Electric carmaker Tesla is set to lose two top manufacturing executives just before the company takes on its biggest production challenge yet with the release of the mass-market Model 3.
Greg Reichow, Tesla’s vice president of production and one of its highest-paid executives, and Josh Ensign, vice president of manufacturing, will both leave their posts. Their departures have been confirmed by a company spokesperson, who clarified that Reichow will remain until a replacement is found, according to Bloomberg.
Talk of inflation has been swirling for some time amid all the stimulus that's been pouring into the market and the soaring debt levels in the U.S. The Federal Reserve has said that any inflation that does occur will be temporary, but one hedge fund macro trader says there are plenty of reasons not to Read More
Tesla denies link with Model X struggles
The Bloomberg report cites an anonymous source familiar with the matter, who said that the departures are due to delays, glitches and a recall suffered by the Tesla Model X. However the spokesperson denied any link.
“This is not about the Model X,” they said. “After being at Tesla for over five years and leading its production team for the past three years, Greg Reichow has announced his intention to take a leave of absence from Tesla so that he can have a well-earned break.”
“Greg and the team deserve a lot of credit for building an all-new manufacturing organization from the ground up and for making Model S and Model X a reality,” said Tesla Chief Executive Elon Musk in an e-mail to Bloomberg. “We’re confident that with the strength of the team, high-quality manufacturing at Tesla will continue.” In the same e-mail provided by the company, Reichow added: “My belief in Tesla’s ability to successfully deliver great cars and inspire the world to drive electric remains as strong as ever.”
Musk takes responsibility for problems
The launch of the Model X has been hit by a series of setbacks due to what Musk described as engineering “hubris.” The company packed in falcon-wing doors and mono-post seats to the first version of the SUV.
“In retrospect,” Musk said in September, “we would not have had so many features and functionality.”
The electric carmaker has been working hard to find solutions, and Model X deliveries have been rising. Consumer reviews have been positive and Tesla is set to report Q1 earnings on Wednesday.
Among the other executives to have left the company this year are Michael Zanoni, the vice president of finance and worldwide controller; James Chen, vice president of regulatory affairs and deputy general counsel; and Ricardo Reyes, vice president of global communications.
Model 3 will be company’s biggest challenge yet
Tesla claims that only one of 40 executives appointed in the lats 12 months has left. Over 50% of those that report directly to Musk have been in their jobs for over 5 years.
Reichow worked at U.S. solar panel manufacturer SunPower for over 7 years prior to joining Tesla in April 2011. Ensign worked at Honeywell for over 10 years before joining the electric carmaker in June 2014.
The pair are leaving the company just before Tesla embarks on the huge challenge of manufacturing the Model 3. The prototype was unveiled on March 31 and within weeks 400,000 reservations had been made for the $35,000 mass-market sedan.
The company says deliveries will begin in late 2017, but in order for that to happen the company needs to seriously boost production. Model X production needs to increase, as does that of the battery packs used in the cars, before production of the Model 3 can begin in earnest. Whoever takes up the job of production executive will face some serious challenges.