More Tesla Turmoil? Executive Turnover Continues

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Tesla Model S Sedan

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Executive turnover continues at Silicon Valley electric-car startup Tesla Motors, with three executives leaving in nine months and two more hired.

The turnover comes both in Vehicle Engineering--the group that must executive and deliver the 2012 Tesla Model S electric luxury sports sedan--and in Marketing, which includes the company's energetic public relations department.

Engineering in the spotlight

On the engineering side, Tesla's new chief vehicle engineer is Peter Rawlinson. He had previously headed vehicle engineering at Corus Automotive, an advanced engineering consulting firm.

Rawlinson has worked on both electric car projects (the Think City, which set a world record for subcompact crash-safety performance) and luxury sports sedans, including the Bentley Continental, BMW 5-Series, and Jaguar X-Type. As such, he should understand the demanding requirements of the likely Model S buyers.

Predecessor lasted a year

He succeeds Michael Donoughe, Tesla's most recent executive to leave, who lasted barely more than a year. Tesla hired Donoughe in July 2008; his resignation became public last week. He will become a senior partner at St. Clair Consortium, of Grosse Pointe, Michigan, which focuses on product development.

Donoughe came from Chrysler, where he led a crash project to replace the widely-panned Chrysler Sebring and Dodge Avenger midsize sedans. That project was killed by owner Cerberus as the economy worsened, and he left Chrysler in March of last year.

Both Donoughe and Tesla CEO Elon Musk called the timing "logical," after Donoughe worked to improve the production process and improve the quality of the $109,000 Tesla Roadster two-seat electric sports car. "We wish him all the best," said Musk.

2011 schedule: a stretch

Most analysts agree that getting the 2012 Model S on the road by the end of 2011, as promised by CEO Musk, will be a considerable stretch. To make it a reality, the company is interviewing candidates at all levels for more than 150 current job openings.

The company is under even greater scrutiny now that it has received $465 million in low-interest loans from the U.S. Department of Energy for a plant to produce battery packs and other components, as well as the California factory that is to build the Model S starting in 2011. The loans were announced in June, though Musk had claimed as early as February that they were confirmed.

One billion plus?

But it usually costs billions of dollars to design, prototype, test, and certify a brand-new car from scratch, as Tesla plans. Analyst Aaron Bragman, from IHS Global Insight, notes, "It can cost an established automaker well over a billion to develop a new platform, if they already HAVE a plant, infrastructure, test facilities, skilled engineers, etc."

Nonetheless, Musk swears the company is going to do just that. In 30 months, no less. The platform is Tesla's own design, he says, and the company will build the car itself, unlike the Roadster, which is manufactured by Lotus in the U.K. The first Model S, he says, will roll off the line two years hence, with annual production of 20,000 units a year or more.

But now that Mercedes-Benz has invested in Tesla, buying 9 percent for $50 million, that position may be rethought. Indeed, there was widespread speculation that the Model S prototype was built around the structure of a Mercedes-Benz CLS four-door coupe.

From Town Car to Tesla

Rawlinson will be joined in engineering by Henry Brice, who becomes program director for the 2011 Model S. Brice had been assistant chief engineer for the North American version of the 2011 Ford Fiesta program.

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Comments (4)
  1. How can you manage to turn such a positive story (a start-up attracting top talent) into a negative spin?
    I smell the stale perfume of jealousy...

  2. @Nick P: I'm curious at where exactly you perceive "negative spin".
    In my own experience in various startups, it's unusual for multiple top executives to depart within a year or less. And Tesla's strategic and managerial fits and starts have been pretty well documented by many, many others.
    How would you have "spun" the story?

  3. Interestingly, I had a startup with 15 people from 1999 to 2003 when it folded. During that time I had a 50% turnover rate. So did most of my friends who had startups. High-level technical people jump ship all the time, specially programmers & engineers.
    It's also usual to draft work contracts where both parties have 4-8 months to kick the tire and see how they work together.
    You may feel that people leaving a company is a bad sign, but I see this as a sign that they are trying to find good experienced people who can work under pressure and fit with Elon Musk's working style. I believe that he's a bit like Steve Jobs -- hard on employees and journalists but the best man for the job.
    Musk is doing the right thing and despite many negative articles like this one, Tesla is reaching all of its goals. This ain't no picnic.
    Still love your blog ;)

  4. @Nick P: Many thanks for the good words.
    Re/startups, sure, programmers and engineers may jump ship, and that's a normal part of the process. But in my experience, high *executive* turnover is far less common.
    For a car company, the head of vehicle engineering and the head of marketing are critical positions. For TWO heads of marketing to have come and gone inside a year is odd.
    Even more, given that Donoughe was highly regarded in the industry, his departure is very odd. Despite references to him improving the process of building the Roadster, it was pretty clear he was brought in to get the Model S off the ground. The fact that he has bailed after a year--let alone the astonishing claim that the car will be ready in two years and a few months, from a factory that hasn't even been chosen yet--makes me suspicious.
    In any event, thanks for following the site & for your comments. Weigh in any time!

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