risk on Musk look even better here. So you look at the names, Morgan Stanley, Bank of America, Barclays. These are the banks that lent the funds to Musk to complete the acquisition. And they're looking kind of smart now because, one, they've been collecting these hefty interest payments.

10:14And then, two, a lot of people would say, oh, those loans are super underwater. But they just sold for 97 or 98 cents on the dollar. So they did recoup a lot of their investment. And hopefully why they maybe took the risk in the first place is that Elon owns a lot of businesses. He has a lot of influence when he is looking to Wall Street to fund something else or for help on something else. He'll remember those banks that did take the risk on him. So suddenly, even though maybe a year ago you would have said, ah, not a great decision to fund this acquisition. Now they're looking better if Musk is willing to do business with them going forward as the people who were by his side during this X acquisition.

10:53The other business Elon runs, lest we forget, is Tesla. and that is not going as well. Car sales data from the first month of the year is coming in from Europe and it looks like Europeans did dry Tesla January. Sales are way down in France, Germany and the UK as Europe emerged as a major headache for the car maker on the heels of its recent financial miss. Tesla sales were flaky as a croissant in France dropping 63 % from a year earlier. German sales went from bad to worst with a 59 % drop in January. In Britain, where Musk has been beefing with Prime Minister Keir Starmer, sales are down 12%.

11:30Sweden is another problem area after a mechanic strike against Tesla led to demand sliding 44%, worse than the 38 % drop it saw in neighboring Norway. Neil, all across the continent, Europe is souring on Tesla. And we're all wondering why this is. There are a couple of factors that could be at play. One is that Tesla is gearing up an updated version of its Model Y, which is coming in March. So consumers might be waiting on that. The other is increased competition. We know that China has made a lot of inroads in Europe, not in the United States, but there are a lot of Chinese EVs that have undercut the market there.

12:07The other is certainly it's hard to measure, but Elon Musk has been certainly dabbling in European politics. He's vocally supported an ultra far right, ultra nationalist party in Germany. And we saw a huge plunge of Tesla cars in Germany. He's also been beefing with the UK prime minister. Keir Starmer has used the platform we just talked about, X, to be this megaphone for him to have a very strong opinion and controversial opinion in European politics. It's unclear whether this is a consumer response to his meddling in their affairs. And I do think you have to dig deeper here and see, are EV sales just falling across the continent?

12:49In some cases, that is the case. In France, EV sales fell 6%. But, I mean, again, Tesla sales fell 63%. So it's falling at a much quicker rate. But then you look at the UK and you're like, oh, Tesla just fell 12%. But EV sales were actually 35 % higher in January 2025 compared to the year earlier. So, yes, the entire pie is growing, but Tesla is, you know, getting to eat less and less of it. So it's definitely a combination of all those factors. But Europe is still an important market for Tesla. I mean, it's an affluent sector of the world. They do sell a lot of cars there. So you don't want to see these, you know, 50, 60 percent drops from these European markets.

13:29So to start the show, we talked about Elon Musk's involvement in government. And then our next story was about Elon Musk's businesses. obviously it raises huge questions of conflicts of interest. The White House press secretary was asked about these conflicts of interest yesterday and what could be done to prevent Elon Musk from enriching his companies and himself through his involvement and the government. She said, this is Caroline Levitt, she said that Elon Musk himself will determine if there are conflicts of interest. So there are no outside checks on this. Elon Musk will reportedly recuse himself from any conflicts of interest should they arise as determined by him.

14:10Yeah, people have pointed out that self-determination of conflict of interest in itself is a conflict of interest. So it's conflict of interest all the way down. You know what isn't a conflict of interest? That's Neil's numbers, which is coming up next. Does it ever feel like you're a marketing professional just speaking into the void? But with LinkedIn ads, you can know you're reaching the right decision makers, a network of 130 million of them. In fact, you can even target buyers by job title, industry, company, seniority, skills, and did I say job title? See how you can avoid the void and reach the right buyers with LinkedIn ads.

14:46Spend$250 on your first campaign and get a free$250 credit for the next one. Get started at linkedin.com slash campaign. Terms and conditions apply. Tuesday on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon.

