Speaker 1: In May, I packed myself into the San Francisco Forts
Speaker 1: Football Stadium with forty other middle aged rockets to watch
Speaker 1: YouTube perform. Bonno did a little intro before the music began.
Speaker 1: Here we are once again with the cars. That's when
Speaker 1: I knew Silicon Valley's mania for this technology who gone
Speaker 1: truly mainstream. When techs aren't complaining about President Trump, flying
Speaker 1: cars often come up. Ubers working on a sky taxi project.
Speaker 1: Google co founder Larry Page is funding two startups, and
Speaker 1: a flock of other companies are working on their own
Speaker 1: version of this technology. Here's the vision. A vehicle that
Speaker 1: looks like the love child of a helicopter, drone and
Speaker 1: a light airplane will zip people around the urban areas,
Speaker 1: unclogging commutes and transforming cities. There will be an app,
Speaker 1: of course, for your smartphone, so you can heal these vehicles.
Speaker 1: And it will all happen in the next five or
Speaker 1: ten years. But what many people in Silicon Valley are
Speaker 1: too young to remember is that flying car euphoria has
Speaker 1: already gripped the world, way back before iPhones, drones, and
Speaker 1: even the Internet. I did grew up in a checkpoint,
Speaker 1: like you said, and and and some hommy birds got
Speaker 1: trapped in one of my father's sheds. The vision of
Speaker 1: this vertical takeoff capability just struck me, and it's never
Speaker 1: left me. That was inventor Paul Mueller, describing how a
Speaker 1: chance encounter more than seventy years ago began his lifelong
Speaker 1: dream of making a flying car. It's turned into a
Speaker 1: nightmare though, involving hundreds of millions of dollars lost, regulatory investigations,
Speaker 1: allegations of fraud and bankruptcy. Hi am akito and I'm
Speaker 1: at and this week on Decrypted, we're telling you the
Speaker 1: story of Paul Moehler's unwavering, even crazy optimism in the
Speaker 1: face of dancing, technical, and financial challenges. There are lessons
Speaker 1: for today's flying car devotees who are busy proclaiming that
Speaker 1: this time is different, sounding really similar to Paul decades ago. Okay,
Speaker 1: we have to start by asking what might be a
Speaker 1: stupid question? Aren't flying cars just helicopters? That is, um
Speaker 1: not a stupid question. That's alex As Silly, an entrepreneur
Speaker 1: and partner at one of Europe's top venture capital firms, Atomico.
Speaker 1: He's backing a German flying car startup called lillium. He
Speaker 1: says there's already a ten to fifteen lion dollar market
Speaker 1: for this technology, which is the market for conventional helicopters.
Speaker 1: There is a difference, though. Helicopters are expensive and noisy,
Speaker 1: with huge rotors that limit where they can land. Flying
Speaker 1: cars are designed to be smaller and cheaper and combine
Speaker 1: what backers hope are the best qualities of helicopters and airplanes.
Speaker 1: Some use electric power, making them potentially quieter, Others use
Speaker 1: a comba of battery and traditional gas power, and of
Speaker 1: course a key feature is the ability to take off
Speaker 1: and land vertically while also flying pretty fast to cover
Speaker 1: longer distances. Some designs look like large drones, while others
Speaker 1: look more like airplanes with multiple propellers that tilt up
Speaker 1: and down. The cost of these things um is going
Speaker 1: to come significantly down, I think, just as the starting
Speaker 1: point will be considered really less expensive than helicopter. And
Speaker 1: the vision, of course is that you know these will
Speaker 1: be this will be a form of the market time
Speaker 1: of their transport for kind of short media range. And
Speaker 1: to tell the story from the beginning, we need to
Speaker 1: go back to Paul Mueller's family farm back in the
Speaker 1: nineteen forties, long before Alex and most other flying car
Speaker 1: backers were born. After Paul saw those hummingbirds you heard
Speaker 1: about earlier, he began building all sorts of things that
Speaker 1: either flew, moved fast, or held people through the air
Speaker 1: in other ways. For example, at fifteen, he tried to
Speaker 1: build a helicopter based on illustrations he saw in a book.
