What Is Tesla Without Elon Musk?

Photo via Getty Images
Photo via Getty Images
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Tesla without Elon Musk, Cadillac’s reinvented reinvention, Ford’s workers could take a hit, Audi may finally ditch a guy in jail and much, much more for The Morning Shift on Friday, Sept. 28, 2018. Hoo boy it’s Tesla time again.


1st Gear: Tesla Has No Clear Backup Plan

Following the Securities and Exchange Commission filing a lawsuit against Tesla CEO Elon Musk for alleged securities fraud, with a hard target on ousting Musk from a role as director of officer of the company, a lot of questions that have come up over the past few months about what Tesla would look like without Musk may finally need to be answered.

The worry among investors now is that Tesla’s leadership is too closely tied to Musk and his increasingly erratic behavior, but granting him more power has been a conscious shareholder decision. Earlier this year, shareholders rejected splitting up Musk’s position and reducing his power, and if he gets kicked out it’s now unclear where the company would go, as Bloomberg points out.

From Bloomberg:

“If Elon Musk resigns or is not the CEO, Tesla is a
fundamentally different company that is less attractive to us,”
said Ross Gerber, chief executive officer of Gerber Kawasaki in Santa Monica, California, which holds Tesla stock.


“There’s a 50-50 chance Musk gets removed as CEO but
there’s a 95 percent chance that he stays at the company,” said
Gene Munster of Loup Ventures. “I think the SEC lawsuit has
scared people. This may give the board the backbone to put Musk
in a visionary role. Shareholders want him to stay on as the


“Without Elon, Tesla would be a debt-laden automaker that’s
burning a ton of cash,” said David Whiston, an analyst with
Morningstar Inc. in Chicago.

“There’s a ton of risk for the stock because the Tesla
story is all about continuing to gain access to the capital
markets,” he said. “As a potential investor, do you really want
to invest in this company without Elon Musk? Personally, I think
it would be very dangerous to do so.”

Tesla’s board claimed to be “fully confident in Elon, his integrity, and his leadership of the company,” despite Musk’s extremely volatile behavior and the extreme consequences he and his company now face.

2nd Gear: Musk Could Have Settled With the SEC But Just... Didn’t

Speaking of the SEC’s suit against Musk, he was working out a settlement with them but apparently backed out at the last minute, CNBC reports:

Tesla and the Securities and Exchange Commission were very close to a no-guilt settlement Thursday, reported CNBC’s Andrew Ross Sorkin on Friday, citing sources. But, these people say Musk pulled out of the agreement at the last minute.

Under the terms of the deal, Musk and Tesla would have had to pay a nominal fine, and he would not have had to admit any guilt. However, the settlement would have barred Musk as chairman for two years and would require Tesla to appoint two new independent directors, reported CNBC’s David Faber, citing sources.

Musk reportedly refused to sign the deal because he felt that by settling he would not be truthful to himself, and he wouldn’t have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said.


While it’s almost impossible to fathom the shitstorm that would come from Musk willingly stepping away from Tesla for two years, maybe it would have been good to have the company focus under new leadership and coast along with the new Model 3 until he returned.

Of course, there’s always the risk he wouldn’t return, and now that possibility almost seems more likely since he backed out of this deal. But at least he knows what his inner truth is. I respect that.


3rd Gear: Cadillac Reinvents Itself, Again

Cadillac once again seeks to be a global luxury brand worthy of being cross-shopped with Mercedes and Audi and the sort. Its new approach involves moving back to Detroit from New York and resting its hope on vehicles like the Cadillac XT4, a $35,000 compact crossover.


But in a surprisingly scathing Bloomberg piece, it is noted that this is the eighth time since about the ‘90s that Cadillac has tried to “reinvent itself.” The marketing-heavy New York fashion shit didn’t work, and neither did the multitude of attempts before that.

As the auto industry maybe moves to a future where brands don’t matter, since we’ll all be in autonomous on-demand pods, how many more chances should Cadillac get?


Via Bloomberg:

For at least the eighth time in two decades, General Motors Co. has a new brand chief vowing to reboot Cadillac, the once-storied luxury name that has been losing market share and prestige for years. GM promises a $12 billion parade of new models, with the perhaps most significant being a smaller, cheaper sport utility vehicle that turns on its head everything Cadillac has historically stood for.

