Unfortunately absent from this article was an assessment of Grohmann's contributions to Tesla and the ramifications of his departure. Otherwise the reader is left to assume for themselves who was in the right or wrong, and whether it was a good or bad decision for Grohmann, Tesla, or both.
absent from this article was an assessment of Grohmann's contributions to Tesla
The second and third paragraph of the article explain who Grohmann is in relation to Tesla:
counting on Grohmann Engineering's automation and engineering expertise
described Klaus Grohmann and the company he founded as a "world leader in highly automated manufacturing".
Later:
the workforce felt insecure about becoming so dependent on one client after the founder's departure.
The rift is explained throughout as being basically, should Grohmann Engineering focus on Tesla above it's prior automative relationships with Tesla competitors? Musk says yes, Grohmann says no.
And the last two paragraphs show what immediate effects Tesla is going to have to deal with (compensating existing Grohmann customers, and pressure from the German labor union)
> 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 (DAIGn.DE) and BMW (BMWG.DE), two sources familiar with the matter said.
I mean, how was this not brought up and made a settled point before Tesla acquired his company? Big fan of Musk but this is on his shoulders. According to reports, Telsa is already talking to other Grohmann customers, read their competitors, on how to compensate them for breaking the contracts.
Now they are facing the same engineers they just acquired wanting to go on strike.
I'd start to worry about how Tesla is going to fund Model 3 manufacturing, buying out competitors from contracts that they don't want to fill, and how to deal with a set of key employees who may want to unionize and certainly want higher pay, but Tesla just somehow always seems to find a way.
The stock is close to its all time highs, and short interest is at the bottom of its trailing year, so I guess I'm not the only one who has just thrown up their hands and just let Elon have his way.
At what point does shorting Telsa join "starting a land war in Asia" as a rule to live by:)
From Zero Hedge....
> The German labor union IG Metall has demanded that Tesla's management formalize multi-year job guarantees and increase salaries as a way to provide assurance amid management turmoil. The alternative is a strike which could lead to further "unexpected" delays for the Model 3, and even more hyperbolic statements from Musk on his twitter account to deflect attention from increasingly growing problems in Tesla's paradise.
All of these events seem predictable and even desirable. Part of the benefit of acquiring Grohmann Engineering is depriving competitors of their services, and the costs include buying out contracts and appeasing labor. Turnover at an acquired company isn't unusual, nor is friction in the transition.
If Tesla was smart and gave these aquihired employees adequate golden handcuffs and noncompete clauses then I agree. But if they didn't and key employees just leave and use their expertise to start another company that helps out the competitors again then Tesla will have played themselves.
It could go poorly. Those are good points. It was a decent but if they retain talent and deprive competitors. Takes a long time to start a company and Tesla is likely attractive place for engineers so they will prob retain employees and IP to make it palatable if not profitable
That actually sounds fair given the circumstances. Paid time to either stay out of the market and relax, or to transition to a fresh field unaffected by the non-compete.
This isn't software that a team of 6 can replace in 6 months. This is stuff like assembly lines, metallurgy treatments, the characteristics and quirks of specific machines, and requirements of suppliers. These can't just be replaced by a rogue team leaving.
It can easily be argued that those people are the real value behind this acquisition. Even if they could be replaced easily (not likely) it would still be a huge blow.
Agreed, the loss of institutional knowledge will cripple the team. However, what I am arguing is that they leavers won't be able to take the business elsewhere just with what is in their heads.
On the contrary. The rogue team leaving knows how to build and maintain the assembly lines, invented the metallurgy treatments, designed and built the machines, and created the supplier network themselves. Without the team, the automated manufacturing business is probably not worth nearly as much. The team can go elsewhere and repeat the feat.
No, no they didn't. They inherited the machine, or bought it from someone else. This isn't software engineering, where people bootstrap their compilers.
They signed exclusive contracts with suppliers.
They designed parts which took many iterations of surface finishes and annealing schedules and tolerances to get right. Each iteration requires months of turnaround time and $€£ in manufacturing costs.
Sure the team can go elsewhere. But it will take them almost as long to set it up the second time around, and almost as much money.
>>> Turnover at an acquired company isn't unusual, nor is friction in the transition.
>> Things are a bit different in Germany than in the USA when it comes to this.
> Would you care to elaborate?
