Grohmann Quits Tesla After Feud With CEO Musk

Leaves after disagreement over handling of previous customers.

by on Apr.27, 2017

Tesla CEO Elon Musk lost another top executive, Klaus Grohmann, after the two disagreed about how to handle Grohmann's now former customers.

As Tesla CEO Elon Musk continues to play whack-a-mole trying to eliminate potential roadblocks to getting the EV maker’s mainstream model, the Model 3, into production on schedule, there have been a few glitches.

The most recent being departure of Klaus Grohmann, who left last month after a clash with Musk. Grohmann was leading the company’s efforts to improve the “machines that build the machines” at Tesla.

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The pair disagreed over Musk’s insistence on shedding long-time customers – and competitors to Tesla – from Grohmann’s company, which Tesla had acquired in November, according to Reuters. The carmaker wanted all of its new engineering subsidiary’s resources focused on bringing the Model 3 to market on time, with high quality and in large numbers: 500,000 units annually by 2018.

Tesla planned to keep Grohmann on, Reuters reported, and he planned to stay, but couldn’t abide by Musk’s plans to shed all previous customers, in particular Daimler AG and BMW.

(Tesla CEO Musk flies to Germany to help avert strike. Click Here for the story.)

Grohmann declined to comment to Reuters about his departure, citing confidentiality clauses, but did offer that he “definitely did not depart because I had lost interest in working.” A Tesla spokesman said Grohmann built an “incredible company,” Reuters reported, adding:

“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.”

Grohmann’s absence was immediately noticed by the subsidiary’s 700- employees, who were already unhappy with some of Tesla’s policies and, perhaps more importantly, its compensation. Their union, IG Metall, has suggested that a strike could be the way to get what the workers need.

Musk hustled off to Germany to talk face-to-face with the employees to avert a work stoppage, and while the financial issues appear to be settled, the hangover from Grohmann’s split from the new entity remains.

(Tesla idling California plant briefly to prep for Model 3 production. Click Here for the story.)

It also strengthens a perception about Musk, which is that he doesn’t tolerate contradictory opinions or voices that aren’t in harmony with his. The California-based EV maker has seen several top executives depart after Musk essentially determined they weren’t right for the team.

The maker’s Chief Financial Officer Jason Wheeler decided to leave in March, just 15 months after he joined Tesla from Google. Before Wheeler, Tesla lost Mark Lipscomb, vice president of human resources, and Satish Jeyachandran, director of hardware engineering.

In January, Tesla hired former Apple executive Chris Lattner as vice president of Autopilot software, but the hire was necessary because Sterling Anderson, who ran the Autopilot program before Lattner’s addition, quit in late December 2016.

Bloomberg said it interviewed several former executives, who spoke on the condition they not be identified, cited a range of reasons for their exits during the past year, including long hours, mission creep, and a tense culture that reflects the highly motivated and extremely driven Musk, who’s been known to sleep at the company’s sites in Palo Alto and Fremont, California.

(Tesla misses mark on deliveries. Click Here for details.)

In all, more than two dozen upper-level to top-level executives have bid Tesla adieu in the last 12 months. Overall, Tesla has about 17,800 employees, according to its Securities and Exchange Commission filings.

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