There also will be revamped advertising, including a fresh tagline — not yet revealed — to replace the sleepy “Dare Greatly” campaign. The strategy kicks off with the millennial-aimed XT4 SUV, followed by five more models.


Bob Lutz, GM’s favorite retired vice chairman, even chimed in to shit on the infamous “Dare Greatly” advertising campaign:

The brand’s advertising theme has hardly helped, according to Bob Lutz, the retired GM vice chairman. In some video ads, viewers wouldn’t even see a Cadillac until halfway through the video, he said.

“‘Dare Greatly’ has been a disaster from beginning to end,” Lutz said. “When you have product that is in many ways better than the competition, you tell people about it. You don’t dare them to take a leap of faith on your cars.”


We’ve come a long way for Cadillac to be betting on a compact crossover for survival, but sadly it makes sense for the brand for survive. Or at least, it did about five years ago, but Cadillac is only just now getting new crossovers and SUVs to market. Until the XT4 dropped it only had two, including the huge and expensive Escalade.

Lutz also chimed in to say, “I don’t think there are enough decades left in the branded automobile business as we know it to achieve a comeback,” and I think I may agree.


4th Gear: Ford Workers Could Take a Big Hit On Bonuses From Tariffs

Following Ford’s announcement that Trump’s tariffs on steel and aluminum could cut profits of up to $1 billion for the automaker, that also could spell bad news for unionized Ford workers expecting a bonus, as Automotive News points out:

The math is pretty simple. For every $1 million in North American profits that Ford posts each year, the average worker gets a $1 bonus the following spring, according to the formula written into the UAW’s contract. In 2017, Ford earned $7.5 billion in North America, which resulted in $7,500 profit-sharing checks for its 54,000 UAW hourly workers.

So if Ford earns $1 billion less in North America — where it’s now paying higher commodity costs as a result of the tariffs, even though it already buys 95 percent of its steel from within the U.S. — its profit-sharing payouts would drop by $1,000. The tariffs are designed to make more companies buy commodities such as steel from domestic sources, which Ford already does, yet its workers are going to earn less than they would have otherwise. The tariffs have caused prices for steel and other materials to rise, no matter where they’re made.


I’m not sure how undercutting America’s biggest automaker by a billion dollars and throwing away worker bonuses is making the country great again, and I’m not sure Ford has any real options in this situation, it and its workers are just getting screwed.

5th Gear: VW Lawyers Work Out How to Fire Former Audi Boss

Volkswagen Group is expected to announce the overdue termination of Rupert Stadler, the Audi executive jailed in June for allegedly trying to tamper with witnesses during the Dieselgate scandal investigation, according to the Wall Street Journal.


It’s unclear why it took so long to get around to it, but the announcement is expected soon, pending a meeting of VAG’s directors today. From the WSJ:

The announcement is expected to come after a meeting of Volkswagen’s directors in Wolfsburg on Friday, but could still be delayed over technical issues, the people said. There is, however, no doubt that Mr. Stadler’s long career at Volkswagen and Audi was over, they said.

“It is out of the question that Rupert Stadler can come back from this,” one of the people said. “The discussion now is just about how to terminate his contract, it’s up to the lawyers.”

Mr. Stadler’s attorney didn’t immediately respond to a request for comment.

Cutting ties to Mr. Stadler, a long-serving Volkswagen executive who stood at the helm of Audi since 2010, is the latest move by the German car maker to put the three-year-old diesel affair behind it. It also highlights how German authorities continue to widen their criminal investigation of Volkswagen and Audi and how the diesel cloud continues to hang over the German auto industry.


It’s perfect timing, though, as the German government closes in on negotiations to retrofit older diesel models to comply with current emissions regulations, at the expense of automakers, the WSJ reports.

You have to assume Stadler knew this was coming, right?

Reverse: Inventor of America’s First Gasoline-Powered Car Dies


Neutral: Is Cadillac Out of Time?

Do you think Cadillac has run out of time, like our buddy Bob Lutz seems to believe?

Reviews Editor, Jalopnik


For Sweden

Tesla without Elon Musk is a future subsidiary of Toyota