Tag Archives: SOCMED

Elon Musk says Twitter staff ‘error’ led to hiring Perkins Coie law firm

Jan 6 (Reuters) – Twitter Inc CEO Elon Musk said in an email to Reuters on Friday that hiring law firm Perkins Coie to defend the company in a California federal lawsuit this week was a mistake it would not make again.

Reuters reported earlier that lawyers from Perkins Coie entered court appearances for Twitter in the case on Wednesday even though Musk has denounced the firm on the social media platform, including in a tweet last month related to its past work for former Democratic U.S. presidential nominee Hillary Clinton.

Musk’s email said hiring Perkins Coie was “an error on the part of a member of the Twitter team.”

“Perkins will not be representing Twitter on future cases,” he said.

He did not immediately respond to follow-up questions on Friday, including whether Perkins Coie will stay on as counsel for Twitter in at least six other lawsuits predating Musk’s ownership. A Perkins Coie spokesperson did not immediately respond to a request for comment.

Musk’s finger-pointing follows months of internal tensions over Twitter’s legal staffing and priorities since he acquired the company for $44 billion and took over as CEO in October.

Musk has fired Vijaya Gadde, Twitter’s legal affairs and policy officer, and other senior employees as he seeks to undo what he has criticized as past censorship and partisan bias at the company.

Twitter has also shaken up its outside legal teams, with attorneys from Quinn Emanuel Urquhart & Sullivan stepping in for other firms in several cases.

Musk tweeted on Dec. 8 that Twitter “isn’t using Perkins Coie” as outside counsel and urged other companies to boycott the firm. He singled out a former Perkins Coie lawyer, Michael Sussmann, who advised Clinton’s 2016 presidential campaign while at the firm.

Sussmann was acquitted in May after denying federal charges that he falsely told the FBI he was not working on Clinton’s behalf when he gave the agency purported evidence of cyber links between the Trump Organization and a Russia-based bank.

“No company should use them until they make amends for Sussmann’s attempt to corrupt a Presidential election,” Musk wrote in December, referring to Perkins Coie.

In May, Musk tweeted that Perkins Coie and another large law firm were made up of “white-shoe lawyers” who “thrive on corruption.”

The case that Perkins Coie signed on to for Twitter this week was brought last year by Laura Loomer, a far-right activist who was banned from the site in 2018.

The San Francisco lawsuit claims social media giants, corporations and the U.S. government conspired to “unlawfully censor conservative voices and interfere with American elections.” Twitter and its former CEO Jack Dorsey have denied the claims.

Reporting by David Thomas in Chicago
Editing by David Bario and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

David Thomas

Thomson Reuters

David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.

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Tesla shares suffer New Year’s hangover on demand worries, delivery issues

  • Stock top S&P 500 loser on first trading day of 2023
  • Selloff knocks off $50 billion from market cap
  • Tesla misses Q4 vehicle deliveries estimate
  • EV company is still the world’s most valuable automaker

Jan 3 (Reuters) – Tesla Inc (TSLA.O) shares kicked off 2023 with a thud, plunging more than 12% on Tuesday on growing worries about weakening demand and logistical problems that have hampered deliveries for the world’s most valuable automaker.

Once worth more than $1 trillion, Tesla lost more than 65% in market value in a tumultuous 2022 that saw it increasingly challenged by other automakers and face production issues stemming from COVID lockdowns in China.

Tuesday’s slide knocked off nearly $50 billion in market value, roughly equal to the valuation of rival Ford Motor Co (F.N), which last year sold three times as many cars as Tesla.

The sell-off came after Tesla missed market expectations for fourth-quarter deliveries despite shipping a record number of vehicles.

Reuters Graphics

“Tesla, as it has grown is now entering a phase of still solid but slower growth,” Morningstar analyst Seth Goldstein said. Being a major auto producer, it “is likely to feel more of an impact from an economic slowdown”, he added.

Several Wall Street analysts said they expected more pressure on the stock in the coming months from increasing competition and weaker global demand.

