Elon Musk Addresses Tesla's 700 Firings and Rants Against Press

The Tesla founder is feeling the pressure and addressing the new problems with Model 3 production, including the recent firings at the automaker.

Elon Musk is finally directly addressing Tesla’s current Model 3 production issues and the recent firing of 2 percent of his company.

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All We Know About the Tesla Mass Firings and the Legal Battle to Follow

The automaker is currently struggling to expedite production of the long-awaited affordable Model-3 sedan. So far only 260 Model 3’s were produced last quarter, well below the 2,000 aim, something Musk previously referred to as “production hell,” which he scales from one to nine. Nine being the worst.

“I was really depressed about three or four weeks ago when I realized that we were kind of in level nine,” Musk said during an earning’s conference call, as reported by Fortune. “Then we got to level eight, and now I can see sort of a clear path to sunshine. And so I feel really pretty optimistic right now. But if you’d talked to me three weeks ago, I would have been quite pessimistic, and I was sort of quite down in the dumps.”

Despite his optimism, Musk is still feeling the pressure of a record $619 million quarterly loss, and this was more than evident after he yelled, “SHAME,” at the journalists covering the conference and listening in on the call with investors.

This could have been a response to the reporters questioning the recent firings of 700 employees from Tesla, something Musk said wasn’t that big of a deal. He claimed that the number out of his 30,000 workforce wasn’t very high and reiterated the company’s reason for the dismissals being standard performance reviews.

However, the scorned employees feel differently and say the firings are a way to disrupt unionization efforts, something Tesla has generally discouraged in the past. Right now there is a very active lawsuit happening, questioning whether Tesla violated state law, which requires them to give employees 60 days notice before termination. The former workers state that this never happened.

Amid all the chaos, Musk is currently at the Gigafactory overseeing the Model 3 production.

“I always move my desk to wherever — I don’t really have a desk actually — I move myself to wherever the biggest problem is in Tesla,” Musk explained.

“I really believe that one should lead from the front lines, and that’s why I’m here.” - Elon Musk

He blames the new type of battery Tesla is building for the lower priced sedan, added to that, problems with a subcontractor has also slowed things down considerably.

“We had to rewrite all of the software from scratch,” Musk said, adding that they’d redone “about 20 to 30 man-years of software in four weeks” for the battery module. “This is what I spent many late nights at the Gigafactory working on.”

Elon Musk Addresses Tesla's 700 Firings and Rants Against Press
Source: Tesla

On top of this UBS also has some bad news for Tesla’s third-quarter earnings, after the company burned through about $1.2 billion in cash during its second quarter thanks to the cursed Model 3. Tesla aims to raise $1.8 billion through a bond offering, which will leave it with $5 billion or so in cash, claims UBS analyst Colin Langan to Fortune.

“With limited Model 3 profitability, infrastructure expansion needs, and Model Y capacity build (late 2019), we believe Tesla will eventually need additional outside funding,” Langan wrote in a note to clients.

Production hell, indeed. We’d say it’s at about a level 10 now.

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