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Sabotage, Espionage and Whistleblowing

Posted on July 1, 2018 – Automobile Industry News

Doesn’t it just sound like the title of the latest bestsellling thriller?

Yet, this story isn’t some fanciful plot, but the garden-variety issues Tesla has had to contend with for the last few months. One thing is sure, 2018 has really not been their year so far.

Tesla’s troubles started at the end of last year when it became clear that they wouldn’t be able to deliver the pre-orders of the Tesla 3 in time. With half a million customers waiting for their cars, Musk had to seriously scale up production from its measly weakly 2,000 to the 5,000 cars a week that were needed to fulfill orders, but they seem to have been plagued by one setback after the other.

First, it had to shut down the production line temporarily in February and again in April to address bottleneck issues. While this is not uncommon in manufacturing, investors didn’t take kindly to it and the share price of Tesla reflected their lack of confidence in the company.

The recall of 23,000 Model S vehicles certainly didn’t help either, not to mention that one of its vehicles with the semi-autonomous Autopilot caused a death and that Tesla was kicked out of the investigation process by the National Transportation Safety Board (NTSB) for releasing information before it was confirmed by the NTSB - a violation of the party agreement. Its cars are also meeting some criticism by influential customer groups regarding the quality of manufacturing.

On a Human Resources level, the picture is not rosy either. When the production lines had to be closed in February and April, Tesla’s employees were given the choice between taking these days from their holiday allowance or as unpaid leave, without any notice. It is also reported that the company hasn’t been forthcoming about the true number of workplace accidents which have happened at its assembly plant and it has been suggested that recent mass firings were an attempt to thwart unionisation – although this has been vigorously denied by Elon Musk.

The latest on Tesla’s saga is a lawsuit of a former employee who tried to ‘sabotage’ Tesla according to internal emails.

Tesla is accusing its ‘rogue’ employee, Martin Tripp, of making false statements to the press about the company’s inner workings and of sabotaging the production line by writing software that successfully hacked Tesla’s manufacturing system. He is also accused of stealing confidential data on a regular basis and leaking it, as well as photos of the site, to the press.

Elon Musk’s company claims that the former employee acted this way out of revenge when he failed to receive a promotion he hoped for and had been disruptive and had tried to agitate its co-workers ever since.

Musk stated in an internal email that “there [were] many who [wanted] Tesla to die”, including other car makers and oil companies who weren’t thrilled at the progress of vehicles which, basically, would kill the golden goose, and urged his staff to be extra vigilant of any suspicious behaviour. In another email, he said that the production line at the Tesla factory had to be temporarily shut because of a small fire, suggesting that it wasn’t clear whether it may be arson. Well, you know what they say: it’s not because you’re paranoid that they’re not after you!

Tripp counter-attacked with its own law suit against Tesla for defamation, strongly denying their accusations and that he would have been acting out of revenge. He claims to have seen dangerous practices at the firm that he wanted exposed, such as Tesla knowingly shipping cars with damaged batteries . He also claims to have been the whistleblower giving information to Business Insider for an article - misleading according to Tesla - on the vast amount of raw-material waste involved in producing the Tesla 3. The article revealed an inefficient production cycle where, for every 2,500 battery packs and driving units that left the assembly plant, a thousands pieces of "nonconforming material" were created, half of which couldn’t be recycled and would become scrap.

As though the struggle to reach a production of 5,000 cars a week wasn’t enough, several key senior staff left Tesla over the same couple of months.

Chip architect Jim Keller, who played a crucial role at Tesla since he joined the company in 2015, left for Intel as a Sr Vice President in April 2018. Senior Engineer Sameer Qureshi, who was responsible for the Autopilot project across all of Tesla’s cars, joined Lyft in May 2018 taking his expertise with him.

The same month, Doug Field, Sr Vice President of Engineering, took a 6-week leave of absence to recharge its batteries - no pun intended. However, at the end of it, Tesla confirmed that he had left the company for good and that Musk would take on his responsibilities.

Matthew Schwall, Director of Field Performance Engineering and the main technical contact with US safety investigators, also left Tesla, for Waymo, where he will continue to work on the safety of autonomous vehicles.

The departure of so many high-level staff taking with them a vast amount of technical expertise and the discovery of a potential rogue employee are the last things that Tesla needed at this already challenging time, from a production as well as a PR point of view as people will no doubt start wondering whether there is something more sinister going on.

Despite all this, Tesla reached its self-imposed target of 5,000 Model 3 produced in a week early July, so it looks like the company has turned a corner. However, this number was achieved by building a tent outside the factory, pulling away workers from the other model production lines and working 7 days a week and 24 hours a day in shifts, so analysts are unsurprisingly asking how long this is sustainable or whether it will be no more than a short-lived burst to impress investors.

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