Global automakers have in the past few months battled a demand downturn in China, the world’s top auto market where the spread of COVID-19 has hit economic growth and consumer spending. Tesla is offering hefty discounts there and a subsidy for insurance costs.

At least four brokerages cut their price targets and earnings estimates on Tuesday, pointing to the deliveries miss and Tesla’s decision to offer more incentives to boost demand in China and the United States, the two largest global auto markets.

The company’s stock was the worst performer on the benchmark S&P 500 index (.SPX) on Tuesday as it fell as low as $104.64 a share – the lowest since August 2020. More than 220 million shares exchanged hands during regular trading hours.

The electric-vehicle maker’s performance in 2022 was among the worst on the S&P 500 index.

Members of media and guests surround the Tesla Model Y and Model 3 during Thailand Tesla’s official launch event in Bangkok, Thailand, December 7, 2022. REUTERS/Athit Perawongmetha

“You have so many things working against the stock. One obviously is Musk’s involvement in Twitter,” said Dennis Dick, market structure analyst and trader at Triple D Trading.

Tesla’s market value has declined by about $370 billion since Chief Executive Elon Musk closed the deal to buy social media firm Twitter.

Some of that drop has come from his share sale to fund the $44 billion deal, while the stock also declined due to worries among investors that Musk has been distracted by the social media company.

At a value of about $341 billion, Tesla is still the world’s most valuable automaker, even though its production is a fraction of rivals such as Toyota Motor Corp (7203.T).

Tesla shares biggest loser among Big Tech Tesla shares biggest loser among Big Tech since April

Tesla delivered 405,278 vehicles in the fourth quarter, short of analysts’ estimates of 431,117. For all of 2022, its deliveries rose by 40%, missing Musk’s 50% annual target.

The result “came at the cost of higher incentives, suggesting lower pricing and margin,” brokerage J.P.Morgan said in a note, lowering its price target by $25 to $125.

The median price target of 41 analysts on the stock was $250, more than double the current price, according to Refinitiv data. The lowest price is $85, from Roth Capital Partners.

The shortfall highlighted the logistics hurdles facing the company which is known for its end-of-quarter delivery rush. The gap between production and deliveries has widened to 34,000 vehicles as more cars got stuck in transit.

The automaker plans to run a reduced production schedule in January at its Shanghai plant, extending the lowered output it began in December into 2023, Reuters reported.

Meanwhile, California-based electric vehicle maker Rivian Automotive Inc (RIVN.O) narrowly missed its 25,000-unit production target for 2022.

Reuters Graphics

Reporting by Aditya Soni, Eva Mathews and Akash Sriram in Bengaluru; Additional reporting by Amruta Khandekar; Editing by Tomasz Janowski, Shounak Dasgupta and Arun Koyyur

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Startups spring from ashes of Big Tech purge

  • Mass tech layoffs spawn new wave of startups
  • Early-stage VC funding at around record levels
  • Echoes of dotcom crash that fueled Facebook, others

Jan 3 (Reuters) – Nic Szerman lost his job at Meta Platforms (META.O) in November, just two months after joining full-time, falling victim to a sweeping 13% reduction of its workforce as the advertising market cratered.

Days later he was back working, seeking investment for his own company Nulink, a blockchain-based payment company, and sent pitches to startup accelerator Y Combinator and Andreessen Horowitz’s cryptocurrency fund.

“As counterintuitive as it may sound, this layoff left me in a really good position,” the 24-year-old said. “Because I don’t have to pay back the sign-on bonus, I get four months of pay, and now I have time to focus on my own project.”

Szerman is part of a wave of would-be entrepreneurs who are emerging from the ashes of the mass job losses seen in Silicon Valley in the second half of 2022, according to venture capitalists.

U.S. tech giants including Meta, Microsoft (MSFT.O), Twitter and Snap (SNAP.N) have purged more than 150,000 staff, according to Layoff.fyi, which tracks technology job losses.