15:22Series premiere Tuesday on NBC. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will have you sounding smarter than Marissa Tomei and my cousin Vinny. My first number is a long-awaited report card on America's well-being published this week by a diverse group of 14 scholars. Their conclusion is a startling one. In terms of wealth, the U.S. gets an A. On every other metric, we scored something like a D or worse. It's not a report your mom would want to hang on the fridge. First, the good. Since the 1990s, U.S. economic growth has been the envy of the world, and we've outperformed most of our peers in terms of innovation and productivity.

16:03For instance, in 1990, U.S. GDP was 28 % higher than the euro area. Now the gap is 80%. But on other metrics, less related to the economy and more related to health and well-being and culture, The U.S. is a significant laggard. According to the New York Times, we have the lowest life expectancy of any rich country. That was not true in the 20th century. We have the highest murder rate of any rich country and the world's highest rate of fatal drug overdoses. Trust in the federal government is abnormally low, while youth depression is abnormally high. As one historian at Hillsdale College summed it up, we're so wealthy but so unhappy.

16:38This committee that released the report did not actually go as far as to explain these trends because you said it's a diverse group of 14 people. So none of them could really agree on why our economy is doing so well. But all these other indicators are going the other direction. So the New York Times kind of called them all up individually and asked them, hey, what do you think is going on here? And they said that they identified five themes here. One, the U.S. prioritizes GDP above all. A lot of our government policy, a lot of things about our culture, you know, are geared towards prioritizing economic growth, maybe at the expense of some other things.

17:14Then also another theme is a lot of us are pulling apart. We're becoming more isolated. We've talked about this on the show a lot. We don't go to, you know, church anymore. You don't go to meetings anymore. There's less gatherings. Part of it is the reliance on technology. Three, the United States is still a very unequal place or unequal place because, yes, maybe the entire economic pie has grown. But potentially that's just been concentrating at the top more. And then four, I'm almost done there, affluence itself. You're teaching me. Yeah, a lot of the problems we have is reflected by the very affluence we have.

17:49So think about it. If you have an abundance of few, that might lead to a rise in obesity. If you have rising incomes, you can buy smartphones, which means you don't hang out with your friends as much anymore. and then five, this one was my favorite, and it was just bad luck that we have gone through a lot of things recently. Once in a lifetime financial crisis, once in a lifetime pandemic, once in a lifetime bout of inflation as well. So some historians and some of these people who worked on it said, maybe we're just in a crummy period and we will emerge out of it. Some people pushed back against that, but those were kind of the five themes that they identified that - Toby's numbers, Toby's tallies right there.

18:27Ladies and gentlemen. I hijacked your segment there. I was great. I learned a lot. Okay. For my second number, here's a question that's asked frequently. Who talks more, men or women? Many people would say women, and that'd be correct for the most part. According to a large new study out of University of Arizona, researchers found that women spoke on average about 3 ,000 more words per day than their male counterparts. But there's a catch. This is only holding true between the ages of 25 and 65. Significant gender differences did not appear in the study's other age cohorts, such as in adolescence or older adulthood.

19:08This was a closely watched study because it was from the same researchers who published a viral paper in 2007, or whatever the virality was in 2007, that pushed back on the stereotype that women gab more than men. That study found that men and women speak roughly the same number of words per day. But that 2007 study was quite limited in scope. So over a decade later, the same researchers decided to blow up the sample size and geographic reach to get a more comprehensive sense of chattiness differences between genders. And they found that women do talk more than men during the life stages of early and middle adulthood.

19:43Yeah, and the researchers didn't want to go as far as to saying this is exactly why, you know, they are speaking a little bit more during this 40 year stretch. But one possibility is that those tend to be the child rearing years. And if you assume that women are typically the primary caregiver, they might be speaking more to their children than men do that time. So that is potentially the reason for that 3 ,000 word gap. But they also said, look, there is a ton of variation between individuals as well as between genders. the study's least talkative person was a man who spoke an estimated 100 words a day, a man of very few words.

