Ed Note: Tim Higgins’s new book, Power Play: Tesla, Elon Musk, and the Bet of the Century, tells the history of the most famous electric car company in the world through its highs and lows. In the excerpt below, the author recounts how Musk took control of a factory when Model 3 assembly was falling behind, firing top executives and engineers with a manic brutality.
As they struggled with the automated assembly line, Antoin Abou-Haydar, an engineer hired several months earlier from Audi to work on production quality, raised an observation to Doug Field and other executives. The engineering team had done such a good job designing the Model 3 for assembly that in the previous July and August they had had a comparatively easy time making the car by hand. Instead of the complex automated assembly line that they were building, maybe they should just start over again—without robots?
The suggestion didn’t go far. Musk was invested in making his line (which he had taken to calling the Alien Dreadnought) work. He was selling investors on the idea that eventually the factory would need only a few people, similar to the way Tim Watkins had programmed machines to work an overnight shift alone. Musk had envisioned a three-story assembly line, with parts of the car moving overhead on the top level to workstations on the second level, where workers would add parts delivered from the third level beneath their feet by a conveyor belt system. It seemed like an eloquent system to save space and manpower. In practice, it was a mess. Engineers couldn’t get the timing right. The lack of space at the factory led to a crowded environment, one that felt like walking through a battleship.
By spring, however, it was clear that something needed to be done to break the logjam. The company was burning money; Abou-Haydar’s idea took on new urgency. To accommodate it, a second, less robotic general assembly line was erected inside the factory, immediately resulting in a pickup of production. Musk on Twitter admitted his error: “Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”
To meet the goal of 5,000 a week, however, they’d need to do even more. They needed to add a third assembly line for the Model 3. But by this point, the factory was chock-full. They were already having to do quality inspections outside under a giant tent. The team began to wonder if they could do the same with an assembly line.
Adding additional assembly lines, especially unautomated ones, would require many more workers on the car than originally planned. In meetings, Musk lost track of the numbers. He kept talking about having around 30,000 employees, when in fact the head count with outside contracts had grown to more than 40,000. (Musk’s attention was said to sometimes wander after the start of budget presentations.) Deepak Ahuja, the returned CFO, finally had to gently confront Musk with the fact that the company now had many more people.
Musk didn’t take it well. It was the kind of detail that he latched on to, as if it crystallized a bigger issue, namely that Tesla’s cost structure wasn’t working. The plan had been for Tesla to break even on a rate of 2,500 Model 3s a week. But the added manual labor was jacking up the cost. Ahuja’s new calculations that spring didn’t have the company breaking even at 5,000 a week. Musk began to freeze spending, including a halt to plans to dramatically increase the size of service and delivery centers across North America. Musk wanted to slash jobs as quickly as they could.
The failures at Fremont led Musk to a predictable place. He became unhappy with Field. Though Field had done what he’d originally been charged with doing, bringing the excitement of the Model S to the mainstream with the Model 3, the factory was in disarray. It could be argued that it was Musk’s own fault for hastening production, despite the admonitions from those around him. Still, he turned to a familiar solution: Musk took over, stripping Field of oversight of manufacturing.
It was the beginning of an inglorious end for Field, who had elevated Tesla’s product development operations, competing for some of Silicon Valley’s best engineering talent and creating a car that by many measures was superior to the Model S. He wasn’t without internal critics. Some longtimers said he’d instituted a more corporate outlook in the operations, that the place had become more political under his watch. Still, he was perhaps better poised to become Tesla’s next CEO than any of his colleagues, if Musk ever made good on his promise to step back from day-to-day command and focus on product development.
That spring Musk in effect took control of the factory himself. Scaling back Field’s duties didn’t stop Musk, one evening at the factory, from calling the demoted executive up, demanding to know where he was, according to an ally who’d been told the story.
Another evening, Musk summoned to a conference room a group of engineers who were focused on making the assembly line work. He stormed in and proceeded to tell them all that their work was “complete shit.” He ordered each person to go around the room and tell him “who the fuck you are and what the fuck you’re doing to fix my goddamn line.” As he berated the team, one of the engineers had had enough and quit to Musk’s face. Musk screamed as the young engineer walked out. In another meeting, Musk walked in to find a manager that he’d grown unhappy with and said, “I thought I fired you yesterday.”
It was around this time, during a tour of the factory, that Musk saw the line had stopped. He was told the automatic safety sensor halted the line whenever people got in its way. This angered him.