While overall venture capital (VC) financing fell 33% globally to about $483 billion in 2022, early-stage funding was robust, with $37.4 billion raised in so-called angel or seed rounds, in line with the record level seen in 2021, according to data from research firm PitchBook.

Day One Ventures, an early stage venture fund in San Francisco, launched a new initiative in November to fund startups founded by people who had been laid off from their tech jobs, touting the slogan “Funded, not Fired”.

The program aims to cut 20 checks for $100,000 by the end of 2022. Day One said it had received over 1,000 applications, most of them from people who were cut loose by Meta, Stripe and Twitter.

“We’re investing $2 million in 20 companies – if we just find one unicorn it almost returns the fund, which I think is a really unique opportunity for us as fund managers,” said Masha Bucher, co-founder at Day One Ventures.

“Looking at the last economic cycle, companies like Stripe, Airbnb, Dropbox have been created in crisis.”

HOT: GAMING AND AI

Also in November, multi-stage fund Index Ventures, which has bankrolled Facebook, Etsy and Skype, launched its second Origins fund, which will invest $300 million in early-stage startups.

Silicon Valley investor U.S. Venture Partners and Austrian VC firm Speedinvest have meanwhile earmarked a similar amount for newly founded companies.

Investors highlighted gaming and artificial intelligence among hot areas of interest.

“With advances in game design, new innovations like cloud gaming, and the emergence of social networking in this sphere, gaming has really transcended into mainstream culture,” said Sofia Dolfe, partner at Index Ventures.

“In every period of economic uncertainty, there is opportunity – to reset, re-prioritize and re-focus energy and resources.”

DOTCOM BUBBLE 2.0

Szerman said his project was rejected by Y Combinator, while he hasn’t heard back from Andreessen Horowitz yet, though he added that other early-stage venture capitalists had expressed interest.

“I told the investors we’ll chat in two or three months,” he added. “I’ll focus on scaling the system now.”

Some investors compared the 2022 downturn to the dotcom crash of the early 2000s, when dozens of overvalued startups went bust, flooding the market with talent and helping to spark a wave of new companies such as Facebook and YouTube.

“Many great companies have been created in relatively dark times,” said Harry Nelis, partner at investment firm Accel, who sees a new generation of risk takers emerge among the swathe of people left unemployed.

Some industry players say former Big Tech employees are uniquely placed to start their own companies, having seen first-hand how some of the biggest firms in the world operate, and enjoying ongoing access to their network of highly skilled colleagues.

One former Googler has sought to help others like him looking for life after technology giants. In 2015, Christopher Fong, who spent almost a decade working for the tech titan in California, launched Xoogler, a project designed to help former employees hoping to start their own companies. Since then, the group’s membership has since swelled to more than 11,000.

Fong told Reuters that experience in Big Tech firm gave founders a “strong brand that can be leveraged to meet investors, potential customers, and recruit team members”.

(This story has been refiled to correct Harry Nelis’ designation to partner from managing partner in paragraph 19)

Reporting by Martin Coulter in London, Supantha Mukherjee in Stockholm and Krystal Hu in New York; Editing by Pravin Char

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Twitter back online after global outage hits thousands

Dec 28 (Reuters) – Twitter Inc suffered a major outage on Wednesday, leaving tens of thousands of users globally unable to access the popular social media platform or use its key features for several hours before services appeared to come back online.

The incident is the social media site’s first apparent widespread service disruption since billionaire Elon Musk took over Twitter as CEO in late October.

Downdetector, a website that tracks outages through a range of sources including user reports, showed more than 10,000 affected users from the United States, about 2,500 from Japan and about 2,500 from the UK at the peak of the disruption.

Most of the reports came from users stating they faced technical issues accessing the social network via web browser.

Reports of Twitter outages fell sharply by Wednesday evening, according to the website, with some users later commenting service had returned to normal.

Twitter did not immediately respond to a request for comment and the social network’s status page showed that all systems were operational.

Musk tweeted later on Wednesday that “Significant backend server architecture changes” had been rolled out and that “Twitter should feel faster”, but his post did not make any reference to the downtime reported by users.