Here's an attempt at an explanation:
Both turnover and friction occur during acquisition in Germany as well, obviously. And indeed friction is probably independent of nations (and their differing laws and cultures), so I'll focus on turnover.
So, turnover. The legal notice period in Germany is (ignoring exceptions) at least one month, and up to seven months by law. Often employer and employee contractually agree on even longer minimums, three months are quite usual. There's also an unspoken expectation that permanent employees are in for the long haul.
By contrast, IIRC many US States allow essentially zero notice period, and the famous two weeks' notice is essentially just courtesy.
Culturally, there's also stronger (albeit eroding) attachment between employers and employees. Especially in Mittelstand companies, such as Grohmann seems to be, the owner takes the stance of a benevolent patriarch, taking his responsibility for his employees seriously, and workers tend to reciprocate, and be very protective of their boss.
In fact, such a company structure and climate may well be a factor for when considering an employment offer.
Since identification with a company can thus be very strong, there would be considerable reluctance to leave, especially at such a critical time. You don't just leave your colleagues and your customers hanging.
In fact, perhaps it was this sentiment which caused Klaus Grohmann to throw in the towel, when he realised he was expected to work against the best interest of his clients (and, by extension, employees).
I assume that such a departure of a patriarch will be a strong signal to the rest of the company.
This is a common occurrence in business even if ugly. Similar circumstances happened to Tesla with Mobile Eye and Google, FB, Microsoft do this regularly. Potentially it did come up and he was mislead to make the sale, maybe their strategy changed or something in between.
I mean, Tesla was started as AC Propolsion and the CEO was fired, although fairly different circumstances. Either way, when you sell you sell control.
Kindly fact check; when Tesla started, they bought technology from AC Propulsion, but it was analogue and for various reasons they ended up having to reimplement everything themselves from scratch. AC Propulsion is still around AFAIK.
Yep, faulty memory. Still similar point though: Elon Musk bought in to Tesla and fired one of the founders. Obv, a Lotus Chassis and a car kit is much different than the product now but once you sell, you give up control.
I mean, how was this not brought up and made a settled point before Tesla acquired his company?
Probably something like, "The plan is X but of course the details aren't set in stone, we're a fast-moving company so we'll revisit our roadmap every so often." And then down the road Elon wants to do something that Grohmann strongly disagrees with, and the only plausible resolution is to fire Grohmann.
This doesn't seem too surprising to me. Tesla bought this company to make Teslas. Why should Tesla spend any effort at all helping BMW and Daimler make cars? Maybe there's some rationale there but it doesn't surprise me that it is low priority.
I don't care for the gossip, but I do appreciate the discussions it often spurs in the HN comments. There are already a few good comments here, and without this post we wouldn't have those comments.
I think that is a function of Tesla being a publicly-traded company. I think that's why a lot of discussions devolve towards what a companies relationship to its shareholders actually is. A lot of people are clearly invested in the performance of Tesla's stock, but Musk seems less concerned with the share price of Tesla than some people find to be acceptable.
I think this is probably why people are constantly shorting Tesla. Why would you expect a company run by a person who hardly seems to care about share price to maintain its share price over the long run?
>> "but Musk seems less concerned with the share price of Tesla than some people find to be acceptable."
That's precisely my point. The stock price is a moving average of people's guesses and hopes about Tesla's performance. Very few of these people actually have a window into what's in Elon's mind. To that extent, the stock price is more a metric of the 'ignorance of the commons', rather than their wisdom.
Elon absolutely should not be focusing on micro-optimizing Tesla stock.
I think the essence of this situation is, the stock market wants companies to pander to its every whim, BUT the stock market also has a dim awareness that this is trading off long-term success for short-term cash-in tactics. They know what they want but they also know it is bad for them, they just can't help themselves.
You could counter this by being fierce and stern and saying 'no, you must eat your spinach before dessert!' and probably have some success, if your business was based on hard-nosed determination. Amazon can do that, because they are tougher than Wall Street and will do what's best for Amazon, garnering respect.
Tesla's different. Musk's positioning is the foggy-eyed mystic, the guy with a vision WAY beyond what anybody else dares to have. Whether or not this is true this is how he has to behave. So, if Musk says things like 'ectually capital isn't even real, so the share price doesn't matter, it just slightly affects how fast we can roll out batteries and synergize with going to Mars', if it was a normal company the stock market would go WHACK and it would be goodbye Tesla.