As he sputtered about the lack of danger from a slow-speed line, he began head-butting the front end of a car on the assembly line. “I don’t see how this could hurt me,” he said. “I want the cars to just keep moving.” A senior engineering manager tried to interject that it was designed as a safety measure. Musk screamed at him: “Get out!”
For those who had known Musk longest, these sorts of incidents were a painful mutation of what they had seen from the early days. Everyone knew he had a short-temper and didn’t suffer fools. But in the early years, some felt like those who had been cut maybe deserved it. Tesla was about being the best and the toughest. Managers would trade Musk barbs like war stories: the time he fumed at a manager, for instance, that he would split his skull open and brand his brain with an “F” for failure.
But now, longtimers said, his anger seemed to lack any predictability. And instead of behind closed doors, his rage was on full display, no matter the employee’s rank. It was as if the company had grown so large, he didn’t know who specifically to blame anymore, so he was just yelling into the darkness.
Whatever the case, Field had reached his limit. It was a frustrating position: He had been recruited to oversee development of the Model 3 (as well as forthcoming crossover vehicle, the Model Y), but had been handed the reins of the manufacturing operations after Greg Reichow departed. Now, after his effective demotion, he was watching Musk dismantle his team person by person, and in humiliating ways. He was reluctant to leave, of course, feeling that he’d be abandoning those who remained. But it was time. His mother had died and his father was sick. Plus, his kid was about to graduate from college—all life events he was sure to miss on the factory floor.
The team was told Field was taking a leave of absence, but it was clear to many that he was gone for good. By the time Tesla officially announced his departure, the biting nature of his exit was evident. He would be among at least fifty vice presidents or higher-ranking executives to depart in the previous twenty-four months (partly fueled by the large number of big-title managers at SolarCity who had left after the acquisition). The news of his exit generated a flurry of headlines, as would be expected of the departure of a prominent car company’s engineering chief. But Musk took umbrage at the press coverage.
Tesla’s public relations team pushed media outlets to downplay the significance. The automotive website Jalopnik ran a tongue-in-cheek correction: “A Tesla spokesperson reached out to clarify that Field was NOT the top engineer at Tesla, but rather that he was the top vehicle engineer. Much as there can only be one God, there can only be one Top Engineer at Tesla, who is Elon Musk. Second engineer at Tesla is JB Straubel.”
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[At the factory in] Sparks, Straubel’s team was seeing some improvements, but they came at a cost. They had reached a rate of building three thousand packs a week and at one point had an hourly rate of building that if extrapolated would mean hitting the five thousand mark. But hitting that peak and then keeping at it, day after day—that was another thing. Amid the push, they were wasting a lot of materials; cells were being damaged by some of the automation as they rushed to figure out fixes. A report cataloging issues, compiled by quality operations supervisor Brian Nutter, underscored the latest game of whack-a-mole that Tesla was fighting: Battery cells were being found dented because of an issue at a flipper station, while elsewhere some parts were being rejected for excess adhesive in between cells. One production line was going down because of insufficient cooling tubes. An automation mistake wasn’t properly moving a cure rack forward, causing a pileup of battery modules.
That spring, during a public conference call with analysts, Musk tried to explain away the first quarter’s horrid results. About thirty minutes into the call, one Wall Street analyst asked when the company would reach its gross margin target for the Model 3, which, he said, the company had seemingly pushed back by six to nine months. Musk interrupted as his CFO tried to explain, saying it would be resolved in a few months. “Don’t make a federal case out of it,” Musk said snarkily. The analyst turned to Tesla’s cash needs. Musk interrupted again as the analyst elaborated. “Boring, bonehead questions are not cool,” he said. “Next.” An analyst for RBC Capital Markets wanted to know what kind of effect moves to open up reservations to more customers had had on them actually configuring their Model 3s for purchase. Musk was dismissive. “We’re going to go to YouTube, sorry,” Musk responded, referring to a retail investor with a YouTube show who had been allowed to call in with questions. “These questions are so dry. They’re killing me.”
Musk’s imperiousness didn’t play well with investors. In a span of about twenty minutes, the stock fell more than 5 percent. The mutterings around the conference call were ominous. Some said the outburst reminded them of the final days of Enron.
From the book POWER PLAY: Tesla, Elon Musk, and the Bet of the Century by Tim Higgins, published in the US on August 3, 2021 by Doubleday, an imprint of The Knopf Doubleday Publishing Group, a division of Penguin Random House LLC, and in the UK on August 5, 2021 by WH Allen. Copyright © 2021 by Tim Higgins.