During the outage, some users said they were unable to log in to their Twitter account via desktops or laptops. A smaller number of users said the issue also affected the mobile app and features including notifications.

Others took to Twitter to share updates and memes about the service disruption, with #TwitterDown trending as a hashtag on the social media site.

Some attempts to log in to Twitter from desktops prompted an error message saying: “Something went wrong, but don’t fret — it’s not your fault. Let’s try again.”

Musk tweeted he was still able to use the service.

“Works for me,” Musk posted, responding to a user who asked if Twitter was broken.

The outage comes two months after Musk completed his $44 billion takeover of Twitter, which has been marked by chaos and controversy.

Hundreds of Twitter employees quit the social media company in November, by some estimates, including engineers responsible for fixing bugs and preventing service outages.

Thousands of Twitter users were also hit by a global outages in February and July, before Musk’s takeover.

Other big technology companies have also been hit by outages this year. In July, a near 19-hour service outage at Canada’s biggest telecom operator Rogers Telecommunications shut banking, transport and government access for millions.

Reporting by Akriti Sharma, Mrinmay Dey and Shubhendu Deshmukh in Bengaluru; additional reporting by Josh Horwitz in Shanghai; Editing by Krishna Chandra Eluri and Sam Holmes

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Elon Musk says around 100 Starlinks now active in Iran

Dec 26 (Reuters) – SpaceX Chief Executive Elon Musk said on Monday that the company is now close to having 100 active Starlinks, the firm’s satellite internet service, in Iran, three months after he tweeted he would activate the service there amid protests around the Islamic country.

Musk said, “approaching 100 starlinks active in Iran”, in a tweet on Monday.

The billionaire had said in September that he would activate Starlink in Iran as part of a U.S.-backed effort “to advance internet freedom and the free flow of information” to Iranians.

The satellite-based broadband service could help Iranians circumvent the government’s restrictions on accessing the internet and certain social media platforms amid protests around the country.

The Islamic Republic has been engulfed in protests that erupted after the death in September of 22-year-old Mahsa Amini in police custody after being arrested by the morality police for wearing “unsuitable attire”.

Reporting by Akanksha Khushi in Bengaluru; Editing by Sandra Maler

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Iran reroutes plane carrying soccer star’s wife, blames UK over unrest

DUBAI, Dec 26 (Reuters) – Iranian authorities rerouted a flight bound for Dubai on Monday and prevented the wife and daughter of former national soccer team captain Ali Daei, who has supported anti-government protests, from leaving the country, state media reported.

Amid a concerted clampdown, Tehran also said the arrests in Iran of citizens linked to Britain reflected its “destructive role” in the more than three months of unrest.

People from across Iran’s social spectrum have joined one of the most sustained challenges to the country’s ruling theocracy since the 1979 Islamic Revolution, relying heavily on social media platforms – which the government is trying to shut down – to organise and spread news of demonstrations.

A service that could help Iranians circumvent internet restrictions is Starlink, a satellite-based broadband service operated by Elon Musk’s SpaceX.

Musk said on Monday that the company was getting close to having 100 active Starlink satellite receivers inside Iran.

Meanwhile Daei’s wife was banned from travelling abroad, Iran’s judiciary said, after authorities ordered the Mahan Air plane she had been a passenger in to land on Iran’s Kish Island in the Gulf.

“I really don’t know the reason for this. Did they want to arrest a terrorist?” Daei told semi-official news agency ISNA.

After he voiced support for the protests on social media, authorities this month shut down a jewellery shop and a restaurant he owned.

The protests were triggered by the Sept. 16 death in detention of Mahsa Amini, a 22-year-old Kurdish Iranian held for wearing “inappropriate attire” under Iran’s strict Islamic dress code for women.

Iran has accused Western countries, Israel and Saudi Arabia of fomenting the unrest, allegations accompanied by arrests of dozens of dual nationals, part of an official narrative designed to shift blame away from the Iranian leadership.

