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Friday, August 31, 2018

Tesla's HR chief takes leave of absence amid Elon Musk's tumult

SAN FRANCISCO -- Tesla Inc.’s head of human resources and facilities has been on a leave of absence as the electric-car maker has dealt with a period of intense tumult spurred by Chief Executive Officer Elon Musk.

Gabrielle Toledano, who joined Tesla as chief people officer in May 2017 from Electronic Arts Inc., confirmed she’s on leave when reached by phone Wednesday and declined to comment further. A Tesla spokesman said the leave was prompted by Toledano’s request and her duties are being handled by other members of the HR team.

Toledano, 51, is one of Tesla’s highest-ranking women. She reports directly to Musk and was among the handful of executives who stood on stage with him at the company’s annual shareholder meeting in June. A week later, Musk announced that the carmaker would dismiss more than 3,000 employees, or about 9 percent of its workforce, as part of a push for the profits that have largely eluded the company to date.

Musk stirred up weeks of controversy this month by tweeting he was considering taking Tesla private and had secured funding to do so. He abandoned the effort just 17 days later and now faces shareholder lawsuits and an investigation by the Securities and Exchange Commission.

Tesla shares fell 2.2 percent Wednesday to $305.01, the lowest closing price since Aug. 1.

Management turnover

Several senior executives have taken extended leaves of absences from Tesla in recent years. Doug Field, who had been senior vice president for engineering, went on leave in mid-May and didn’t return. His last official day with the company was June 27, and his departure was part of a spate of top management turnover earlier this year.

In 2015, Jerome Guillen, then Tesla’s vice president of worldwide service and deliveries, took leave but ultimately returned. He’s now leading Tesla’s Semi truck program and has played a key role in ramping up production of the Model 3 sedan.

Tesla director Steve Jurvetson, who’s also on the board of Musk’s Space Exploration Technologies Corp., has been on leave from both roles since his November resignation from DFJ, the venture capital firm he co-founded.

During Toledano’s tenure, Tesla has struggled to ramp up production of its mission-critical Model 3 sedan, and the UAW campaigned to unionize the company’s sole auto assembly plant in Fremont, Calif. She played a role in the hiring of Laurie Shelby, Tesla’s first vice president of environment, health and safety, earlier this year.

Tesla has grown rapidly in recent years. At the end of 2010, the year of its IPO, the Palo Alto, Calif.-based company had roughly 900 employees. Tesla acquired solar-panel installer SolarCity Corp. in 2016 and ended last year with 37,543 full time employees, according to its most recent annual report.

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Thursday, August 30, 2018

Study finds most Ford sedan customers say they will leave brand rather than buy crossovers, SUVs or trucks

Many Ford Fusion owners switch brands when they trade in their cars, KBB says.

Ford Motor Co. could have trouble keeping some U.S. sedan customers after discontinuing the Fiesta, Focus, Fusion and Taurus, a Cox Automotive study indicates.

Many Ford owners surveyed said they'll likely buy their next vehicle from one of Ford's rivals. Among Ford sedan owners, half said they would switch to a new or used car from another automaker for their next vehicle. Only 10 percent said they would get a new crossover or SUV from Ford; 5 percent said they'll get a Ford Mustang and 3 percent said they will drive a new Ford pickup.

While the survey's sample size is small — of the 2,697 responders, only 104 owned Ford vehicles — it highlights the problems Ford faces as it repositions its lineup. And it suggests that, although Ford has said it will replace its sedans with new vehicles at similar prices, the public might not yet understand that strategy.

"Ford's got some work to do in terms of clearing up the message to owners of these vehicles if they want any shot of keeping them," said Michelle Krebs, executive analyst with Autotrader, which is part of Cox. "They need to do some educating."

Most of the study's responders said they were surprised by Ford's decision to discontinue U.S. sedan sales, and most said they opposed it.

That stands in stark contrast to consumers' buying habits, as car sales continue to fall. Still, Ford's loss could be another automaker's gain.

For example, 53 percent of owners who trade in a Ford Fusion already go to a different brand, according to Kelley Blue Book data. They're most likely to defect to a Honda Accord, Civic or CR-V or a Toyota Camry or RAV4.

General Motors — which struggled to keep Pontiac and Saturn customers after killing those brands as part of its bankruptcy restructuring — thinks it can cash in on Ford's decision. "We see a terrific opportunity to forge new and stronger customer relationships with such a broad portfolio," Kurt McNeil, GM's U.S. vice president of sales operations, said this year in a news release.

McNeil said GM views sedans as crucial to its lineup because "they typically offer very good safety, comfort, fuel economy and a lower total cost of ownership than other vehicle choices."

Jim Farley, Ford's president of global markets, this year noted that exiting the car business carries some risk for the company and its dealers, especially among entry-level buyers. But he said Ford would offer vehicles with a different body style at entry prices.

"We think we can tempt some of those customers with an image upgrade," Farley told Automotive Newsin April. "Where Ford does best is where we play to our strength of emotional products."

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