Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: ‘It Is The Right Thing For The Company’
I’ve never been a boss, but I imagine it’s never easy to fire people, and I’m sure it’s even harder when you announce the largest amount of layoffs in your company’s history. That’s what happened this week to Tesla, which said on Tuesday that it had to let go of 9 percent of its employees (about 3,600 approximately) as part of “an effort to reduce costs and become profitable.”
That’s how billionaire CEO Elon Musk summed it up in a companywide email Tuesday afternoon. Perhaps surprisingly, the move drew praise from some employees, as Bloomberg pointed out:
Some of those who lost their jobs have had surprisingly positive parting words to share with the chief executive who let them go.
“It is the right thing for the company,” wrote Kevin Throop, a sales manager who had been at Tesla since 2014. He was replying to a tweet from Elon Musk announcing the termination of 9 percent of the workforce. “I don’t regret giving all I had and in a way bidding adieu is my last contribution.”
Another wrote to Musk:
Thanks for the opportunity, Elon! Eye on the mission. Will always be proud to say I worked for Tesla.
I just want to let you know that I really enjoyed working for Tesla.
To be sure, the positive sentiment wasn’t universal; we heard from several employees who were caught off guard and upset by what they said was a sudden termination.
Here’s one example Bloomberg cited as well:
Everyone is commenting on how transparent you were You know who didn’t know? My husband who was at work for Tesla today. I saw it on Twitter while he was on a conference call with tons of people who were given no new opportunity 2 hours before the end of their day.
If I had to guess, this might piss them off a bit more:
Tesla Inc. TSLA, +1.03% Chief Executive Elon Musk purchased more than 70,000 shares of his company while announcing layoffs of nearly 10% of employees in a reorganization. In a Wednesday filing with the Securities and Exchange Commission, Tesla disclosed that Musk had purchased 72,500 shares on Tuesday and Wednesday at weighted average prices ranging from $342.78 to $347.01. All told, Musk spent roughly $25 million on the shares a month after buying $10 million in Tesla stock on the open market in a move he presaged with a challenge to short sellers.
Of course, Musk has every right to do as he pleases with his loot. Business Insider described it as a possible “strategic move on Musk’s part to reaffirm to workers and critics alike that he’s still optimistic about the future of the company—an important signal as Tesla works to hit crucial production targets of its next-generation Model 3 electric vehicle.”
Maybe. But dropping $25 million on a moment’s notice doesn’t really jibe with the feeling that We’re All In This Tough Moment For Tesla Together that Musk espoused in the email Tuesday.
2nd Gear: UAW Picks A New Leader
The United Auto Workers is trying to work its way through a massive federal corruption probe right now, and on Wednesday it picked a new slate of leaders to helm the ship at a troubling time.
From Automotive News:
UAW delegates on Wednesday overwhelmingly elected a leadership-approved slate of officers that includes unconventional candidate Gary Jones, a regional director, as president.
Opposition to the UAW administrative caucus-selected slate, including two floor-nominated presidential candidates, gained little traction here at the union’s 37th Constitutional Convention, despite a widening federal probe into joint training centers run by the union and Detroit automakers. The probe focuses especially on the center operated by the union and Fiat Chrysler Automobiles.
The officers will handle negotiations with FCA, GM and Ford next year, Automotive News reports.
3rd Gear: Ghosn To Reportedly Step Down From Renault
Carlos Ghosn has plenty of damn jobs to keep him busy, but according to a report from The Financial Times, he’ll be stepping aside from one of those roles by 2022.
Carlos Ghosn is likely to step down as chief executive of Renault before his term ends in 2022, the long-serving car boss has told the Financial Times.
Mr Ghosn, who also chairs Nissan and Mitsubishi Motors as well as a global alliance of the three groups, said he did not expect to spend “four more years” at the helm of the French carmaker.
In stepping back, Mr Ghosn would formally relinquish operational control of the carmaker he has led since 2005, and has grown into one of the industry’s largest players through its partnership with Nissan and, more recently, Mitsubishi.
That’s not to say he’s completely removing himself from the picture. The Financial Times says Ghosn will remain Renault’s chairman, and he’ll maintain the position of chief executive for the Renaul-Nissan-Mitsubishi alliance. Surely, he’ll be fine.
4th Gear: Ford And Daimler Won’t Work On Fuel Cells Together Anymore
Fuel cell technology is one of those long-running but still-very-off-in-the-distant-future ideas, and two major automakers are winding down an effort to develop the tech, reports Reuters.
Ford Motor Co and Daimler AG are winding down a joint venture formed to develop automotive fuel cell technology, Ford said on Wednesday, as both companies plan to take their respective fuel cell technology development in-house.
The Automotive Fuel Cell Cooperation Corp venture, based in Burnaby, British Columbia, will close this summer, Ford said in response to an inquiry by Reuters.
Despite years of research and investment by major automakers and startups, vehicles powered by fuel cells remain a tiny niche in the global vehicle market.
Yeah, it’s hard to justify when fuel cells only make up a small fraction of auto sales. With electric vehicles the focus of just about every automaker right now, I think it may be a fool’s errand at this point.
5th Gear: VW Gets Another $1.2 Billion Fine For Dieselgate
It’s like the 99 Bottles Of Beer On The Wall but for car scandals. We’re still singing this damn, awfully expensive song.
Per The New York Times:
Even after Volkswagen was hit with billions of dollars in penalties in the United States over an emissions-cheating scheme that continues to unfold, the company remained mostly unpunished in Europe.
That changed on Wednesday, when German prosecutors said they had imposed a fine of 1 billion euros, or $1.2 billion, on the carmaker for failing to properly supervise the employees who devised and deployed illegal software in diesel models to evade pollution controls. In a statement, the Braunschweig state’s attorney’s office described the penalty as one of the largest ever imposed on a company in postwar Germany.
It’s minuscule compared to the $26 billion VW has dropped in the U.S., but $1.2 billion is still a whole lot of cash. Looking forward to my 85th birthday in 2075, when VW is still getting fined for cheating diesels.
Reverse: Fun Movie
Neutral: Elon’s Employees Gushing For Him
I’ve never been fired from a job, but if I got laid off on a day my boss buys $25 million in stock, I’d be pretty annoyed. Is there a job you’d sing the praises of, even after getting canned?