Asked by a reporter to comment on Sunday’s announcement of the arrest of seven people linked to Britain, Iran’s foreign ministry spokesperson Nasser Kanaani said: “Some countries, especially the one you mentioned, had an unconstructive role regarding the recent developments in Iran.

“Their role was totally destructive and incited the riots.”

The British foreign ministry had said it was seeking further information from Iranian authorities on the reported arrests.

Rights group HRANA says about 18,500 people have been arrested during the unrest. Government officials say most have been released.

Besides arrests, authorities have imposed travel bans on dozens of artists, lawyers, journalists and celebrities for endorsing the protests.

HRANA also said that as of Dec. 25, 507 protesters had been killed, including 69 minors, as well as 66 members of the security forces.

Iran’s troubled rial currency on Monday fell to a record low of 415,400 against the dollar, according to forex site Bonbast.com. It has lost about 24% of its value since the protests began, as Iranians grappling with official inflation of about 50% buy dollars and gold in an effort to protect their savings.

Reporting by Dubai newsroom, additional reporting by Akanksha Khushi in Bengaluru;
Editing by Mark Heinrich and John Stonestreet

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Twitter restores suicide prevention feature after Reuters report

NEW YORK, Dec 24 (Reuters) – Twitter Inc restored a feature that promoted suicide prevention hotlines and other safety resources to users looking up certain content, after coming under pressure from some users and consumer safety groups over its removal.

Reuters reported on Friday that the feature was taken down a few days ago, citing two people familiar with the matter, who said the removal was ordered by the social media platform’s owner Elon Musk.

After publication of the story, Twitter head of trust and safety Ella Irwin confirmed the removal and called it temporary. “We have been fixing and revamping our prompts. They were just temporarily removed while we do that,” Irwin said in an email to Reuters.

“We expect to have them back up next week,” she said.

About 15 hours after the initial report, Musk, who did not initially respond to requests for comment, tweeted “False, it is still there.” In response to criticism by Twitter users, he also tweeted “Twitter doesn’t prevent suicide.”

The feature, known as #ThereIsHelp, placed a banner at the top of search results for certain topics. It listed contacts for support organizations in many countries related to mental health, HIV, vaccines, child sexual exploitation, COVID-19, gender-based violence, natural disasters and freedom of expression.

Its elimination had led some consumer safety groups and Twitter users to express concerns about the well-being of vulnerable users of the platform.

In part due to pressure from consumer safety groups, internet services including Twitter, Alphabet’s Google (GOOGL.O) and Meta’s Facebook (META.O) have for years tried to direct users to well-known resource providers such as government hotlines when they suspect someone may be in danger of harming themselves or others.

In her email, Twitter’s Irwin said, “Google does really well with these in their search results and (we) are actually mirroring some of their approach with the changes we are making.”

She added, “We know these prompts are useful in many cases and just want to make sure they are functioning properly and continue to be relevant.”

Eirliani Abdul Rahman, who had been on a recently dissolved Twitter content advisory group, said the disappearance of #ThereIsHelp was “extremely disconcerting and profoundly disturbing.”

Even if it was only temporarily removed to make way for improvements, “normally you would be working on it in parallel, not removing it,” she said.

Reporting by Kenneth Li in New York, Sheila Dang in Dallas, Paresh Dave in Oakland, and Fanny Potkin in Singapore; Editing by Daniel Wallis

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Facebook parent Meta to settle Cambridge Analytica case for $725 million

Dec 23 (Reuters) – Facebook owner Meta Platforms Inc (META.O) has agreed to pay $725 million to resolve a class-action lawsuit accusing the social media giant of allowing third parties, including Cambridge Analytica, to access users’ personal information.

The proposed settlement, which was disclosed in a court filing late on Thursday, would resolve a long-running lawsuit prompted by revelations in 2018 that Facebook had allowed the British political consulting firm Cambridge Analytica to access data of as many as 87 million users.

Lawyers for the plaintiffs called the proposed settlement the largest to ever be achieved in a U.S. data privacy class action and the most that Meta has ever paid to resolve a class action lawsuit.