Instead, since Musk is Musk and since the whole concept of Tesla/SpaceX is based on that impossibly grand vision, the stock market sort of gets wide eyes and goes quiet, and are careful not to cross Musk.
It's a type of dominance behavior. He doesn't have to yell at them: he acts like they're BENEATH him, and since the stock market likes to go for short-term thinking, technically they are. He can't go to Mars etc. while complying with stock market expectations because his business would implode. So he does it anyway and they interpret his arrogance as dominance, which it is.
Tesla, Amazon, and Uber each have their own type of dominance behaviors with the stock market. Tesla is the visionary seeing the burning bush and unaware of anything the stock market says, and they command awe. Amazon is the hard-bargainer who understands what the stock market wants, but won't trade away their own power, and they command respect. Uber just acts the way the stock market wants to act, and they command love (from the stock market, at least: maybe not from anything human!)
>the stock market wants companies to pander to its every whim
The market doesn't want anything, nor does it have any awareness.
>Tesla's different.
The Musks of the world are rare, but we've seen many captains of indsutry in history.
>and are careful not to cross Musk.
That's why it has massive short interest, right?
Tesla (the company) is great. TSLA (the financial instrument) is a hyped up momo stock, detached from anything underlying. That's it. There's no magic. Sorry.
[Got downvoted to hell, which almost never happens to me, but I believe it's worth saying] Well I might agree if the discussion was anything more than names of people and companies I'll never hear again. What I'm not hearing is anything about the big picture.
We as a species may die due to global warming, according to some models. Tesla is, by my measure, the tech company that comes closest to addressing this in any way. I couldn't care less about internal gossip and politics, I care about the greater vision. Politics are not business, they are an obstacle to business.
I'm asking why would you read every successes and hiccups of every company (google, facebook, YC, uber, yahoo, tesla)? In the scope of things, each of these is trivial, it'd be like somebody writing a news article on your slipping and falling on your face, in the scheme of things it's entirely irrelevant to your larger success.
One could argue the same thing about nearly any ongoing topic.
You mentioned elsewhere in this thread[0] that you're concerned about global warming and "Tesla is, by my measure, the tech company that comes closest to addressing this in any way." Tesla has not yet succeeded in having a significant impact on global warming, much less transformed the automobile industry or the large-scale use of batteries. Whether or not they succeed is something that many are interested in, just as it seems you are. Tesla has very ambitious goals in terms of Model 3 production and many people have expressed doubts whether they'll be able to meet those goals. Missing those goals could have a significant impact on the long-term success of the company. To meet these goals, Tesla acquired the automation company of which Grohmann was the CEO. If the departure of Grohmann results in management difficulties or departures of other Grohmann Automation staff, this could have a significant impact on whether Tesla meets these goals.
A wait-and-see attitude can make sense if you're just interested in the outcome and don't think you have any stake or ability to influence the company or the industry. If that's where you're coming from, there's nothing wrong with that.
At the same time, if you're concerned about the long-term survival of Tesla, own Tesla stock, are perhaps interested in purchasing a Tesla, or interested in getting into the electric automobile industry or battery industry, or any other of a number of reasons, or purely from an interest in better understanding how changes like this can affect a company, or an industry, this can indeed be something that is important.
Sure, there's some gossip-like discussion. We should all do our part to improve the level of discourse. Dismissing or trivializing others' interest, however, is not one of them. Share your point of view? Sure. It can be a worthwhile contribution to get someone's perspective, and in my experience on HN, one that's generally well-received when it's thoughtful and well-considered. Expressing your "wait and see" attitude with respect to Tesla I'm sure is something that people can appreciate on its own, while remembering that there are others that may not share it.
The same thing used to happen non-stop about bitcoin, every day new articles that it was going to takeover the world and articles saying it was doomed, for years. None of the speculation amounted to anything. It was just bored people who invested early or missed out getting excited or angry.
I sympathize with the guy. Big companies today will say to your face that they own your soul, not just your labor on the clock, and act affronted when you disagree.
This luminary was passionate about automation, and wanted to continue fulfilling the purposes of his company which specializes in automation. His intentions with regards to that were almost certainly abundantly clear at the time of purchase. Tesla just figures, they're the owners now so it's their way or the high way.
