By on May 5, 2017

Tesla Factory California

Tesla Motors has said it is making efforts to resolve outstanding issues with Grohmann Engineering’s legacy clients, including Daimler, BMW, Bosch, Intel, and Volkswagen Group. After the Tesla takeover last November, CEO Elon Musk indicated to Grohmann’s management team that the brunt of its efforts should be diverted away from former customers in order to focus primarily on production facilities related to the Model 3.

The move placed Musk at odds with company founder Klaus Grohmann, eventually resulting in his abrupt departure, and was a major source of tension among the German workforce — which, backed by IG Metall, has threatened to strike. Negotiations have already yielded improved worker pay and hiring promises, but Tesla now appears to be tackling the issue of how to handle the numerous clients who have been hung out to dry.

Tesla is counting heavily on Grohmann’s automation and engineering prowess to ramp up vehicle production. Initially, the U.S. EV manufacturer said it could manage without the German workforce, but that doesn’t seem to be the case — considering how well its collective bargaining tactics seem to have worked.

However, it’s unclear the exact lengths Tesla will go to make amends with Grohmann’s legacy clientele. “We have been in contact with every client for weeks on this issue and are on the way to finding individual solutions with each of them,” Tesla said in a Thursday statement to Reuters. However, any additional efforts to compensate former customers doesn’t serve the automaker beyond maintaining peace with Grohmann Engineering, and is counter to Musk’s initial plan to cut them lose.

“We believe that Grohmann will honor its contractual obligations toward us in future,” BMW said in a statement, before adding that it had not been “formally notified” about any changes to the contractual arrangements one-way-or-another.

[Image: Maurizio Pesce/Flickr (CC BY 2.0)]

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20 Comments on “Tesla Struggles to Make Nice with European Engineering Firm’s Jilted Clients...”

  • avatar

    Legalities aside, it’s a $hitty move to tell your existing customers that you simply don’t feel like working on their projects right now because you have an internal pet project you’d like to work on instead.

    If I was the former CEO of that business, I’d quit too; it’s no fun to watch your new corporate overlords take a cr4p all over the relationships you’ve spent years building with your customers, who might have make very expensive plans around their work being performed as agreed.

    • 0 avatar

      I’d have to imagine that would breach numerous contracts in place.

    • 0 avatar

      “Legalities aside, it’s a $hitty move to tell your existing customers that you simply don’t feel like working on their projects right now because you have an internal pet project you’d like to work on instead.”

      I am an employee at a very small manufacturer of laboratory test equipment with an emphasis on small. (about 12 employees, few million in annual sales).

      We have had this happen to us and yeah it sucks. A company that made the cable harnesses for our machines got a HUGE contract with a major client. Overnight they had more work than they knew what to do with. The end result was that they decided to drop us to make room in production. It wasn’t an outright breach, they did complete the work that we had contracted with them. They just didn’t accept any more requests for quotes from us.

      Different situation here of course. The clients are much bigger. I just understand what it’s like to be on that end of things.

  • avatar

    “make nice” ….. Or “to Avoid lawsuits” ?

  • avatar

    Sounds like this guy sold the company, got a payday, and is upset that he’s not the boss any longer.

    Did he really expect to sell his company, then tell the new parent company how to run its business?

    Sorry pal, life doesn’t work that way.

    As for the clients – tough cookies. If you outsource components of your business, you accept the risk that comes with that outsourcing – up to and including the sale or closure of the company providing those services.

    A whole bunch of businesses here made assumptions about each other that didn’t pan out.

    • 0 avatar

      Yeah except Elon is doing this out of desperation. It is well known his plant has been running like dog sh1t for almost a year now. Automation engineers that we contract out have all been on site and claim its a sh1t show. No one internally at Tesla knows what the f*ck to do to get out of the hole.

      Tesla is desperately trying to insource expertise when it doesn’t know how to apply said expertise. They’re essentially buying a company for their know-how, then upsetting said know-how so they might as well have just poached engineers one by one and set up a shadow company in Germany.

