Tesla hired a boss to open up Singapore's pricy car market. 12 months later he's axed in Elon Musk's purge




 

Tesla is jettisoning ballast and battening down the hatches as CEO Elon Musk prepares for a global recessionary storm.

The first manager to admit he had to walk the plank under Musk's white-collar purge was Christopher Bousigues, who left his job at German business software provider SAP last year to build up the carmaker's operations in South East Asia.

"Tesla announced a 10% of workforce reduction. My role was chosen to be eliminated as of today," he wrote to recruiters on LinkedIn on Saturday, some 24 hours after introducing the Model Y crossover in the city-state's market and only 12 months into the job.

Following his ill-timed $44 billion Twitter takeover bid, Musk has come under repeated pressure due to a series of self-inflicted wounds. These included a "tone-deaf" demand for everyone to return to office without exception and, more recently, a botched communiqué on salaried job cuts that sent the stock into a tailspin.

The layoffs have been a source of controversy after the stock fell 10% on a Reuters report that one-tenth of the company's headcount would be slashed, citing Musk as saying he had a "super bad feeling" about the economy.

This spooked bulls as it suggested at least a temporary end to Tesla's growth story, which relies heavily on a long-term goal of increasing car sales on average by 50% annually throughout this decade, reaching 20 million vehicles by 2030.

Importantly, this would be more than Toyota Motor and Volkswagen Group, the respective number one and number two in the world, combined.

Later Musk clarified that overall staff would increase, while salaried positions would be "fairly flat." This soothed fears as it maintained the narrative that the number of blue-collar staff needed to build his cars will continue to rise as demand continues to exceed supply.

It sparked renewed calls from certain professional money managers who argue Musk must stop micromanaging all official communications through his own personal Twitter account and reinstate a professional public relations team to prevent such needless mishaps.

Layoffs are, however, nothing unusual among companies with lofty goals like Tesla. Former General Electric CEO Jack Welch, once a legend in the business community, was renowned for advising fellow managers to routinely purge the worst-performing 10% of their teams.

Most expensive place to own a car

Bousigues joined the company, by his own account, as a satisfied customer of at least three different Teslas since March 2017, relocating to Singapore voluntarily. He said he was proud to have been the first Tesla country manager in South East Asia.

"In the past year the team and I built the business from the ground up, made the Model 3 a common sight in the Singapore car landscape, set up 2 showrooms, 1 service center (that I affectionately call the Jewel of Asia), developed a network of 7 superchargers across the island, and successfully launched Model Y yesterday with overwhelming response," he wrote.

The first Teslas were delivered to customers in the wealthy city state last summer and its operations officially went live in the fourth quarter of 2021, according to previous posts from Bousigues.

Buying a car in Singapore is not straightforward, and it's deemed by the Guinness Book of World Records the most expensive place to own a vehicle in the entire world.

Owners need to bid for a Certificate of Entitlement (COE), similar to a plate registration, and valid for 10 years. Only instead of the price of COEs being fixed, the price fluctuates based on demand.

This quota system helps control the vehicle population in the Asian financial hub, where road space is limited.

According to local daily the Straits Times, government data showed there were 924 Teslas newly registered last year, or a tenth of one percent of Tesla's overall annual volume. It reported sources as saying that responsibility for managing Singapore's business would be moved to Hong Kong.

Some signs of improvement for Tesla did emerge out of Asia after Reuters reported that Musk aims to make more than 71,000 vehicles at its Shanghai plant in June, citing an internal production memo.

"Reaching a weekly run-rate of 17,000 cars, or 884,000 annualized, by mid-June provides a solid outlook for the months to come," wrote analysts at UBS, which last week upgraded the stock to a buy from a neutral rating.

"With that, Tesla would be on track to reach 1.4 million cars globally, in line with the company's 50% annual growth guidance."

Musk continues to battle headlines of mounting problems elsewhere. Most recently, U.S. traffic safety authorities moved one major step closer to recalling his vehicles over their automated driving software that may prove to be an indirect road hazard due to abuse by owners.

This story was originally featured on Fortune.com

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    (2022-06-27 13:48:38Z)

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