"I definitely did not depart because I had lost interest in working," had may as well be printed on every business lawyers' card, because it's probably the most common thing they hear in exit interviews. Your over-protective clawing is costing you your workers, idiots!
This sounds familiar, reminds me of when Amazon acquired Kiva, they too had rivals as customers. Amazon decided to slowly stop supporting existing customers, and focus only on its internal operations.
I think the lesson here, for something as crucial as automation, you're taking a risk when purchasing robots from vendors.
That was a shock to the material-handling industry. Vendors have gone out of business before, but usually someone acquires the assets and services the existing machinery. That didn't happen with Kiva. Existing Kiva customers were no longer able to buy more Kiva robots. It's not even clear they can get replacement parts. "Amazon Robotics ... encouraged prospective users of Kiva technology to let Amazon Robotics and Amazon Services provide fulfillment within Amazon warehouses using Amazon robots."
IMHO this is despicable business behavior of Tesla. As someone who worked at a very large European car supplier, I know that companies like Grohmann are build with the help of the big players (car manufacturers or bigger suppliers), who invest a lot of time and money to ensure that they get a reliable supplier for the future. Our purchase department had special people who helped several smaller companies in the Czech Republic to become suppliers able to meet the requirements of European car manufacturers. They would have never made it by themselves.
Tesla should not be surprised if Grohmann will see a tit for tat and run into difficulties cooperating with other German suppliers, which they most certainly rely on.
I'm curious, what do you believe is the minimum level of help a company must provide its suppliers in order to turn a competitor buying them out into despicable business behavior? Is simply being a long-standing customer enough? How long is a supplier that is provided help ethically required to continue supplying?
In my personal opinion purchasing a long standing supplier of many companies with the intention to remove it from the free marked is despicable already.
By analogy, would anyone who starts a business with the intention of selling it later (thus enabling the buyer to remove that business as supplier to his competitors) act in a despicable way?
I'm by no means a fan of pure capitalism, but in this case, what's the problem? What you want doesn't look like a free market. What you want is an external force (universal morality? government regulation?) prohibiting a company (Grohmann) from being bought by a company (Tesla) that apparently offered an enticing deal, and then trying to negotiate out of existing contracts (has anyone accused Tesla of not honoring existing contracts? THAT would be different). The stakeholders of Grohmann evidently wanted to sell, and that's the only thing that matters in a free market. Once sold, Tesla determines how Grohmann (re)negotiates with its customers, and how Grohmann resources are utilized.
The companies Grohmann supplied have their existing contracts; if those contracts are not honored, THAT will be despicable, and those companies will then have legal recompense. If the contracts are negotiated away, there's no problem. If contracts are honored but those companies don't like future contracts (or lack thereof), that's on the other automakers for not forming a consortium and buying Grohmann when they had the chance.
I view the labor issue as separate; labor's issues are only tangentially about whether Tesla is supplying parts to other automakers. Their concerns are primarily about the implications on salary, benefits, and particularly job stability. Labor is always free to do anything that's legal under labor law to improve or negotiate a better position, regardless of who owns Grohmann or to what companies it supplies parts.
I think the problem with it is that it's essentially exploiting a flaw in capitalism. The company would probably generate more total long term value if it continued to service multiple companies, but Tesla wants to capture as much of its production as possible. Humans aren't money optimizers, and almost everyone has a buyout price. Because Tesla has so much money, they can gain a competitive advantage by just buying out others. Tesla and the stakeholders of the company they buy win, while the overall health of the industry loses. Now all their other clients have to spend extra time and money to do what they were previously paying Grohmann Engineering to do, either by finding a new partner or doing it in house.
I'm more of the opinion that if the existing customers were concerned enough, they could have found a better solution. Forming a consortium doesn't seem too far off. Of course now i'm speculating with somebody else money, but I also believe somebody run the numbers. Strategy is basically about running numbers continuously about every possible scenario.
Many people still consider it shady, despite the fact that it's been common practice for so many years. No one is ever surprised anymore, but perhaps this is one of those trends that shouldn't leave the software industry.
That is just business practice in the US. This is exactly why American businesses are so dynamic, because they view business as competition rather than cooperation. This is how the free market and the invisible hand actually works.