Speaker 1: I didn't get too far before I realized I had.
Speaker 1: I didn't have the materials, I didn't have the money,
Speaker 1: I didn't have the machinery, but I didn't build part
Speaker 1: of it. He spent all his time tinkering with tools
Speaker 1: in his dad's shed. So he was a pretty poor
Speaker 1: high school student. So he attended trade school in Canada
Speaker 1: rather than college and emerged as an aircraft mechanic. Then
Speaker 1: came his big break while taking grad courses at McGill
Speaker 1: in his spare time in walks his famous aeronauticle engineer.
Speaker 1: Then you won't know a little bit about me. You
Speaker 1: know who the hell are you? According to Paul, Dr
Speaker 1: Barry Newman wrote the reference that helped him land a
Speaker 1: job as an acting assistant professor at the University of California,
Speaker 1: and Davis You couldn't many more in the lead level
Speaker 1: than that, But I did get ten year within five years,
Speaker 1: and I left the university shortly after I got ten
Speaker 1: year on a full time basis, started my company in Davis.
Speaker 1: And that's the beginning of the story. By seven, Paul
Speaker 1: Test flew his first vehicle with the press watching. It
Speaker 1: was the shape of a flying saucer with a single
Speaker 1: pilot sitting in the middle and fan blade engines around
Speaker 1: the cockpit. What you're hearing here is the sound of
Speaker 1: an early Modi flying car, the M two hundred X,
Speaker 1: hovering above a field, attached to a crane by a
Speaker 1: long cable. Then Paul made the new Era two hundred,
Speaker 1: the Firefly, the sky Car two hundred and four hundred,
Speaker 1: an air abouts, which was in early form of a drone.
Speaker 1: By the late eighties, the media had fully caught the
Speaker 1: flying car bug. CBS Evening News announced their imminent arrival
Speaker 1: to the nation report that was mostly about Paul's exploits.
Speaker 1: It's one of those American dreams that just won't go away.
Speaker 1: Behind every garage door, not a car, but a personal
Speaker 1: flying machine. It's a dream more widely pursued than you
Speaker 1: might imagine. In There was another tethered test flight for
Speaker 1: an updated M two in front of an even bigger audience,
Speaker 1: and we had blades fly off on occasion. And we
Speaker 1: knew that if we went how long, one minute, two minute,
Speaker 1: five minutes, the blades were going to fly off. But
Speaker 1: I needed a show of something. I had to show
Speaker 1: that I could do this. So I went that flight.
Speaker 1: It was a two minute flight, and I thought there
Speaker 1: was a reason, possibly I would die. Just so you know,
Speaker 1: he didn't die. I'm up there and our qualite fly around.
Speaker 1: The flight is great. I run into the end of
Speaker 1: the tether with a big bang and the plane stabilizes beautifully.
Speaker 1: It's a beautiful picture. If you see the thing I comment,
Speaker 1: you'll see that I'm so excited. Can hardly speak just
Speaker 1: the fact that I managed to live foods my Sonia
Speaker 1: said run a series we were on Discovery shot at
Speaker 1: least four or five times as we were on CNN.
Speaker 1: I mean, I was sitting one day doing a story
Speaker 1: for What's the British magazine like Blueberg I'm doing. I'm
Speaker 1: doing a story on the phone with the economists, and
Speaker 1: Michael Jackson calls up. He wants a flying car and
Speaker 1: That was probably the peak for Paul's flying car dreams.
Speaker 1: Despite the early promise of flying car inventor Paul Mulla,
Speaker 1: today none of his manned aircraft have flown far enough
Speaker 1: to be commercially viable. We visited him at his new,
Speaker 1: smaller headquarters near you see Davis in California's hot Central Valley.
Speaker 1: It felt more like a museum than a tech company.
