During a meeting with Donald Trump, Elon Musk provided an example of inefficiency in the US administration. He pointed to the system for processing federal employees’ pension records.
Currently, this is done manually, and the applications are stored in a former limestone mine in traditional paper form. According to Musk, the facility looks like it was transported from the 1950s. It was built in 1955 and has not changed much since then, according to CNBC.
In Musk’s opinion, the system is inefficient. It can process up to 10,000 retirement applications per month. However, the DOGE boss did not indicate how many documents an “efficient” system should be able to process. It is worth noting that 10,000 to 11,000 people retire every day in the United States, but only a small proportion of them are federal employees.
Nevertheless, Elon Musk described the situation as absurd. “The rate of retirement depends on whether the elevatoris working,” he said during a meeting with journalists at the White House. He suggested that employees could do more productive work for the country instead of carrying paper files in a mine.
The Pennsylvania mine in question is located less than an hour from Pittsburgh. It stores pension documents at a depth of over 65 meters below ground. The company that manages the facility advertises it as having the highest level of safety and protection against disasters. Currently, over 700 people work there.
Market reaction and outlook
Iron Mountain, the company that manages the mine, saw its share value drop after Musk’s statement. However, its CEO Bill Meaney sees this situation as an opportunity for growth. During a conference call on Thursday, he explained that the company’s revenue from digitization services and data centers reached $130 million, while the storage of physical documents only brought in $10 million a year.
Wall Street analysts believe that the market’s reaction to Musk’s statement was exaggerated. Eric Luebchow of Wells Fargo noted that Iron Mountain’s revenue is not dependent on a single customer, so the issue of possible digitization of federal records is not an issue.
Stock analyst Bill Meaney emphasized that Iron Mountain works with over 200 federal agencies as a direct supplier or subcontractor. The company also carries out hard drive destruction programs for state administrations. Brendan Lynch from Barclays added that the government has a legal obligation to store the documentation that Iron Mountain currently manages.