And they would never cash in huge profits if it were not for 3x cheaper Czech labour, land and huge incentives from local govs. Why do you think those suppliers owe anything to anyone? Big players that helped those small suppliers are the same as Tesla in this case.
Exactly. They certaintly didn't fund the company out of interest of the Czech employees. Somebody ran the numbers and thought it could be a profitable investment.
Apple is doing stuff that's not too different: using their large cash to lend money (with lower interest than a bank) to Chinese manufacturer, so they can build the factory and hire the labor to manufacture the Apple products. And Apple cashes in with interests, with cheaper products and exclusivity deals for some time. It's a win-win-win for them.
He sold his company. Tesla could have killed it just to deny its competitors assembly line equipment. We are talking American business ethics here, not German business ethics. If it was that critical to them, BMW and Diamler could have instead jointly bought Grohmann Engineering, like they did with Here Intetnational BV stock along with VW.
Tesla Grohmann – Mail from Elon I am very grateful that last Thursday I had the opportunity to talk to you and I wanted to give you some additional thoughts.
Tesla is unlike most other companies. Unlike other companies, the existence of Tesla is not only to make money. If it were only about this one goal, then I can tell you that the founding of a completely new car manufacturer would definitely not have been the smartest way. Our foundation and the foundation of everything we do is to accelerate the advent of sustainable energy. The welfare of our planet is in great danger, and in order to solve this problem, we need a sustainable solar energy production, we need a sustainable way to store the energy in stationary batteries and we need a sustainable way to consume this energy with electric vehicles. It is critical of the future of humanity to solve this problem – we all want a better world for future generations.
Tesla has made a number of important steps towards achieving this mission in the last 14 years of our existence, but none is more important and can make a bigger difference than Model 3. For the first time ever, there will be an electric vehicle that people can afford and which people love. When Tesla was founded, no one thought that an electric vehicle could ever be more than a golf cart. Today, Model S is the best-selling vehicle in its class. Model X is fast to pick up and recently won a golden steering wheel. And Model 3 is on the brink of production start – just one year after the most successful product launch ever. After the Model 3, many other vehicle products will come, for which Tesla Grohmann will play a key role. To name just a few, which have already been publicly announced (there will be many more): We are developing Model Y (an affordable mid-range SUV), a heavy-duty semitrailer, a pickup and the next generation of the roadster sports car.
And these are only the cars. Tesla is about to launch a new solar roof into the market that will completely change the importance of the use of solar energy. Tesla will soon produce more batteries than the entire world has produced in 2013. These batteries will enable everything to be operated with sustainable energy, including the cars we manufacture. I was never more optimistic about the future of Tesla. Although it is not what drives us, Tesla has the real potential to be one of the most valuable companies in the world.
We bought Tesla Grohmann because we believe that Tesla Grohmann will play an important role in creating this future. It is not enough to produce cool products. To be successful, we need factories that are as good as the products themselves.
This brings us to the current topics at Tesla Grohmann:
First, the question of trust and the longing of every employee for job security. I understand that you are concerned about our decision to focus on Tesla projects instead of serving external customers. We have made this decision, because just so much work has to be done on critical Tesla projects. We really have so much to do that we will be able to hire even more extraordinary talents, and we plan not only an expansion of the team, but also our production facility in Prüm. For all these reasons, I would like to assure everyone at Tesla Grohmann that we will not be able to reduce our workforce in the foreseeable future, Even after these five years, we are expecting further growth at Tesla Grohmann and do not expect any personnel reductions. However, we wanted to give you absolute security for a definite period of time. This is a promise you can rely on and I will ensure that it is also formally implemented.
65 comments
[ 3.4 ms ] story [ 126 ms ] threadThe second and third paragraph of the article explain who Grohmann is in relation to Tesla:
counting on Grohmann Engineering's automation and engineering expertise
described Klaus Grohmann and the company he founded as a "world leader in highly automated manufacturing".
Later:
the workforce felt insecure about becoming so dependent on one client after the founder's departure.
The rift is explained throughout as being basically, should Grohmann Engineering focus on Tesla above it's prior automative relationships with Tesla competitors? Musk says yes, Grohmann says no.
