Tesla desperately needs a COO or No. 2 for Elon Musk


With all that in mind, some analysts and fund managers are hoping Musk will finally hire a chief operating officer. Or, at a bare minimum, they want him to announce a Tesla succession plan.

They have a point.

It makes no sense for Tesla to be essentially a one-man show while SpaceX has an extremely adept COO in Gwynne Shotwell, one of that company’s first hires, who is capable of stepping in to lead if Musk were unable to do so. Why doesn’t Musk have someone like Shotwell at Tesla?
Gwynne Shotwell, president and chief operating officer of SpaceX, has been a long-time lieutenant to Elon Musk. (Photographer: Andrew Harrer/Bloomberg via Getty Images)

“If anything happens to Musk, I don’t know what Tesla would do. I’ve been pushing the board of directors to have a COO and succession plan,” said Ross Gerber, co-founder and CEO of Gerber Kawasaki, an investment firm that has its largest position in Tesla but recently trimmed ts stake.

“It’s absurd that a company worth nearly $600 billion is run this way,” Gerber said, “especially since Musk has so many other things going on.”

Tesla did not respond to CNN Business’ requests for comment on this story.

Top executive left the company

Tesla has suffered a bit of a brain drain over the past few years, with several high-profile executives leaving. Most recent, and most alarming to Tesla investors, is this week’s departure of Jerome Guillen.

The nearly 11-year Tesla veteran had been running the trucking division and previously served in many roles, including president of the automotive division and program director on Tesla’s Model S sedan.

The departure of Guillen underscores how important it is for Musk to have a true operations guru who can focus on the details of the core car business without getting distracted by things like crypto and social media memes.

Tech executive tapped as new Ferrari CEO as it plans its first EV

“Jerome leaving Tesla is a huge void that will be tough to fill and increases pressure on finally hiring a COO under Musk,” said Wedbush Securities analyst Dan Ives in an email to CNN Business.

“Guillen has been a key part of the Tesla DNA success story over the last decade and he was tapped to lead the heavy trucking endeavors, which is now in a state of limbo,” Ives added.

Analysts would love it if Musk had someone to lean on: Steve Jobs had Apple (AAPL)‘s now-CEO Tim Cook, and Facebook (FB)‘s Mark Zuckerberg has it with COO Sheryl Sandberg.
It’s also worth noting that Amazon (AMZN) CEO (and space exploration rival) Jeff Bezos is planning to step aside next month, handing the reins to longtime Amazon Web Services chief Andy Jassy.

But the bench at Tesla now looks shockingly thin to many Wall Street observers.

Jeff Bezos has been halfway out the door at Amazon for a while

David Whiston, an auto analyst at Morningstar, said in an email to CNN Business that the only executive left who might make sense as a Musk successor is Andrew “Drew” Baglino, Tesla’s senior vice president of powertrain and energy engineering, who has been with the company since 2006.

“Wall Street doesn’t have a clear #2 unless it’s Drew Baglino,” Whiston wrote, adding that he did not think the company would tap chief financial officer Zach Kirkhorn as a successor.

“Guillen had a lot of operations/manufacturing knowledge that needs to be replaced,” Whiston said. He added that “finding an outsider willing to take a COO role under Elon will be hard” due to Musk’s penchant for micromanaging.

Tesla stock has had an electric run but has cooled lately

To be sure, many Tesla investors are not overly concerned about life after Musk. The company has been a phenomenal investment for longtime backers, surging more than 1,200% in the past five years.

But investors still may be growing a little frustrated by Musk’s constant tweeting and what seems like a lack of focus and self-discipline.

Shares of Tesla are down nearly 15% this year, even as the Nasdaq has gained 8% and the S&P 500 is up about 13%. Rival US automakers have also left Tesla stock in the dust this year, as investors grow excited about their prospects in the EV market.

Stellantis, formerly Fiat Chrysler, has gained nearly 45% in 2021. GM (GM) has surged more than 50% this year while Ford (F) has soared about 75%.

“Jerome departing stage left is disappointing to see,” said Ives, the Wedbush analyst. “Musk runs and controls the strategic vision of Tesla, but the executive bench is thin at a time that competition is coming from all angles in this EV green tidal wave.”



Source link

Spread the love

Written by bourbiza

Canada to start easing border restrictions for vaccinated citizens

With doses at risk of expiration in some states, J&J says it’s working to extend the shelf-life of its Covid-19 vaccine