Published: Fri, April 28, 2017
Business | By Max Garcia

Tesla's Klaus Grohmann ousted after clash with CEO Musk

Tesla's Klaus Grohmann ousted after clash with CEO Musk

Grohmann has helped Tesla rivals Daimler and BMW build production facilities for electric vehicle batteries. Inside sources familiar with the matter report that founder Klaus Grohmann's decision to not part ways with the company's legacy clients including Daimler and BMW created a rift between the executive and Chief Elon Musk.

Founder and CEO of Grohmann Engineering Klaus Grohmann was sacked last month by Tesla (TSLA) CEO Elon Musk over a dispute regarding the future strategy at Grohmann, which Tesla acquired in November 2016, Reuters reports. Shortly following the acquisition, Tesla announced that it had no plans to renew contracts with any of Grohmann's existing clients, some of whom had long working relationships with the German-based company.

Tesla planned to keep Grohmann on, and Grohmann meant to stay.

Grohmann Engineering, a maker of automated manufacturing systems which Tesla agreed to buy in November, is key to the Silicon Valley carmaker's bid to succeed in the mass market by massively ramping up its output. As pressure grew to increase production volumes at Tesla, Musk chose to buy Grohmann Engineering and make Pruem a base for Tesla Advanced Automation.

The head of Grohmann's works council, Uwe Herzig, said the founder's departure had been sudden and he had not had a chance to speak with Tesla Grohmann's new management, despite efforts to reach out. "Our factories are so important that we believe they will ultimately deserve an order of magnitude more attention in engineering than what they produce".

Tesla CEO Elon Musk has been pretty vague about his tunnel building project, The Boring Co., but a SpaceX employee Thursday shared a picture of the company's first tunnel boring machine on Instagram, Business Insider reported.

Negotiations reportedly started with some of the clients about how to compensate them for lack of resources devoted to their projects. The German labour union IG Metall has demanded that Tesla's management formalise multi-year job guarantees and increase salaries as a way to provide assurance amid management turmoil.

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