And the last two paragraphs show what immediate effects Tesla is going to have to deal with (compensating existing Grohmann customers, and pressure from the German labor union)
I mean, how was this not brought up and made a settled point before Tesla acquired his company? Big fan of Musk but this is on his shoulders. According to reports, Telsa is already talking to other Grohmann customers, read their competitors, on how to compensate them for breaking the contracts.
Now they are facing the same engineers they just acquired wanting to go on strike.
I'd start to worry about how Tesla is going to fund Model 3 manufacturing, buying out competitors from contracts that they don't want to fill, and how to deal with a set of key employees who may want to unionize and certainly want higher pay, but Tesla just somehow always seems to find a way.
The stock is close to its all time highs, and short interest is at the bottom of its trailing year, so I guess I'm not the only one who has just thrown up their hands and just let Elon have his way.
At what point does shorting Telsa join "starting a land war in Asia" as a rule to live by:)
From Zero Hedge....
> The German labor union IG Metall has demanded that Tesla's management formalize multi-year job guarantees and increase salaries as a way to provide assurance amid management turmoil. The alternative is a strike which could lead to further "unexpected" delays for the Model 3, and even more hyperbolic statements from Musk on his twitter account to deflect attention from increasingly growing problems in Tesla's paradise.
BTW noncompetes are illegal in California where Tesla is based.
http://www.lexology.com/library/detail.aspx?g=2bae173f-7fe4-...
They signed exclusive contracts with suppliers.
They designed parts which took many iterations of surface finishes and annealing schedules and tolerances to get right. Each iteration requires months of turnaround time and $€£ in manufacturing costs.
Sure the team can go elsewhere. But it will take them almost as long to set it up the second time around, and almost as much money.
Things are a bit different in Germany than in the USA when it comes to this.
>> Things are a bit different in Germany than in the USA when it comes to this.
> Would you care to elaborate?
Here's an attempt at an explanation:
Both turnover and friction occur during acquisition in Germany as well, obviously. And indeed friction is probably independent of nations (and their differing laws and cultures), so I'll focus on turnover.
So, turnover. The legal notice period in Germany is (ignoring exceptions) at least one month, and up to seven months by law. Often employer and employee contractually agree on even longer minimums, three months are quite usual. There's also an unspoken expectation that permanent employees are in for the long haul. By contrast, IIRC many US States allow essentially zero notice period, and the famous two weeks' notice is essentially just courtesy.
Culturally, there's also stronger (albeit eroding) attachment between employers and employees. Especially in Mittelstand companies, such as Grohmann seems to be, the owner takes the stance of a benevolent patriarch, taking his responsibility for his employees seriously, and workers tend to reciprocate, and be very protective of their boss. In fact, such a company structure and climate may well be a factor for when considering an employment offer.
Since identification with a company can thus be very strong, there would be considerable reluctance to leave, especially at such a critical time. You don't just leave your colleagues and your customers hanging. In fact, perhaps it was this sentiment which caused Klaus Grohmann to throw in the towel, when he realised he was expected to work against the best interest of his clients (and, by extension, employees).
I assume that such a departure of a patriarch will be a strong signal to the rest of the company.
I mean, Tesla was started as AC Propolsion and the CEO was fired, although fairly different circumstances. Either way, when you sell you sell control.
AC prop still exists. You were correct
Probably something like, "The plan is X but of course the details aren't set in stone, we're a fast-moving company so we'll revisit our roadmap every so often." And then down the road Elon wants to do something that Grohmann strongly disagrees with, and the only plausible resolution is to fire Grohmann.
This doesn't seem too surprising to me. Tesla bought this company to make Teslas. Why should Tesla spend any effort at all helping BMW and Daimler make cars? Maybe there's some rationale there but it doesn't surprise me that it is low priority.
I wish there was no segment of HN that cared about this.
I think this is probably why people are constantly shorting Tesla. Why would you expect a company run by a person who hardly seems to care about share price to maintain its share price over the long run?
That's precisely my point. The stock price is a moving average of people's guesses and hopes about Tesla's performance. Very few of these people actually have a window into what's in Elon's mind. To that extent, the stock price is more a metric of the 'ignorance of the commons', rather than their wisdom.
Elon absolutely should not be focusing on micro-optimizing Tesla stock.