Speaker 1: Prototype aircraft were arranged on a carpeted entrance area near
Speaker 1: Paul's office. He gave us a tour and so you
Speaker 1: hit that and then it'll drop down. Don't hang yourself
Speaker 1: out the side when and then you've been the front
Speaker 1: one close to that les too close, So I pressed,
Speaker 1: I can Yeah, this is this is quite comfortable. That's
Speaker 1: ACTI climbing into a red Molla flying car that looks
Speaker 1: like a ite jet and being enclosed in the glass
Speaker 1: dome of the cockpit. Yeah, I felt like such a badass,
Speaker 1: like a military pilot. Six fan like engines about two
Speaker 1: ft in diameter surrounded her. It has two seats, a
Speaker 1: controller that looks like a joystick in the middle, and
Speaker 1: a control panel with a tight cluster of about thirty
Speaker 1: cream colored buttons. Can you turn one on, can we No, No,
Speaker 1: that's that the f A and I I mean the
Speaker 1: f A is very demanding or where they let you
Speaker 1: go on what you do and when you can do it.
Speaker 1: And that's where we're in right now, is working with
Speaker 1: the f A. Much of the stuff you see flying
Speaker 1: around is totally illegal with real man flights always out
Speaker 1: of reach. Paul's inventions generated little revenue, and the project
Speaker 1: was constantly bleeding cash. Paul says, the engines are the
Speaker 1: really expensive challenge. Engines are luck at like a bonamous
Speaker 1: of money. I've spent you know, probably two day's dollars
Speaker 1: a hundred million on the damn engine. You can invent
Speaker 1: any kind of weird design and get it patent and
Speaker 1: get people pouring buckets of money in it before they
Speaker 1: realize it's it's not thermally efficient, it's not reliable, it's
Speaker 1: not any number of things. An engine, after all, is
Speaker 1: key to a person's product. If it's a hybrid car
Speaker 1: or an airplane, your life's going to depend on it.
Speaker 1: Whatever it is, it's it's really important. Still, he tried
Speaker 1: to feed that bottomless pit by making money on all
Speaker 1: these other related inventions that he sold on the side.
Speaker 1: Paul's super trapped mufflers became a hit accessory for bikers
Speaker 1: and motorcycle races. He developed a successful real estate project
Speaker 1: called Davis Research Park. Those two projects made him millions
Speaker 1: of dollars, which he plowed back into his rehel obsession.
Speaker 1: It still wasn't enough, though, so Paul tried to raise
Speaker 1: money from investors directly and through the internet by to
Speaker 1: Don't Two shares in the flying car company, Mueller International,
Speaker 1: were publicly trading in the US over the counter market,
Speaker 1: which is kind of like a second tier stock market.
Speaker 1: Things look great at first. He said he was personally
Speaker 1: worth four hundred million dollars at one point, but in
Speaker 1: two thousand three, the SEC sued Paul in his company.
Speaker 1: The SEC alleged that he was misleading investors by making
Speaker 1: bold predictions that never came true. For example, they claimed
Speaker 1: he said the stock would list on the Nastack the
Speaker 1: top tech market, but it never was. They said Paul
Speaker 1: projected sales of ten thousand flying cars by two thousand two,
Speaker 1: Actually they didn't sell any. The SEC also said he
Speaker 1: raised money from unsophisticated, less wealthy people without the right
Speaker 1: public disclosure. That's also a big known it. The company
Speaker 1: ended up settling for fifty thousand dollars without admitting that
Speaker 1: it broke the law. Paul says he can't talk about it,
Speaker 1: but he can't seem to stuff himself. If you read
Speaker 1: the legal document everything else, we were not convicted or
Speaker 1: anything or even suggested the end. If you read the
Speaker 1: letter from our attorney and all the other things that
Speaker 1: appeared on the internet site, we were never charged with anything.
