Back in June, Elon Musk issued an edict to employees at his Tesla and SpaceX companies saying they needed to return to the office and spend at least 40 hours a week toiling away at the corporate fort. It was Musk’s way, or the highway.
“Tesla has and will create and actually manufacture the most exciting and meaningful products of any company on Earth,” Musk wrote. “This will not happen by phoning it in.” SpaceX employees received a similar message, the Wall Street Journal reported.
SpaceX president and COO Gwynee Shotwell sings from the same management hymn book as Musk. When some SpaceX employees leaked to the media an internal petition they were circulating complaining about Musk’s leadership, here’s a portion of the memo Shotwell issued:
We solicit and expect our employees to report all concerns to their leadership,
senior management, HR, or Legal. But blanketing thousands of people across the
company with repeated unsolicited emails and asking them to sign letters and
fill out unsponsored surveys during the work day is not acceptable, goes
against our documented handbook policy, and does not show the strong judgement
needed to work in this very challenging space transportation sector. We
performed an investigation and have terminated a number of employees involved.
I am sorry for this distraction. Please stay focused on the SpaceX mission, and
use your time at work to do your best work. This is how we will get to Mars.
Tesla and SpaceX are the rare U.S. companies successfully engaged in truly transformational activities these days. One doesn’t need to spend tens of millions on McKinsey consultants to figure out that Musk’s and Shotwell’s secret sauce is decisive leadership coupled with unequivocal and consistent messaging.
GM CEO Mary Barra, who has repeatedly vowed that by mid-century she will sell more electric vehicles than industry leader Tesla, a week ago last Friday channeled her inner Elon Musk and instructed GM’s corporate employees working from home since the pandemic that they’d have to return to the office at least three days a week beginning this fall. Although Barra was considerably more verbose than Musk, her message was essentially the same.
The Detroit Free Press obtained a copy of Barra’s memo, which made the following argument:
“Over time, we have lost some of the important, intangible benefits of regularly working together in-person including, casual mentoring, more efficient communication and bringing an enterprise mindset to our work. We are entering a rapid launch cycle that, quite frankly, will define our future trajectory, and we need to drive change with speed — individually and collectively — so we can achieve our goals.”
GM’s employees were outraged that their CEO would have the audacity to insist they return to the office and quickly let their displeasure publicly known.
“General Motors is doomed,” one employee posted on a message board. Said another: “Upper management be like ‘Well Apple is going to 3 days!’. We don’t pay like Apple you fuckwits.”
The low pay lament was echoed by another employee: “So many people were already on the edge of leaving because of low pay and now this s—t,” the worker wrote, adding, “they will never retain young talent.”
Barra almost immediately caved, spewing out HR pablum by the Silverado truckload.
“We want to take the opportunity to address some of the questions, concerns, and misconceptions that we’ve heard. We acknowledge that the timing of the message, late on a Friday afternoon, was unfortunate. It was also unintentional,” Barra said in a follow up memo last Tuesday the Free Press also obtained.
“Our plan was always, and still is, to collaboratively design the solution that best balances the needs of the enterprise with the needs of each of you. The solution will include a more regular, in-person presence. However, determining how, when, and where teams will increase their in-person collaboration ultimately will be designed by the people leaders who know their organization best. We do not plan to mandate which days of the week will be collaborative days. In no scenario will our Work Appropriately evolution begin before Q1 2023.”
A CEO who issues an edict about the urgency of employees returning to the office and then immediately reverses herself because employees don’t like the directive can’t be taken seriously. Musk leads by example, which perhaps explains why his employees are more inclined to follow his edicts.
In 2018, when Tesla had missed two critical deadlines to manufacture 5,000 Model 3s a week, the Wall Street Journal reported that despite already having become a billionaire, Musk was spending days at a time at Tesla’s Freemont factory in the Bay area, sleeping on the floor underneath his desk with a white caseless pillow.
