Two key manufacturing executives are leaving Tesla, even though the company is about to start production on the Model 3, which goes on sale next year.
Tesla vice president of production Greg Reichow and vice president of manufacturing Josh Ensign, are both slated to leave the company. A spokesperson confirmed the report to Bloomberg, while also noting that Reichow, who is one of the best-paid Tesla employees, will stay on until a replacement can be found.
A source told Bloomberg that the two executives are leaving because of production delays and glitches, along with a recall that has plagued the company’s Model X crossover. Tesla denies this.
“This is not about the Model X,” a Tesla spokesperson told Bloomberg. “After being at Tesla for over five years and leading its production team for the past three years, Greg Reichow has announced his intention to take a leave of absence from Tesla so that he can have a well-earned break.”
Five Tesla vice presidents have left their jobs this year, with Reichow being the biggest name. Reichow was the company’s production boss, and made close to $6.4 million in total compensation the past two years, as reported by company filings.
“Greg and the team deserve a lot of credit for building an all-new manufacturing organization from the ground up and for making Model S and Model X a reality,” Tesla CEO Elon Musk said in a statement e-mailed to Bloomberg. “We’re confident that with the strength of the team, high-quality manufacturing at Tesla will continue.”
Within the same email, Reichow said: “My belief in Tesla’s ability to successfully deliver great cars and inspire the world to drive electric remains as strong as ever.”
In order to make sure production flow isn’t interrupted, Reichow will be involved in transitioning his responsibilities to a successor.
The Model X launch struggles with delays, which Musk took responsibility for. Tesla’s CEO even implied the problem was overconfidence on the company’s part, as it tried to put a lot of new features, including the “falcon-wing” doors, into the first generation of the Model X.
Not only was the Model X launch delayed by 18 months, but seat problems led to recalls.
“In retrospect,” Musk said last year, “we would not have had so many features and functionality.”
Tesla reports its first-quarter earnings after trading closes today.
Reichow and Ensign join other key Tesla employees in leaving this year. The others include Michael Zanoni, vice president of finance and worldwide controller; James Chen, vice president of regulatory affairs and deputy general counsel; and Ricardo Reyes, vice president of global communications. Telsa claims that out of 40 executive hires made last year, just one has departed, and that half of those who have Musk as a direct report have been employed by the company for over five years.
With somewhere in the neighborhood of 400,000 reservations being placed for the Model 3, which will be Tesla’s first “mass-market” EV, whoever replaces Reichow will face a large challenge in ramping up production, not just for the Model 3, but also for the Model X and for batteries to power all of three of Tesla’s models.