Recent incidents of crash with Tesla electric cars and the departure of senior executives from the company together with the production problems has forced company CEO and founder Elon Musk to announce that the company was undergoing a “thorough reorganization” to tackle the problems. Musk reportedly told this to his employees.
In an email to the company employees, Musk said Tesla was “flattening the management structure to improve communication,” merging functions and reducing activities that are “not vital to the success of our mission” within the reorganization.
The first news of the email was reported by the Wall Street Journal and the company subsequently confirmed the contents of the mail.
The launch of its Model 3 sedan has not been impressive despite the fac that the success of this mid-market car is vital for the company’s success and potential for future profits even as the company has been grappling with initial production hiccups. In that context this is a critical phase in the life of Tesla.
There was a fall of 3 per cent in the shares of Tesla at Monday closure.
And amidst such a troubled time, some of the senior executives of the company have left it or have cut back work. Matthew Schwall, in charge of maintaining liaison with the U.S. safety investigators joined Alphabet Inc’s self-driving unit Waymo, the company said on Sunday.
And some time off work to recharge was taken last week by senior vice president of engineering- Doug Field. Tesla said.
At this moment, a number of new vehicles are being developed by tesla which includes a semi truck, and it has also got a new car unit registered in Shanghai in an apparent move to get into Chinese production.
Without giving out any details, Musk said that Tesla would conduct “a reorganization restructuring” in May, during a May 2 earnings call.
He said that the company would be shelving a number of third party contracting firms associated with Tesla after comparing them with “barnacles” that required scrubbing off.
Musk said in Monday’s email that the company would however hire more people fast in critical positions “to support the Model 3 production ramp and future product development.”
There are multiple other issues being faced by Tesla that include safety investigations by regulators and enhanced doubts about its financial position.
The company has altered terms of debt with banks so that it is able to put up its Fremont, California, auto plant as collateral security.
Claims by Tesla that crashes could be significantly reduced by its Autopilot technology were rebuked by a U.S. traffic safety regulator on May 2.,
Tesla has said earlier that its Autopilot technology is a technology that allows a car to remain on cruise control and one that takes care of some driving tasks but has issued warning that the technology is not a complete substitute for human intervention in safe operation of cars.
A report published in the Wall Street Journal claiming the rejection by Tesla of a technology that would track eye movement of drivers while driving on Autopilot because of the costs involved was rejected by Musk through via a Twitter post on Monday.
“This is false,” Musk wrote. “Eyetracking rejected for being ineffective, not for cost. WSJ fails to mention that Tesla is safest car on road, which would make article ridiculous. Approx 4X better than avg,” Musk said.
(Adapted from Reuters.com)