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Transportation Businesses

Tesla's German Automation Expert Klaus Grohmann Ousted After Clash With CEO Musk (reuters.com) 69

According to Reuters, "Tesla executive Klaus Grohmann was ousted last month after a clash with CEO Elon Musk over the strategy of Grohmann's firm, which Tesla had acquired in November." Grohmann Engineer's automation and engineering expertise is being relied upon by Tesla to help it increase production to 500,000 cars per year by 2018. From the report: 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. "I definitely did not depart because I had lost interest in working," Grohmann said, without elaborating. A Tesla spokesman, asked about Grohmann's departure, praised him for building an "incredible company" and 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."
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Tesla's German Automation Expert Klaus Grohmann Ousted After Clash With CEO Musk

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  • Duh, (Score:5, Insightful)

    by Spy Handler ( 822350 ) on Thursday April 27, 2017 @06:47PM (#54316165) Homepage Journal

    BMW and Benz are Tesla's competitors. Of course Tesla is gonna want to "service" them as little as possible. What did he expect?

    If Mr. Grohmann wanted to continue providing excellent service to BMW, maybe he should've just kept his company and not sold it to Tesla.

    • by guises ( 2423402 )
      That is not how it's supposed to work and, thankfully, not usually how it does work. People are people, and this kind of petty shit happens sometimes, but it's not the norm - most of the time people at least pretend to be professional and honor both the letter and the spirit of their contracts. This sort of thing, "Screw prior obligations, you're working for ME now!" this is a name-and-shame situation. You're not supposed to be defending it. That said, it's also a one-sided story.
      • ... honor both the letter and the spirit of their contracts.

        TFA says nothing about "contracts". This is about "relationships". Grohmann sold his company, pocketed Musk's check ... and then expected to continue to run the company and call the shots as if he was still the boss. It doesn't work that way.

        • by guises ( 2423402 )
          The article says that Tesla is in negotiations with Grohmann's clients over compensation related to this issue. You can call this what you want, but if they require compensation then these relationships were substantial ones.

          Your assumption about Grohmann's motivations is possible, but unsubstantiated.
    • BMW and Benz are Tesla's competitors. Of course Tesla is gonna want to "service" them as little as possible. What did he expect?

      Common decency? Having grown a business, I think it is reasonable to think that he had done the normal due diligence, and that he had reasons to expect that existing deals with his customers would be honoured - it's hard to guess without knowing more details. It is not, in fact unusual for companies to have their competitors as customers; I can how it could have been an advantage for Tesla to own the patents and setting the trends for these technologies for a long time, by licensing them to other car manufa

  • by alexhs ( 877055 ) on Thursday April 27, 2017 @07:02PM (#54316247) Homepage Journal

    Grohman founds a new company, most key employees leave for the new company (*), Tesla is left with a bunch of patents.
    <sarcasm> Smart move, Elon! </sarcasm>

    (*) Between leaving for a company with dependable clients and staying in a company continuing to lose money quarter after quarter, the decision shouldn't be too difficult.

    • Grohman founds a new company, most key employees leave for the new company

      That is unlikely to happen. The sale/transfer agreement usually includes significant non-compete and non-solicitation covenants. Whereas it's difficult to enforce employee non-competes in California, the CA courts have regularly and repeatedly enforced non-competes on key members who sold their stake in a company.

      • by alexhs ( 877055 )

        Grohmann Engineering was a Germany-based company. Of course, German law also allows for non-compete covenants, though I have no idea how they are enforced. In that specific case, one could argue that the new company wouldn't compete with Tesla as Tesla has shown no interest in servicing German customers.

        Also, I wouldn't seriously expect this to happen, that was more a "wouldn't it be funny if..." kind of thought :)

        • by tempmpi ( 233132 )

          German law allows non-compete agreements but puts some serious restrictions on them. They are limited to a maximum of two years, can be expensive for the former employer because the former employer is required to pay compensation to the former employer while the non-compete agreement is in place. These compensations can often be between 50-100% of the former salary and do not get the former employer anything other than the non-compete. And these non-compete clauses can be hard to add to existing contracts.

    • Re:Next steps... (Score:4, Informative)

      by Anonymous Coward on Thursday April 27, 2017 @07:19PM (#54316329)

      I worked on a major automation project at Tesla as an automation engineer. Tesla offered me a permanent job, but I wouldn't take it.

      Tesla management treats automation engineers as if they are replaceable line workers. They approach problems by trying to buy a quick solution instead of planning for the long term. They spend a lot of money trying to look good (nice lights, painted floor, etc) because they are often giving tours by investment bankers, but they don't have enough experience building cars to produce the product it at scale. I've been in many auto plants and Tesla was just absurd. Tesla's relationships and treatment of automation contractors is bad, which certainly contributes to Tesla's difficulty building cars. Tesla may struggle to build cars, but I have to admit, they have a really impressive stock price.

      TLDR; I would much rather work for Toyota than Tesla. Toyota knows how to build cars, and they know how to maintain good relationships with their workers.

  • by pushing-robot ( 1037830 ) on Thursday April 27, 2017 @09:57PM (#54317047)

    Why are they trying to automate Germans? They're efficient enough as-is.

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