Speaker 1: Yet we still paid a fifty fine to decease and
Speaker 1: desist or whatever term they have it of something we
Speaker 1: never did. Still, the more we dug into Poul's funding
Speaker 1: efforts for the last twenty years, the more questions we had.
Speaker 1: Are you Are you a huckster? You? You are you
Speaker 1: an inventor? Like most entrepreneurs, you you operate in and
Speaker 1: world we're Optimism is your number one driving criteria, and
Speaker 1: I am, I must admit, extremely optimistic about how quickly
Speaker 1: things can happen. So if I'm a huckster, I'm diluting myself.
Speaker 1: We also quiz job and ever, founder of one of
Speaker 1: the hottest new flying car startups, job Aviation, and a
Speaker 1: former student of Paul's job been describes Paul as a
Speaker 1: visionary and an incredible engineer who poured his fortune into
Speaker 1: flying cars time and time again, and then ran a
Speaker 1: foul of securities laws through passion and lack of financial
Speaker 1: sophistication rather than malice. But he had a warning to Yeah,
Speaker 1: Joe Bend stressed that we shouldn't do a podcast that
Speaker 1: encourages regular people to invest in Paul's project. He didn't
Speaker 1: say why, but I got the message and I mentioned
Speaker 1: it to Paul. Well, that's sure enough, that's a fair comment.
Speaker 1: I have no problem with him saying that Paul's flying
Speaker 1: car business never really recovered. Fast forward to and shares
Speaker 1: of his public company, Moller International, are treating well below
Speaker 1: one cent down for more than five dollars. In two
Speaker 1: thousand two. Paul has also had a file for personal bankruptcy.
Speaker 1: One thing that has seen a come the hype over
Speaker 1: flying cars. This idea of consumer vehicles with vertical takeoff
Speaker 1: and landing capabilities is just as hot as it was
Speaker 1: back in until nine seventy eight, when airlines were just deregulated.
Speaker 1: The idea getting on an airplane and popping across the country,
Speaker 1: you know, to go somewhere, was you know, people dressed up.
Speaker 1: It was a very special thing. That was Rob Racket,
Speaker 1: co founder of a mobile charter aircraft booking service. So
Speaker 1: we've already made that leap, right, so it's not it's
Speaker 1: not terribly crazy to think that we can continue to
Speaker 1: make that leap. He spoke to a reporter Justin Bachman,
Speaker 1: on the sidelines of a conference Uber organized in April
Speaker 1: where Uber unveiled its ambitions to develop electric sky taxis
Speaker 1: that fly over cities. And that announcement came less than
Speaker 1: a year after our boss Brad Stone, who, as many
Speaker 1: of you know, co host this podcast, broke the news
Speaker 1: that the pages backing to flying car startups z Arrow
Speaker 1: and Kittie Hawk. We asked Paul about the sudden enthusiasm
Speaker 1: for flying cars again, because this is someone who's been
Speaker 1: working on this technology his entire life, and now these
Speaker 1: much younger engineers are coming in and dominating the headlines.
Speaker 1: I think it's the best thing in the world. And
Speaker 1: I and I know that we're going to join forces
Speaker 1: at some point with some of them, you know. Yeah,
Speaker 1: and maybe we joined forces with some of the companies
Speaker 1: like oh, We're Lived for example, or other ones were
Speaker 1: I'm willing to work. And I'm not one of those
Speaker 1: guys to say I want to have control of this company.
Speaker 1: I like to have some say in the company, but
Speaker 1: I've never success for me is having our vehicles in
Speaker 1: the air and and and and getting it making some
Speaker 1: some impact on on transportation. But then he still went
Speaker 1: on to criticize almost every single competitor out there. It's
Speaker 1: as stupid as design is never gonna work. It's absolutely
Speaker 1: need how not to do things. But it shows you
Speaker 1: can do anything if you want, if you don't really
Speaker 1: understand or an artis that's pulled. Dissing Lillium, a German
Speaker 1: flying car startup backed by Alex as Sale, the investor
Speaker 1: we heard from earlier. Alex says Lillium knows exactly what
Speaker 1: it's doing. One of Paul's major grapes is noise. He
Speaker 1: says most designs are still too noisy for cities, even
Speaker 1: if their electric engines are quiet, because they still need propellers.
