‘Only the paranoid survive’: Elon Musk on edge after ‘extensive’ sabotage and fire in factory

The suspect allegedly exported data to others outside the company; CEO Elon Musk also separately emailed Tesla employees about a small fire that halted production Sunday night

PUBLISHED : Wednesday, 20 June, 2018, 1:51am
UPDATED : Tuesday, 03 July, 2018, 8:22pm

Elon Musk has urged paranoia among his staff after Tesla suffered “extensive and damaging sabotage” by an employee and a fire that paused production of his Model 3 cars.

Musk, Tesla’s CEO, emailed employees on Sunday night to allege that an employee had exported data to people outside the company, and cautioned that many people “want Tesla to die”. The following day, a small fire briefly paused production at its electric vehicle plant in Fremont, California.

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“Could just be a random event, but as Andy Grove said, ‘Only the paranoid survive,’” Musk wrote on Monday, referring to the late chairman and CEO of Intel Corp. “Please be on the alert for anything that’s not in the best interests of our company.”

The alleged Sunday sabotage saw the suspect carrying out “quite extensive and damaging sabotage” to Tesla, including changing the code to an internal product and then exporting data to others outside the company, a CNBC report said.

“The full extent of his actions are not yet clear, but what he has admitted to so far is pretty bad,” Musk wrote in his email, cited in the report. “His stated motivation is that he wanted a promotion that he did not receive. In light of these actions, not promoting him was definitely the right move.”

Tesla declined to comment on the email, the report said.

Musk separately emailed Tesla employees about a small fire that forced the company to halt its body production line for several hours on Sunday night, CNBC also reported. Tesla confirmed that message.

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The problem erupted as Tesla races to increase auto production to meet a goal of producing 5,000 of the company’s Model 3 vehicles per week by the end of June – a goal Musk told shareholders on June 5 that the company was “quite likely” to achieve.

The company’s forecasts for generating profit and cash in the third and fourth quarters of this year are based on this objective, and falling short would reignite concerns about whether the company may need to raise more capital.

The company last week disclosed a corporate restructuring aimed at cutting 9 per cent of its workforce while sparing Model 3 production employees.

The ramped-up production effort caused a space crunch at Tesla’s production facilities, Musk tweeted early on Tuesday. Responding to the crisis, company employees built a giant tent to house a new assembly line in just two weeks, he said.

While the fire may have been an accident, Musk cautioned vigilance in the building.

“As you know, there are a long list of organizations that want Tesla to die,” Musk wrote, referring to Wall Street short sellers “who have already lost billions of dollars,” oil and gas companies that “don’t love” to see solar power and electric cars advancing, and automakers that produce gasoline and diesel vehicles.

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“If they’re willing to cheat so much about emissions, maybe they’re willing to cheat in other ways.”

Tesla is no stranger to concerns of sabotage. The company sued a former oil-services executive in 2016 for impersonating Musk in an email to former Tesla CFO Jason Wheeler. In the lawsuit, Tesla said the email was part of an oil-industry effort to undermine the company’s push for energy-efficient transportation.

Despite a dip on Tuesday, Tesla stock has climbed for seven consecutive days and more than US$19 billion has been added to the automaker’s market capitalisation in the past month, in part due to the confidence Musk has expressed in achieving the Model 3 production target. In a tweet on Sunday, Musk warned that those betting against the company “have about three weeks before their short position explodes”.