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THE TECH LINEUP: Tesla and the Terrible, Horrible, No Good, Very Bad Week

July 8, 2016
A look back at a week Tesla might like to forget (Autopilot crash reports, disappointing delivery numbers, another top departure), plus news about a robotic glove, 3D printing developments and more in this first regular Friday feature.

Welcome to The Tech Lineup, your one end-of-the-week stop for manufacturing technology news and analysis. Our goal here is to provide a broad look, with stories about companies and trends, exciting new products and possibilities, and some of our favorite links from the last week. With any luck, it’ll be here most Fridays. Let us know what you think in the comments section below. Now, on to ...

1. Tesla and the Terrible, Horrible, No Good, Very Bad Week

The flood started last Thursday night for Tesla Motors, not long after the National Highway Traffic Safety Administration revealed that a Model S crashed into a tractor trailer on the highway while operating on Autopilot in early May, its driver killed in the collision. On Tuesday, Fortune reported that CEO Elon Musk and Tesla knew fallout was coming when they recently sold off $2 billion worth of stock. That same day, the company reported its delivery numbers had fallen more than 15% short of the quarterly goal. On Wednesday, news leaked that another top executive was leaving, this time for a research gig at Facebook. And on Thursday, news of another Autopilot crash, thankfully free from more fatalities.

Musk has worked through plenty of challenges during his two decades and change in charge of Zip2, PayPal, SpaceX and Tesla, but few can match the constant, consistent knock of the last nine days.

Musk has remained largely quiet, at least by his standards, tweeting Tesla’s official response to the initial crash — “The customer who died … had a loving family and we are beyond saddened by their loss” — followed by a handful of defensive statements and links about driver fatalities and erroneous reporting during the following days.

But even that limited communication might have missed the mark, according to a crisis management specialist.

“What a CEO should do when there’s a death associated with one of his company’s products is respond, first and foremost, with compassion, and then with words that express competence and confidence,” Jonathan Bernstein, president of Bernstein Crisis Management said in an interview with The Guardian.

“Quoting statistics that explain why the death isn’t so bad in the big picture has been proven time and time again to be ineffective in influencing public opinion.”

Should Tesla be testing its Autopilot on the roads with real drivers? Could the last week actually set back the drive forward for autonomous cars? Musk is a champion for the technology, but his focus might be splintered — also trained right now on hitting delivery goals and replacing yet another top exec.

Rich Heley, the company’s vice president of product technology, is headed to Facebook and its new Building 8 research lab after close to three years with Tesla, just the latest big name to move on this year. Five vice presidents or their equivalents have left the company in 2016, including Greg Reichow, VP of production, and Josh Ensign, VP of manufacturing. Those are hardly the personnel moves you want when your production is scheduled to increase tenfold in the next few years.

How closely are those departures tied to the struggle to hit delivery numbers? Musk still wants to churn out 500,000 Teslas per year once the Gigafactory is up and running in the Nevada desert. The 14,370 Models S sedans and X SUVs delivered in the second quarter are a far cry from that more significant number.

One sliver of good news for the electric carmaker: Its stock is up $3.66 (1.72%) over the course of these last nine days, and $72.32 (50.36%) since February.


2. Meanwhile, Over in French Courts

The week was not kind to Serge Dassault, either, though you probably heard far less about his problems than Musk’s.

Dassault, the nonagenarian chairman and CEO of Dassault Group, the parent company of Dassault Systemes and Dassault Aviation, went on trial Monday for charges related to tax fraud and stashing more than 30 million euros in offshore tax havens like Liechtenstein, Luxembourg and the Virgin Islands.

Dassault did not appear in court Monday when his trial opened. On Thursday, the prosecution requested a suspended two-year prison sentence, a five-year stretch of ineligibility to serve as a French senator — he has held that position since 2004 — and a 9 million euro fine. Judgment is expected September 1.

Dassault has not, historically, been free from controversy: In 1998, he received a two-year suspended prison sentence in Belgium for bribing members of that country’s Socialist Party to win a contract for military helicopters. More recently, in 2014, he was charged with purchasing votes during his campaign for re-election as mayor of the Paris suburb Corbeil-Essonnes.

3. Tweet(s) of the Week (3D Printing Edition, in Triplicate, Of Course)

Lucky 7. Quoteable

“The International Federation of Robotics reports that industrial robot sales will increase 15% annually until 2018. This means factories and plants will employ about 2.3 million industrial robots globally. As this robot worker population rises, the manufacturers and operators will want to see their profit margins increase as well. And this means the new breed of bots will change, becoming even more efficient and productive.” — John Hitch, New Equipment Digest, Connect the Bots: Four Robotics Trends and Their Link to Advanced Cables

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