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Tesla’s top manufacturing executive departs at the worst possible time

Published Apr 27th, 2017 4:42PM EDT
Tesla Model 3
Image: Ena/AP/REX/Shutterstock

With the Model 3 release just a few months away, there’s been an interesting executive shake-up over at Tesla. According to a new report from Reuters, newly minted executive Klaus Grohmann left the company last month after butting heads with Tesla CEO Elon Musk over company strategy. For some relevant context, recall that Tesla bought Grohmann Engineering this past November in an effort to improve automation and increase efficiency across Tesla’s manufacturing process.

“This will really be our first acquisition of significance in our whole history,” Musk said at the time, later adding that the company’s engineering expertise will help the company “build the machines that build the machine.”

Indeed, Grohmann Engineering’s expertise will not only help Tesla ramp up Model 3 production, but will also help the company meet it’s wildly ambitious goal of manufacturing 500,000 cars in 2018 alone.

As for the reason behind Grohmann’s departure, well, that’s where things get a bit tricky. Shortly following the acquisition, Tesla announced that it had no plans to renew contracts with any of Grohmann’s existing clients, some of whom had long working relationships with the German-based company. This naturally led to some concern amongst Grohmann engineers, ultimately prompting Elon Musk to pen a letter to employees claiming that Tesla shares might see a 10-fold increase over the next few years.

Tesla planned to keep Grohmann on, and Grohmann wanted to stay, but the clash with Musk over how to treat existing clients resulted in his departure, the source said.

Grohmann disagreed with Musk’s demands to focus management attention on Tesla projects to the detriment of Grohmann Engineering’s legacy clients, which included Tesla’s direct German-based rivals Daimler and BMW, two sources familiar with the matter said.

In a statement on the executive shuffle, a Tesla spokesperson said: “Part of Mr Grohmann’s decision to work with Tesla was to prepare for his retirement and leave the company in capable hands for the future. Given the change in focus to Tesla projects, we mutually decided that it was the right time for the next generation of management to lead.”

Meanwhile, Tesla Model 3 mass production remains on track to begin in just three months with deliveries to early reservation holders expected to begin in late 2017.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.