“We made a lot of mistakes. That’s why we’re here,” Musk told the Journal.
Indications are that Barra doesn’t maintain much of a presence among critical people responsible for GM’s electric vehicle development.
In this gushing profile of Barra last July, the Detroit Free Press observed that when GM’s CEO toured the company’s battery cell laboratory, several technicians looked up from their work “a bit awestruck at their guest.”
“I was nervous,” Nicole Ellison, supervisor of the team that runs the battery cell lab,” told the Free Press, noting it was the first time she’d met Barra. The Free Press said that Barra disarmed the R&D employees with “light conversation.”
It’s surprising that the supervisor of GM’s battery cell lab had never met Barra, and that they only engaged in “light conversation.” I would have expected Barra to make regular appearances at the R&D lab and that when she engaged in conversations with critical employees, it would involve seeking their views and insights.
In Ellison’s case, Barra might have asked her about the significance of the battery patent application GM filed in February on which Ellison’s name appears.
I’ve never seen it reported before that GM employees are paid comparatively lower wages, or at least believe that they are. If that’s the case, I imagine Barra’s compensation sticks in their craws.
Barra in 2021 was awarded $29 million in compensation, well above the average $18.5 million paid to America’s other overpaid CEOs. Barra’s ratio of total compensation to the median of all GM employees’ total compensation was 420-1. By comparison, the average S&P company’s CEO-to-worker pay ratio was 324-1.
If electric vehicles are GM’s future, last week was especially disastrous. The company was forced to recall and halt deliveries of its much-ballyhooed electric Cadillac Lyriq because of a software issue causing the vehicle’s 33-inch screen to go dark. The recall requires a dealership repair.
“The Lyriq’s extra-wide dash display contains both instrument panel and infotainment functions, so it’s kind of a big deal when it goes out,” the trade publication Jalopnick acknowledged. Although GM has only delivered 186 Lyriqs so far, 16 owners have already filed complaints with the National Highway Transportation Safety Commission.
Lyriq owners shouldn’t be surprised about the Lyriq’s software issues; Bloomberg writer Hannah Elliott noted in her July review of the SUV that the vehicle’s GPS and Navigation systems “aren’t quite ready for prime time.” It’s perhaps fortunate that Cadillac hasn’t yet delivered many Lyriqs because Elliott said the vehicle “is not worth waiting for.”
GM’s self-driving driving Cruise subsidiary has gotten a slew of bad publicity. Two of San Francisco’s top transit bosses last week submitted a scathing 39-page letter to the National Highway Traffic Safety Commission railing about Cruise’s myriad safety hazards and mounting traffic issue problems, including a June 3 crash that led to a recall of 80 of its vehicles. The transit bosses warned that if Cruise doesn’t quickly fix the issues with its vehicles it “could quickly exhaust emergency response resources and could undermine public confidence in all automated driving technology.”
Notably, in a LinkedIn post eight months ago, Barra declared that Cruise was “on the cusp of commercialization.”
Tesla on Sunday reported lower-than-expected vehicle deliveries, which it blamed on rising vehicle transportation costs. But some analysts believe that a weakening economy may have also impaired Tesla’s sales.
“The economy around the edges is still having a negative impact for Tesla that’s mostly logistical. But I think there is some demand (issues) sprinkled in there,” Wedbush Securities analyst Dan Ives told Reuters. “There is a dark cloud over the auto sector. And Tesla is not immune.”
If Tesla’s sales are weakening because of the economy, Barra’s electric vehicle ambitions could be derailed for years, if not forever. The company should be in crisis mode, requiring an all-hands-on deck mentality. Barra clearly can’t convince employees of that necessary mindset, so perhaps it’s time GM found a leader who’s capable of inspiring employees and investors.
When Barra became GM’s CEO on January 15, 2014, the company’s stock opened for trading at $39.63. It closed Friday at $32.09. For all Barra’s lofty talk about becoming a major EV player, employees and investors so far have yet to embrace her vision.