Green-vehicle manufacturer Tesla does dirty by its staff
Tesla, the buzzed-about clean-tech electric car maker, has delayed its S-model sedan, demoted its CEO, and closed its Michigan office -- the last action, via blog post.
Even in a world were romantic breakups via text messages aren't uncommon, the message from company chairman Elon Musk has stirred outrage. Meanwhile, the nature of the dismissals -- the Rochester Hill, Michigan office housed the engineering team working on the new midrange ($60,000) vehicle -- raised eyebrows among some observers who see a pattern in canning the tech employees rather than the money guys.
Statements from Tesla indicate that the firm will concentrate on making its current Roadster two-seater "a positive cash flow, core product," according to the company's head of sales and marketing. The company will maintain its newly opened San Jose offices, where it still plans to manufacture its vehicles.
In his blog post, Musk was terse concerning the contributions of the Michigan staff, saying only that "Good communication, tightly knit engineering and a common company culture are of paramount importance as Tesla grows" and describing his wish that the company would adopt a "special forces philosophy."
In his blog, Paul Rako didn't hold back with his disgust at Musk's choice of layoff targets. "Any tech worker can read between the lines and see what is going on," he writes. "After thousands of hours of free overtime and I am sure 100s of all-nighters, the tech staff has made a workable electric vehicle. Now the finance guys that seem to run the world have decided to fire all the engineering staff and go into "harvest mode". They are blaming the economy and credit markets, but the real reason is that they mismanaged the project. But things are never the finance guy's fault. Ever."
Rako's post compared the carnage to Seagate's mass layoffs in the '90s, in which short-term financial gains were lost (and, many observers would suggest, irreparable damage done to a once-great brand) when the company realized it had no one left to design the next generation of products.
As for Musk's unorthodox means of communication, the (moderated) comments thread in that blog post focused on the machinery, not the message. 'Dave' pointed out that the company is getting the fuzzy end of the lollipop where large-scale financial bailouts are concerned: "There's a sad irony that while the US government approves $25 billion for the Detroit Big 3 to bail them out from their own greed and mistakes, Tesla is having to lay off staff and push back production schedules on much-need technology because of arbitrary hurdles to access its own (tiny by comparison) loan."
The first Roadsters were delivered to customers in February, and about fifty of the $109,000 sports cars have been sold. Musk plans to keep the company going during the current financial crisis in part by ramping up production on the Roadster to 1,800 vehicles.
The Michigan office employed 30 people; on Friday (two days after the layoff announcement), employees there were scheduled to see a list on a cork bulletin board in their offices detailing whether each employee's layoff was effective immediately or after a wrap-up period -- or if some might be offered positions in San Jose.
Now-former CEo Ze'ev Drori retains his seat on the board and assumes the title of vice chairman.