Speaker 1: He specifically called out startup E Hanks four battery powered aircraft.
Speaker 1: You see the hand, big open propellers, then you're you're
Speaker 1: you're gonna have noise. You know, helicopters for over you
Speaker 1: hear that boo, that's that engine, that's blades. He Hank
Speaker 1: didn't respond to a quest for comment. Mark Moore, head
Speaker 1: of Uber Sky Taxi Project, chastised us for profiling Paul
Speaker 1: when there's so many exciting new flying car startups using
Speaker 1: more modern technology. He called Paul's rotary engines dinosaurs of
Speaker 1: the past, but Paul argues his hybrid approach is best
Speaker 1: using batteries and rotary engines rather than just battery power.
Speaker 1: Rotary designs are smaller, lighter, and more powerful than traditional
Speaker 1: internal combustion engines. Paul says battery technology isn't capable of
Speaker 1: providing both the intense short term thrust needed to get
Speaker 1: cars airborne and the steady umph to make them fly
Speaker 1: reliably for long distances. We have a very difference of
Speaker 1: opinion what batteries gonna do. He his vision if he's
Speaker 1: setting up Uber, is that batteries is gonna do these
Speaker 1: magic things, and they're going to have flying cars to
Speaker 1: moral going every which way it is. Mark Moore said
Speaker 1: Uber is focusing on gridlock cities where flying cars need
Speaker 1: no more than a sixty mile range. He predicted that
Speaker 1: advanced batteries will be able to handle vertical liftoff and
Speaker 1: those shorter ranges in the next five years. So this
Speaker 1: future of skipping traffic in sky taxi is still always away.
Speaker 1: The biggest difference between Paul and Mark is their access
Speaker 1: to money. Mark is backed by Uber, which has raised
Speaker 1: billions of dollars in recent years, while Paul can barely
Speaker 1: scrabble together the money needed for a single regulator approved
Speaker 1: test flight. Paul even had to sell his large flying
Speaker 1: car headquarters to raise money to keep his project alive.
Speaker 1: The lost I had to ranch properties. I had my
Speaker 1: facility in Davis, which was a thirty five square five
Speaker 1: thousand facility, and I just borrowed so much. I guess
Speaker 1: it was better to just let it go for auction. Uh,
Speaker 1: to get rid of, you know, of my personal debt.
Speaker 1: Get reliable about five million dollars a personal debt. By
Speaker 1: letting get be sold. A couple of his flying cars
Speaker 1: were still at the old location, so we drove over there.
Speaker 1: This is the site of his former glory. He even
Speaker 1: built a racquetball court there. To stay fit today, he
Speaker 1: has to sign in at the front desk, just like
Speaker 1: anyone else. It looks a little different in here, doesn't
Speaker 1: of all everything I got through, I know, returned this
Speaker 1: area into a little kind of dinet kitchen area. Yeah,
Speaker 1: and your old office is now a baby conference room.
Speaker 1: Right is one of my original employees. He worked from
Speaker 1: from years started and do you work for and he
Speaker 1: works for us? Do when you bring we're more consultant position.
Speaker 1: Once past security, he led us through the main hanger,
Speaker 1: which is about the size of a football field and
Speaker 1: multiple stories high. There two of his creations gathered dust
Speaker 1: beside old machinery and newer equipment belonging to the current occupant.
