Elon Musk Lays Off Tesla Workers For The Fourth Week In A Row

Good morning! It’s Tuesday, May 7, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

Tesla Had A Very Interesting Week

1st Gear: Tesla Job Cuts Enter Fourth Week

Elon Musk is still cutting hundreds of jobs at Tesla. The automaker went through another round of layoffs in the early morning hours of May 6. That means there have now been layoffs at Tesla for four straight weeks. Workers who spoke with Business Insider said they were notified of additional cuts to their team on Monday morning. Several also posted on LinkedIn that they’d been let go. From Business Insider:

“After watching my team gradually slimmed down week after week since mid-April, I received the dreaded ‘Hello Employee’ email this Sunday afternoon,” one Tesla worker wrote on LinkedIn.

Another worker shared a screenshot of her layoff email on LinkedIn that showed her last day of work would be May 5.

[…]

Workers at the carmaker previously told Business Insider the continual waves of layoff notices had left them on edge, with many looking for opportunities outside of the company.

“I keep waiting for Elon to send another email and tell us they’re finally done firing people,” one current Tesla worker, who requested anonymity to speak on the conditions of their employment, said. “We need some level of closure or a sign that we can stop worrying about losing our jobs.”

Since Elon Musk first announced that Tesla was slashing more than 10% of its workforce on April 14, workers have continued to get layoff notices in waves. At the time, Musk said the cuts were due to a “duplication of roles and job functions in certain areas,” according to a screenshot of the April email that was viewed by BI. Within hours of that memo, the company began notifying impacted employees that they’d been terminated. But, some employees did not learn there role had been eliminated until they attempted to badge into a Tesla facility.

These layoffs over the past month have hit a number of different teams, from recruiting and marketing to nearly all of Tesla’s Supercharging team. This is apparently part of Musk’s plan to be “absolutely hardcore about headcount.”

One day we may find out just how many people are supposed to be working at Tesla.

2nd Gear: Lucid Had A Rough First Quarter

Electric vehicle maker Lucid just laid out its first quarter earnings report, and it’s as not good as you may have guessed. The California-based automaker posted a Q1 net loss of $685 million, but it did reiterate its 2024 production goal of 9,000 vehicles.

$685 million may sound like a lot (because it is), but it’s actually an improvement over the automaker’s 2023 Q1 net loss of $780 million. It’s the little things. From Automotive News:

Revenue in the most recent quarter was $173 million, an improvement over the $149 million it reported in the year-earlier period. Lucid said it ended the first quarter with cash and cash equivalents of $2.2 billion compared with $1.4 billion in the fourth quarter of last year.

Lucid continued to burn through cash despite improving sales of its Air sedan in the first quarter compared with the same quarter last year.

Lucid reported production of 1,728 Airs in the January-March period and deliveries of 1,967. While sales mark a 40 percent increase compared with the first quarter of 2023, generous sales incentives have not been enough to spur production, leaving Lucid running behind its forecast to make 9,000 vehicles this year.

After posting its financial results, Lucid hosted an earnings call with investors and analysts. On the call, CEO Peter Rawlinson said that a significant portion of the automaker’s current spending is to prepare for future products that will allow it to scale volume and reach profitability.

“It’s all about scale,” Rawlinson said in response to an investor question about turning a profit. “The more we scale, the more cars we make, the more volume we can spread across fixed costs.”

Rawlinson said the pathway to profitability starts with expansion of Lucid Air sales, building on the 40 percent delivery growth in the first quarter. The next step is launching the Gravity crossover, Lucid’s second model, late this year. The third major step is launching a smaller “midsize” platform that will underpin a new vehicle in late 2026 that will start around $48,000 before shipping, he said.

I’ve gotten a little sneak peek at Lucid’s midsize plans. It seems like a really neat next chapter for the EV startup. I just hope it can hold out long enough to get there. Luckily for Lucid, it does have the backing of Saudi Arabia.

3rd Gear: Fisker Shutters Manhattan Beach HQ

In even more bad news for EV startups, it sure seems like Fisker is in the beginning stages of winding down operations. At least, that’s how it looks from the outside. The automaker is closing its Manhattan Beach, California headquarters. Last month, Fisker apparently told workers at that office that they would be moved to the company’s site in La Palma, California by the beginning of May. From Business Insider:

Some workers were told to collect their belongings from the Manhattan Beach office in preparation for the move, the sources said.

The two facilities are located about 40 miles apart in California. Fisker began leasing its 73,000-square-foot headquarters in 2020. The La Palma site had been initially set up as a research and development space.

[…]

The move comes as Fisker faces headwinds from a slowdown in the EV industry. The carmaker has warned multiple times over the past few months that it could run out of money and file for bankruptcy within the year.

On April 23, Fisker said in a regulatory filing with the Securities and Exchange Commission that it had just $54 million in cash equivalencies as of April 16 and “believes that its available liquidity will not be sufficient to meet its current obligations.”

Fisker has said it’s looked for additional funding or a potential buyer. In April, Fisker CEO Henrik Fisker told staff that the company was in talks with four different automakers regarding a potential acquisition.

The company has initiated a series of layoffs over the past few months and warned workers on April 29 that they could be laid off and Fisker’s “facility will close” in two months if the automaker is not able to change its course.

All of this bad news, of course, comes just after reports that Magna will stop building Ocean electric crossovers at its plant in Austria, and there are no plans to restart production at this point.

4th Gear: UAW Members OK Strike At Stellantis Plant

United Auto Workers union members at Stellantis’ Warren Stamping Plant in Michigan have voted to authorize a strike because of a number of issues, from nonworking fans to bathroom sanitation. From the Detroit Free Press:

The vote to authorize a strike by members of Local 869 does not mean the more than 1,000 members will strike, but it does significantly increase pressure as grievance negotiations play out. Warren Stamping supplies multiple plants in the United States, Canada and Mexico that build the Dodge Durango, Chrysler Pacifica and Ram light- and heavy-duty trucks as well as Jeep Gladiator, Grand Cherokee, Wrangler, Wagoneer and Grand Wagoneer.

The union did not release the vote total, and it wasn’t clear Monday how soon strike action could follow.

Stellantis spokeswoman Ann Marie Fortunate provided a company statement Monday night:

“While the members of UAW Local 869 from Stellantis’ Warren (Michigan) Stamping Plant have voted to authorize a strike, discussions between the company and UAW are ongoing and employees are still at work. Stellantis remains committed to providing a safe and healthy work environment for all employees and resolving this matter without a work stoppage.”

A union video posted to social media shows images presumably from inside the plant of standing liquid and debris on the floor, with workers describing a litany of issues, including oil leaks.

“Not only do we want these health and safety grievances resolved, we want our members to leave the same way they came,” UAW Local 869 President Romaine McKinney III said in a news release. “We want members to understand they’re not just a number or just a body on the line. They will come to work and feel like they have some ownership in that building.”

Local 869 member Chautay Smith said in the release: “We must stand up and stand together for this health and safety grievance procedure because this is our livelihood. So, let’s stand up at Warren Stamping and take care of us the way we need to be taken care of.”

Go get ‘em, union brothers and sisters. No one should have to deal with unsafe and unsanitary working conditions, especially at a company that made over $204 billion in 2023.

Reverse: Merger Of Equals My Ass

Neutral: A Fabulous Car

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