20:21And then the most talkative person was also a man who spoke more than 120 ,000 words a day. I would like to get those two in a room together and see what happens. We all know some chatterboxes, and we love them. For my final number, what could be the world's most expensive musical instrument is up for auction tomorrow at Sotheby's in New York. No, it's not Toby's recorder from middle school. It's a violin made from the famed Antonio Stradivari in 1714, and it could fetch anywhere from$12 million to$18 million. At the top end of the range, it beat out the current record holder, another Stradivarius made in 1721.

21:01So why is this violin so remarkable? First, the guy who made it, Stradivari, is considered the best violin maker ever, even if he was toiling in a shop 300 years ago in Italy. Violinists rave about the richness and tone they can get from his instruments. Top soloist Joshua Bell compared it to being a painter and having access to thousands of colors to paint from rather than dozens of colors. Second, this violin has gotten a halo effect by the people who have owned it before. Violin virtuosos Joseph Joachim of Hungary and Sihon Ma of China, who gifted it to the New England Conservatory of Music in Boston upon his death.

21:38Toby, this is the most fit a fiddle you'll ever see. It absolutely is. I love this story because one, it is very rare. Rare people are saying it's like seeing a living fossil. There's only 650 left in existence, but it's also the best. It is people likened it to saying, imagine if the best iPhone was invented 300 years ago and all the advances since haven't improved upon this one design. I encourage people to go onto YouTube too, because there's some, you know, violinists who have tested out like a$10 violin,$100 violin, and then like a million dollar shot a various violin and it does like even to my untrained ear you're like wait a second there's a lot more going on here so i do think this is a case where it's absolutely worth it um this you know could to be one of the most expensive instruments ever sold and so i wonder who's gonna buy it i know can griffin step in here i don't know you know he's the guy who buys the t-rex and he buys the u.s constitution but you know players can't afford it so usually you have these big pocketed philanthropists or donors who come in, buy these expensive Stradivari and then lend it out to virtuoso performers to play it at Carnegie Hall or Boston Symphony Hall or whatever.

22:49But I think one of the coolest parts about this is that it was donated to the New England Conservatory. So they're going to use this, however much it's sold for,$18 million to fund scholarships for their school and hopefully train a new generation of amazing classical performers, which is near and dear to my heart. Okay, let's sprint to the finish with some final headlines. Google has become the latest big tech company to pull back from DEI in the Trump era. It told employees yesterday that it is scrapping its goal of hiring more workers from historically underrepresented groups and reviewing some of its DEI programs, such as releasing annual diversity reports.

23:25It is a major reversal from 2020 when after George Floyd's murder, Google pledged to increase the share of leadership representation of underrepresented groups by 30 % by 2025. According to its latest diversity report, 5.7 % of its U.S. employees are black and 7.5 % are Latino, a smidge higher than 3.7 % black and 5.9 % Latino four years earlier. Yeah, part of this is obviously driven by recent court decisions and executive orders from the current administration. They are aimed at curbing a DI in the government and with federal contractors. Google does work with the government across various things.

24:03They aren't alone either. Meta also eliminated the team overseeing its diversity efforts last month. And then also Amazon told employees in December that it would wind down some of its diversity initiatives. So it does look like this is where the winds are blowing in the big tech universe. Elon Musk's Department of Government Efficiency has a new target in mind, the Medicare and Medicaid payment systems. He and his team are combing through payments from the agency targeting what they consider potential fraud and inefficiencies. The team is specifically focused on canceling DEI contracts across the Department of Health and Human Services, including those with major contractors like Deloitte.

24:43CMS assigned two veteran employees to collaborate with those to ensure appropriate access to their systems. But, Neil, the Wall Street Journal called CMS the nerve center of the nation's health care economy. It outlaid$1.5 trillion the last fiscal year, or about 22 % of the federal total. So this is a bigger task and target than any Doge has taken on so far. Totally. This is the big kahuna, because if you look at agencies that Doge has taken aim at already, USAID accounts for less than 1 % of the federal budget, other doors they've been knocking on. I mean, even the federal workforce as a share of how much the government spends is tiny.