Tesla Motors replaces CEO, plans layoff
Elon Musk, company investor and chairman, will take over as CEO, replacing Ze'ev Drori, who will join the board. Layoffs are also planned as part of a corporate review.
Updated at 1 p.m. PDT with details from Musk's statement.
Electric-car company Tesla Motors has replaced its CEO and plans to lay off some staff members as part of a corporate review, the company announced Wednesday.
Chairman Elon Musk is now CEO, continuing his activities in product development. Former CEO Ze'ev Drori is now vice chairman of the board and is expected to remain active in Tesla operations, according to a company representative, who did not give a reason for Drori's replacement.
The exact staff percentage of Tesla's forthcoming layoff has not been determined, but it is not nearly as high as the 50 percent reduction that had been reported, the representative said.
This isn't the first time that the high-profile carmaker has replaced its CEO since its founding five years ago. Former CEO and co-founder Martin Eberhard was ousted in 2007 by Musk after production delays.
Tesla last month said it intends to make ato construct a corporate headquarters and facility to manufacture its Model S all-electric luxury sedan, which is due in late 2010. But the economic downturn will mean that the start of production of the Model S will be pushed back until mid-2011, Musk said Wednesday.
Musk posted a message to the company blog, saying the layoffs are part of efforts to make Tesla cash flow-positive in the next six to nine months. Like the company representative CNET spoke with, he did not provide a specific reason for Drori's change in position.
"For this critical phase of the company, the scope of my role at Tesla will expand from executive chairman and product architect to CEO. With SpaceX now having reached orbit and about to enter its third year of profitability, I can afford to increase time allocated to Tesla," Musk wrote.
He said the layoffs would be "modest" and will include closing Tesla's Detroit office. Tesla will also focus on its revenue-generating businesses, namely its Tesla Roadster electric sports car and its profitable powertrain business.
To finance its planned expansion, the company intends to take advantage of a Department of Energy loan guarantee, which will make the cost of borrowing far lower than from other sources, Musk added. "We are not far from being cash flow-positive, but, even if that threshold ends up being further than expected, I will do whatever is needed to ensure that Tesla has more than sufficient capital to get there."