I think the essence of this situation is, the stock market wants companies to pander to its every whim, BUT the stock market also has a dim awareness that this is trading off long-term success for short-term cash-in tactics. They know what they want but they also know it is bad for them, they just can't help themselves.
You could counter this by being fierce and stern and saying 'no, you must eat your spinach before dessert!' and probably have some success, if your business was based on hard-nosed determination. Amazon can do that, because they are tougher than Wall Street and will do what's best for Amazon, garnering respect.
Tesla's different. Musk's positioning is the foggy-eyed mystic, the guy with a vision WAY beyond what anybody else dares to have. Whether or not this is true this is how he has to behave. So, if Musk says things like 'ectually capital isn't even real, so the share price doesn't matter, it just slightly affects how fast we can roll out batteries and synergize with going to Mars', if it was a normal company the stock market would go WHACK and it would be goodbye Tesla.
Instead, since Musk is Musk and since the whole concept of Tesla/SpaceX is based on that impossibly grand vision, the stock market sort of gets wide eyes and goes quiet, and are careful not to cross Musk.
It's a type of dominance behavior. He doesn't have to yell at them: he acts like they're BENEATH him, and since the stock market likes to go for short-term thinking, technically they are. He can't go to Mars etc. while complying with stock market expectations because his business would implode. So he does it anyway and they interpret his arrogance as dominance, which it is.
Tesla, Amazon, and Uber each have their own type of dominance behaviors with the stock market. Tesla is the visionary seeing the burning bush and unaware of anything the stock market says, and they command awe. Amazon is the hard-bargainer who understands what the stock market wants, but won't trade away their own power, and they command respect. Uber just acts the way the stock market wants to act, and they command love (from the stock market, at least: maybe not from anything human!)
The market doesn't want anything, nor does it have any awareness.
>Tesla's different.
The Musks of the world are rare, but we've seen many captains of indsutry in history.
>and are careful not to cross Musk.
That's why it has massive short interest, right?
Tesla (the company) is great. TSLA (the financial instrument) is a hyped up momo stock, detached from anything underlying. That's it. There's no magic. Sorry.
We as a species may die due to global warming, according to some models. Tesla is, by my measure, the tech company that comes closest to addressing this in any way. I couldn't care less about internal gossip and politics, I care about the greater vision. Politics are not business, they are an obstacle to business.
Why speculate? Wait and see.
You mentioned elsewhere in this thread[0] that you're concerned about global warming and "Tesla is, by my measure, the tech company that comes closest to addressing this in any way." Tesla has not yet succeeded in having a significant impact on global warming, much less transformed the automobile industry or the large-scale use of batteries. Whether or not they succeed is something that many are interested in, just as it seems you are. Tesla has very ambitious goals in terms of Model 3 production and many people have expressed doubts whether they'll be able to meet those goals. Missing those goals could have a significant impact on the long-term success of the company. To meet these goals, Tesla acquired the automation company of which Grohmann was the CEO. If the departure of Grohmann results in management difficulties or departures of other Grohmann Automation staff, this could have a significant impact on whether Tesla meets these goals.
A wait-and-see attitude can make sense if you're just interested in the outcome and don't think you have any stake or ability to influence the company or the industry. If that's where you're coming from, there's nothing wrong with that.
At the same time, if you're concerned about the long-term survival of Tesla, own Tesla stock, are perhaps interested in purchasing a Tesla, or interested in getting into the electric automobile industry or battery industry, or any other of a number of reasons, or purely from an interest in better understanding how changes like this can affect a company, or an industry, this can indeed be something that is important.
Sure, there's some gossip-like discussion. We should all do our part to improve the level of discourse. Dismissing or trivializing others' interest, however, is not one of them. Share your point of view? Sure. It can be a worthwhile contribution to get someone's perspective, and in my experience on HN, one that's generally well-received when it's thoughtful and well-considered. Expressing your "wait and see" attitude with respect to Tesla I'm sure is something that people can appreciate on its own, while remembering that there are others that may not share it.
[0]: https://news.ycombinator.com/item?id=14215651
This luminary was passionate about automation, and wanted to continue fulfilling the purposes of his company which specializes in automation. His intentions with regards to that were almost certainly abundantly clear at the time of purchase. Tesla just figures, they're the owners now so it's their way or the high way.