Speaker 1: Time is running out for pool, at least by traditional
Speaker 1: standards of human longtivity. Paul is eighty but looks a
Speaker 1: lot younger, with light brown hair and a brown beard
Speaker 1: which he had missed the coloring occasion, and he's planning
Speaker 1: to outlive most of us. There's a white board in
Speaker 1: his office with a list written in large green letters. Exercise,
Speaker 1: water pills, clear squats, powder and sardines. Well, that's that's
Speaker 1: my daily list that I have to make sure that
Speaker 1: I that I deal with it. Exercise, water pills. And
Speaker 1: when I say pills, there you know, as I said,
Speaker 1: I take probably sixty different pills a day. Made up
Speaker 1: of maybe a hundred different things that are in it. Still,
Speaker 1: I had to ask about succession plans, and I've had
Speaker 1: really good people working for me, and I know what
Speaker 1: to look for so I can build up a team.
Speaker 1: They could do that, and I really want to do that.
Speaker 1: I particularly want to build up a management team because
Speaker 1: there's something happens to be The question is your how
Speaker 1: is the company process to go forward? And so I
Speaker 1: clearly have to make it within this year. This is
Speaker 1: my this is my year to make this happen. He's
Speaker 1: pinning his hopes on the rotary and in technology that
Speaker 1: we mentioned earlier. The engine is gonna go It's gonna
Speaker 1: go big, and I've got a contract that theoretically is
Speaker 1: thirty forty five days away million dollars to put the
Speaker 1: engine into mass production. This was in May, and Power
Speaker 1: Source Creations, which is the company Paul said was providing
Speaker 1: these millions of dollars, was not very forthcoming. When our
Speaker 1: reporter Isabelle Gottlieb called to ask about its planned investment.
Speaker 1: A Power Sols executive Christine Pereira, described it as an
Speaker 1: agreement rather than an investment. Then she said she wasn't
Speaker 1: at liberty to give any more information and abruptly hung up.
Speaker 1: We checked in July and the power Source steel hadn't
Speaker 1: happened yet. The company put out a statement on June
Speaker 1: saying that unspecified bank cyber attacks had caused delays. The
Speaker 1: very nature of the investment. It's quite a complex and
Speaker 1: quite uh confidential program for reasons that we don't entirely understand.
Speaker 1: But we're very comfortable. But again, I can't say it's
Speaker 1: going to happen the next fifteen days. I could say
Speaker 1: we're pretty comfortable is going to happen the next forty
Speaker 1: five days, But that's the best I could say at
Speaker 1: the moment. About a week after the power Source update,
Speaker 1: we spotted another bad sign. Paul's original M four hundred
Speaker 1: sky car was offered for sale on eBay for five
Speaker 1: million dollars. The listing described it as a quote true
Speaker 1: museum piece, and it had a major caveat. It said,
Speaker 1: in this original form it does not have f A
Speaker 1: A approval, and a condition of this offer is that
Speaker 1: it cannot be flown where you need the flexibility to
Speaker 1: land and take off at other than conventional airports. Then
Speaker 1: this is the future, but the road to this future
Speaker 1: has been long and winding, and one man has kept
Speaker 1: following it longer than most. I've always had this desire
Speaker 1: to build this vehicle and make it working only one.
Speaker 1: It's sticking me a bit longer than I planned, But
Speaker 1: Moehler will be back in pursuit of one version of
Speaker 1: the American Dream. John Blackstone, CBS News, Davis, California. And
Speaker 1: that's it for this week's Decrypted. Thanks for listening, and
Speaker 1: if you haven't already, subscribed to our show wherever you
Speaker 1: get your podcasts, and while you're there, leave us a
Speaker 1: rating and a review. This helps us so much to
Speaker 1: reach more listeners and tell us what you thought at
Speaker 1: today's episode. You can email us at Decrypted at Bloomberg
Speaker 1: dot net, or you can reach out to me on Twitter.
Speaker 1: My handles aki eto seven and I'm Alistair m bar.
Speaker 1: This episode was produced by Peter get, Carrie, Liz Smith
Speaker 1: and Magnus Hendrickson. A special thanks to Isabel Gottlieb, who
Speaker 1: helped us with the research and reporting for today's show.
Speaker 1: Alec McCabe is head bloom Berg Podcasts. We'll see you
Speaker 1: next week.