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Tesla Is Cutting Staff But Still Aiming to Increase Production

Illustration for article titled Tesla Is Cutting Staff But Still Aiming to Increase Production
Photo: Sean Gallup (Getty)
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Elon Musk is letting employees know that staff cuts mean it’s time to start working harder, Carlos Ghosn may have actually screwed up after all, Nissan is chopping staff numbers and Colorado is going electric. All this and more in The Morning Shift for Friday, Jan. 18, 2019.


1st Gear: Tesla’s Full-Time Staff Count Is About to Drop

It looks like Tesla isn’t out of the woods yet. While there was room to grow after the difficult year that was 2018, it sounds like Tesla might actually be shrinking operations. Tesla shares have fallen eight percent, the Model S and Model X are losing their base 75 kWh battery package, they’ve dropped prices, and its vehicles are no longer eligible for the EV tax credit.


Now, though, Tesla is cutting seven percent of its full-time staff—while still expecting employees to increase production. Here’s what CNBC reports:

In an email to employees, Musk notes that the company faces a “very difficult” road ahead in its long-term goal to sell affordable renewable energy products at scale, noting the company is younger than other players in the industry.

“Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Musk said in the company update.

The full text of Musk’s email is available to read here, if you’re interested.

There’s no word on exactly how many employees will be laid off, but if Musk’s October tweet that 45,000 folks worked for the company is still relevant, that would put the number at around 3,150 layoffs.


2nd Gear: Mitsubishi Is Accusing Carlos Ghosn of Taking a Hush-Hush $9 Million Payment

You can’t escape Carlos Ghosn these days. The former Chairman and CEO of Nissan has been in trouble with the law for charges of understating his salary and transferring his own investment losses into the Nissan books. Ghosn has denied everything, and it hasn’t been totally clear if he’s been the victim of a conspiracy or not.


Well, until now. Mitsubishi’s chief executive Osamu Masuko is now suing Ghosn for drawing up the employment contract for a Nissan-Mitsubishi venture that gave Ghosn a secret payment of €7.8 million (the equivalent of USD $9 million), according to The New York Times:

The joint venture had been set up to distribute part of the savings generated by Nissan’s 2017 acquisition of Mitsubishi to the departments at the automakers that generated the savings, a kind of incentive scheme to bring the companies closer together.

The joint venture’s other directors — Mr. Masuko and Nissan’s chief executive, Hiroto Saikawa — were unpaid and kept in the dark about Mr. Ghosn’s compensation, according to Mitsubishi. The company learned about the payment only after Nissan shared the findings of its internal investigation into Mr. Ghosn, it said.


It’s not abundantly clear if Ghosn actually broke any laws. The joint venture was based in the Netherlands, which brings in more legal variables than are already at play. Masuko feels there may be something to be gained from taking legal action, though, given that no one was aware of Ghosn’s actions.

It certainly isn’t a good look for a man who has already been removed from his chairman positions and Nissan and Mitsubishi and who has been jailed several times in the last few months.


3rd Gear: Nissan Slashes 700 Workers from One of Its U.S. Factories

Nissan Motor Company is planning to cut as many as 700 workers from a factory in Canton, Mississippi in the face of its own economic and legal struggles around the world.


The specifics are reported by Bloomberg:

The Nissan assembly plant in Canton, Mississippi, will eliminate one shift of Titan and Frontier pickup production, and drop one shift building the NV passenger and cargo vans, according to Lloryn Love-Carter, a Nissan spokeswoman. All direct employees will retain their jobs and only contract workers will be dismissed, she said by phone.

Nissan is approaching the two-month mark since the arrest of its longtime leader Carlos Ghosn, who faces the potential of more jail time in Japan for alleged financial crimes. Last week, Jose Munoz, Nissan’s former chief performance officer and top executive for North America, abruptly resigned.


In an era where trucks are the vehicles making automakers the most money, Bloomberg’s report highlights how badly Nissan is struggling. Nobody is buying their trucks:

In 2018, Nissan sold a total of 165,635 Frontier and Titan pickups and NV vans in the U.S. While the company also exports Canton-built vehicles to other countries and the plant makes other models, that sum is well shy of the factory’s capacity to build 450,000 cars, trucks and vans annually.

The Titan has been a disappointment relative to targets Ghosn set for the pickup after a 2015 redesign and faces stiff competition from refreshed full-size models from Fiat Chrysler Automobiles NV and General Motors Co. The smaller Frontier also is at risk of losing midsize truck shoppers to Ford Motor Co.’s revived Ranger and Fiat Chrysler’s new Jeep Gladiator.



4th Gear: Colorado Is the Next State to Mandate EV Sales

The tenth state to follow in California’s footsteps, Colorado governor Jared Polis has signed an executive order proposing that the zero-emissions-vehicle rule be enacted no later than May of 2019. The goal here is to force automakers into selling more electric vehicles by expanding on a clause in the U.S. Clean Air Act that allows states to make their own rules separate of the federal government.


The specifics are reported by Bloomberg:

The mandate would make Colorado the 10th state to join California’s electric-car posse that’s enacted rules requiring automakers to sell more electric cars each year. California regulators estimate the program will lead to pure-electric and plug-in hybrid cars accounting for 8 percent of auto sales in the state by 2025.


This group and other states are positioning themselves as a bulwark against the Trump administration’s push to ease cleaner-vehicle rules. Federal regulators have proposed capping national fuel-economy and carbon-emissions requirements for new autos at a 37 mile-per-gallon fleet average after 2020. Standards set by the Obama administration would’ve increased the average to 47 mpg by 2025.


Polis also allocated a portion of the $70 million the state received from Volkswagen’s emissions scandal settlement to support a more electrified infrastructure. That means the development of electric transit buses, school buses, and trucks.

5th Gear: Mercedes A-Class Is Going to the Super Bowl

Sedans are a dying breed, but Mercedes is determined to make their A-Class into an underdog story. That’s right: They’re sending to A-Class to the Super Bowl in the form of the automaker’s commercial.


I mean, it only makes sense—the game is taking place on February 3 at the Mercedes-Benz Stadium in Atlanta, after all.

Autonews reports some additional information regarding the commercial:

The A class will have to share the 60-second spotlight. Atlanta-based rapper and Grammy Award winner Ludacris will make a guest appearance in the commercial. “Luda,” as he’s called, is a Mercedes-Benz brand ambassador.


The A-Class is being marketed to millennials as a gateway vehicle to the rest of Benz’s luxury cars. Loaded with tech and starting at $33,495, the Super Bowl appearance is Mercedes’ attempt at becoming more relevant to the younger folks.

Reverse: Eugene Ely Makes the First Successful Take-Off and Landing of an Aircraft on a Ship


Neutral: Where Does Telsa Fit Into the Future of EVs?

The Tesla name is pretty much synonymous with electric cars, but its status as leader of the EV world could be threatened by the emergence of so many incredible all-electric concepts, some from automakers we already know and love. Is Tesla still going to be leading the charge, or is it going to take a backseat in the race to electrify?

Weekends at Jalopnik. Managing editor at A Girl's Guide to Cars. Lead IndyCar writer and assistant editor at Frontstretch. Novelist. Motorsport fanatic.

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I’m curious to see if millennials will indeed be enticed by a $33k Mercedes. My guess is no.