"I definitely did not depart because I had lost interest in working," had may as well be printed on every business lawyers' card, because it's probably the most common thing they hear in exit interviews. Your over-protective clawing is costing you your workers, idiots!
I think the lesson here, for something as crucial as automation, you're taking a risk when purchasing robots from vendors.
[1] https://www.therobotreport.com/news/filling-the-void-left-by...
Tesla should not be surprised if Grohmann will see a tit for tat and run into difficulties cooperating with other German suppliers, which they most certainly rely on.
The companies Grohmann supplied have their existing contracts; if those contracts are not honored, THAT will be despicable, and those companies will then have legal recompense. If the contracts are negotiated away, there's no problem. If contracts are honored but those companies don't like future contracts (or lack thereof), that's on the other automakers for not forming a consortium and buying Grohmann when they had the chance.
I view the labor issue as separate; labor's issues are only tangentially about whether Tesla is supplying parts to other automakers. Their concerns are primarily about the implications on salary, benefits, and particularly job stability. Labor is always free to do anything that's legal under labor law to improve or negotiate a better position, regardless of who owns Grohmann or to what companies it supplies parts.
For example, if Oracle or Microsoft did it, literally no-one would be surprised.
Perhaps Tesla's use of hmmm... "IT industry tactics" in non-IT industries is the problem?
Apple is doing stuff that's not too different: using their large cash to lend money (with lower interest than a bank) to Chinese manufacturer, so they can build the factory and hire the labor to manufacture the Apple products. And Apple cashes in with interests, with cheaper products and exclusivity deals for some time. It's a win-win-win for them.
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Tesla Grohmann – Mail from Elon I am very grateful that last Thursday I had the opportunity to talk to you and I wanted to give you some additional thoughts.
Tesla is unlike most other companies. Unlike other companies, the existence of Tesla is not only to make money. If it were only about this one goal, then I can tell you that the founding of a completely new car manufacturer would definitely not have been the smartest way. Our foundation and the foundation of everything we do is to accelerate the advent of sustainable energy. The welfare of our planet is in great danger, and in order to solve this problem, we need a sustainable solar energy production, we need a sustainable way to store the energy in stationary batteries and we need a sustainable way to consume this energy with electric vehicles. It is critical of the future of humanity to solve this problem – we all want a better world for future generations.
Tesla has made a number of important steps towards achieving this mission in the last 14 years of our existence, but none is more important and can make a bigger difference than Model 3. For the first time ever, there will be an electric vehicle that people can afford and which people love. When Tesla was founded, no one thought that an electric vehicle could ever be more than a golf cart. Today, Model S is the best-selling vehicle in its class. Model X is fast to pick up and recently won a golden steering wheel. And Model 3 is on the brink of production start – just one year after the most successful product launch ever. After the Model 3, many other vehicle products will come, for which Tesla Grohmann will play a key role. To name just a few, which have already been publicly announced (there will be many more): We are developing Model Y (an affordable mid-range SUV), a heavy-duty semitrailer, a pickup and the next generation of the roadster sports car.
And these are only the cars. Tesla is about to launch a new solar roof into the market that will completely change the importance of the use of solar energy. Tesla will soon produce more batteries than the entire world has produced in 2013. These batteries will enable everything to be operated with sustainable energy, including the cars we manufacture. I was never more optimistic about the future of Tesla. Although it is not what drives us, Tesla has the real potential to be one of the most valuable companies in the world.
We bought Tesla Grohmann because we believe that Tesla Grohmann will play an important role in creating this future. It is not enough to produce cool products. To be successful, we need factories that are as good as the products themselves.
This brings us to the current topics at Tesla Grohmann:
First, the question of trust and the longing of every employee for job security. I understand that you are concerned about our decision to focus on Tesla projects instead of serving external customers. We have made this decision, because just so much work has to be done on critical Tesla projects. We really have so much to do that we will be able to hire even more extraordinary talents, and we plan not only an expansion of the team, but also our production facility in Prüm. For all these reasons, I would like to assure everyone at Tesla Grohmann that we will not be able to reduce our workforce in the foreseeable future, Even after these five years, we are expecting further growth at Tesla Grohmann and do not expect any personnel reductions. However, we wanted to give you absolute security for a definite period of time. This is a promise you can rely on and I will ensure that it is also formally implemented.
Second, on remuneration. Last ...
I find the idea pretty laughable.