      So yeah… Life doesn’t work that way or whatever you’re saying because in the life of Elon, he still doesn’t know how to build a f*cking car. Most of my automation guys used to work with the vendors and vice versa. In robotics, the line between OEM and application engineering is very blurred. Tesla’s problems are more systemic than what everyone would like to think.

      • 0 avatar

        try saying that on any of the tech sites/blogs, and the geeks all get the knives, pitchforks, and torches out because you said something not nice about Tesla.

        • 0 avatar

          Yeah, but some of us geeks recognize certain CEO types. I’ve worked for CEOs that think they understand a particular technology – and they really don’t have a clue. I’m starting to see some of those patterns with Musk. The level 5 autonomy in 2 years goal isn’t reality. Going to a new platform for the Y worries me too.

          I’m probably going to buy one of the new German EVs, but you know, I don’t have a lot of confidence in them either – other than the fact it will have a nicer interior and will be put together better. Sure, the Porsche won’t have the SuperCharger network, but with 300+ miles range, I really don’t think I’ll need public charging. It’s been over 14 years since I’ve covered more than 250 miles in a single day in a car.

      • 0 avatar

        Well you seems to put out a very bad picture of the company.
        Elon having no idea. I will not say those words about a person who has till now created 3 successful companies.
        I think these are growing up pain for the young company.
        Moreover I will not base my judgement on the media reports from the German manufacturers. Real issues may be completely different than what is reported.

        • 0 avatar

          Elon Musk did not “create” Tesla.

        • 0 avatar

          @addm: I’ve known plenty of successful people that sometimes get blinded by their own success.

          Like the level 5 autonomy. I’m an expert at it and have co-developed aviation collision avoidance systems. I know where the technology stands at this point. Elon certainly has done some great things as SpaceX and I think he’s done well to get Tesla to the point it’s at now. But those successes are blinding him a bit as to the difficulty of achieving level 5.

          I catch myself making some of the same mistakes. For example, I’m a good athlete and an expert skier – alpine, telemark, freestyle cross-country. I’ve had no problem mastering other sports. Snowboarding, yeah, I can do that. Why not. Wrong. I was surprised that something little kids seem to have no problem with, I was really sucking at. I thought since I was great at those other snow sports I wouldn’t have a problem with snow boarding, but was dead wrong.

          • 0 avatar

            I don’t think Tesla is at the forefront of autonomous driving.
            Google at present is definitely ahead with their testing in challenging environment. Look at their data. One intervention needed in 5000 miles. Level 5 may be too much but most people will be more than happy with level 4

      • 0 avatar

        RE: Tesla.
        I ve been in the OLD GM plant and the one by IN/OUT Burger central -many times.
        They dont know what they are doing.
        They are overworked.
        Timelines are not connected to reality.
        Tons of 7th and 8th level (GM system) leaving.

        Just wait til they have real competition.
        Complete meltdown

  • avatar
    Lynn Ellsworth

    Who is Grothmann and what do/did they do for Bosch, BMW, Daimler, Intel, VW, etc? Did Grothmann build the Smart? Did they or Bosch build the Fiat 500 electric?

  • avatar

    The end is coming…
    Ya, understand how hated the trump admin is to almost everybody here judging from the post, but soon he will stop this snake oil salesman.

    enough of the fake news and pr.

  • avatar

    The end is coming…
    Ya, understand how hated the trump admin is to almost everybody here judging from the post, but soon he will stop this snake oil salesman.

    enough of the fake news and pr at our expense.

    • 0 avatar

      One of the comment from your article
      Let’s see behind the curtains. Author: George Landrith, President of Frontiers of Freedom.
      Anyone can try reaching him here
      His website is basically a political blog with a donate button
      A brief example of one post:
      “Too often, what liberals regard as scientific consensus [in climate change] is nothing more than their own political opinions and priorities masquerading as fact and necessitating the expansion of government.”
      I think this tells everything.

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