Elon Musk shakes up Tesla as another Model S faces crash queries

Marco della Cava | USA TODAY

Show Caption Hide Caption Raw: Feds probe Fla. fatal Tesla crash and fire The National Transportation Safety Board is investigating a crash and fire involving a Telsa Model S car. Two teens died in Fort Lauderdale, Florida crash on Tuesday. The probe is not expected to involve Tesla's semi-autonomous Autopilot system. (May 11)

SAN FRANCISCO — Tesla's week started with a bang Monday as CEO Elon Musk announced a management "flattening" designed to meet make-or-break manufacturing goals while Utah police investigated why a Model S hit a stopped fire truck at 60 mph.

The shuffle comes as Tesla's head of engineering embarks on a leave of absence and its liaison with federal safety officials defects to Waymo, formerly known as Google's self-driving car project.

This is a time of heightened scrutiny for the electric automaker as it pushes to double production of its entry-level Model 3 sedans to 5,000 per week, a volume considered critical to both short-term cash flow and long-term market success.

Tesla also is grappling with federal agency probes into other accidents involving its vehicles, specifically a Model X that hit a highway divider in California while in Autopilot mode, killing its driver, and a Model S that hit a concrete wall and burst into flames in Florida, killing two teenagers.

In a memo sent to employees Monday and reviewed by USA TODAY, Musk said Tesla was "flattening (its) management structure to improve communication" and would dispense with any "activities that are not vital to the success of our mission."

Musk recently walked back his belief that Tesla could rely largely on a robot-staffed assembly line, and his memo reiterated that the company would continue to hire in both "critical hourly and salaried positions to support Model 3 production ramp."

Musk hinted at the shakeup in his tempestuous conference call with analysts following Tesla's latest quarterly results, in which he brushed off questions about raising capital and reiterated his confidence that the company would be cash positive later this year.

The reorg coincides with engineering chief Doug Field going on leave and senior executive Matthew Schwall decamping to Waymo.

"At a high level, the timing couldn't be worse to lose high level people," says Daniel Ives with GBH Insights. "The Model 3 is the Tesla story today. So it's going to be an unnerving period for investors. If he can hit 5,000 cars a week by mid-July, all will be well. If he doesn't hit it, it'll be a red flag and he'll have a much shorter leash."

Schwall had served as Tesla's technical liaison to various federal agencies such as the National Transportation Safety Board and the National Highway Traffic Safety Administration, both of which had been called in to review various Tesla crashes.

Waymo said Schwall will work in part on the "field safety" of its self-driving cards, which are currently picking up passengers involved in a demo program in the Phoenix area.

Meanwhile, police in Utah have been in touch with NTSB officials in the wake of a May 11 crash in South Jordan, in which a 28-year-old woman traveling in her Model S at 60 mph hit a fire truck that was stopped at a red light.

Although photos of the incident show that the front end of the Model S was decimated in the crash, remarkably the woman sustained only a broken foot, says Tina Brown, public information officer with South Jordan's police department. There were no injuries to the driver of the stopped fire truck.

In a tweet Monday, Musk played up the safety aspect of the Model S said it was "super messed up" that media coverage of the Utah crash in which a woman broke a bone eclipsed "almost no coverage" of the 40,000 people who die annually on U.S. roads.

What’s actually amazing about this accident is that a Model S hit a fire truck at 60mph and the driver only broke an ankle. An impact at that speed usually results in severe injury or death. — Elon Musk (@elonmusk) May 14, 2018

A Tesla spokesperson said the automaker has not yet received any data from the car's computers, which are integral to determining whether the vehicle had its Autopilot system engaged at the time of the crash.

Autopilot is a driver-assist technology that can keep a Tesla in its lane while monitoring the speed of a vehicle ahead, functioning as a high-tech cruise control.

After past incidents where Autopilot was involved, Tesla has vociferously defended its technology and reiterated that the system is meant to be used with an abundance of human oversight.

In 2016, a Model S in Autopilot mode slammed into a tractor trailer that cut across the driver's path. A NTSB investigation found that the driver failed to heed the car's warnings to retake control, but also faulted Tesla for enabling the feature on a highway that allowed motorists to cut across the road.

In a Model X crash in Mountain View earlier this year, Tesla said the Autopilot system repeatedly warned driver Walter Huang that he needed to retake control of his car. But Huang's family has hired lawyers and is contemplating a lawsuit on the grounds that Huang had repeatedly complained about Autopilot's inability to keep the car in its lane on that stretch of road.

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