“This historic settlement will provide meaningful relief to the class in this complex and novel privacy case,” the lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a joint statement.

Meta did not admit wrongdoing as part of the settlement, which is subject to the approval of a federal judge in San Francisco. The company said in a statement settling was “in the best interest of our community and shareholders.”

“Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program,” Meta said.

Cambridge Analytica, now defunct, worked for Donald Trump’s successful presidential campaign in 2016, and gained access to the personal information from millions of Facebook accounts for the purposes of voter profiling and targeting.

Cambridge Analytica obtained that information without users’ consent from a researcher who had been allowed by Facebook to deploy an app on its social media network that harvested data from millions of its users.

The ensuing Cambridge Analytica scandal fueled government investigations into its privacy practices, lawsuits and a high-profile U.S. congressional hearing where Meta Chief Executive Mark Zuckerberg was grilled by lawmakers.

In 2019, Facebook agreed to pay $5 billion to resolve a Federal Trade Commission probe into its privacy practices and $100 million to settle U.S. Securities and Exchange Commission claims that it misled investors about the misuse of users’ data.

Investigations by state attorneys general are ongoing, and the company is fighting a lawsuit by the attorney general for Washington, D.C.

Thursday’s settlement resolved claims by Facebook users that the company violated various federal and state laws by letting app developers and business partners harvest their personal data without their consent on a widespread basis.

The users’ lawyers alleged that Facebook misled them into thinking they could keep control over personal data, when in fact it let thousands of preferred outsiders gain access.

Facebook argued its users have no legitimate privacy interest in information they shared with friends on social media. But U.S. District Judge Vince Chhabria called that view “so wrong” and in 2019 largely allowed the case to move forward.

Reporting by Nate Raymond in Boston; Editing by Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

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Facebook parent Meta to settle Cambridge Analytica scandal case for $725 mln

Dec 23 (Reuters) – Facebook owner Meta Platforms Inc (META.O) has agreed to pay $725 million to resolve a class-action lawsuit accusing the social media giant of allowing third parties, including Cambridge Analytica, to access users’ personal information.

The proposed settlement, which was disclosed in a court filing late on Thursday, would resolve a long-running lawsuit prompted by revelations in 2018 that Facebook had allowed the British political consulting firm Cambridge Analytica to access data of as many as 87 million users.

Lawyers for the plaintiffs called the proposed settlement the largest to ever be achieved in a U.S. data privacy class action and the most that Meta has ever paid to resolve a class action lawsuit.

“This historic settlement will provide meaningful relief to the class in this complex and novel privacy case,” the lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a joint statement.

Meta did not admit wrongdoing as part of the settlement, which is subject to the approval of a federal judge in San Francisco. The company said in a statement settling was “in the best interest of our community and shareholders.”

“Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program,” Meta said.

Cambridge Analytica, now defunct, worked for Donald Trump’s successful presidential campaign in 2016, and gained access to the personal information from millions of Facebook accounts for the purposes of voter profiling and targeting.

Cambridge Analytica obtained that information without users’ consent from a researcher who had been allowed by Facebook to deploy an app on its social media network that harvested data from millions of its users.

The ensuing Cambridge Analytica scandal fueled government investigations into its privacy practices, lawsuits and a high-profile U.S. congressional hearing where Meta Chief Executive Mark Zuckerberg was grilled by lawmakers.

In 2019, Facebook agreed to pay $5 billion to resolve a Federal Trade Commission probe into its privacy practices and $100 million to settle U.S. Securities and Exchange Commission claims that it misled investors about the misuse of users’ data.

Investigations by state attorneys general are ongoing, and the company is fighting a lawsuit by the attorney general for Washington, D.C.

Thursday’s settlement resolved claims by Facebook users that the company violated various federal and state laws by letting app developers and business partners harvest their personal data without their consent on a widespread basis.

The users’ lawyers alleged that Facebook misled them into thinking they could keep control over personal data, when in fact it let thousands of preferred outsiders gain access.

Facebook argued its users have no legitimate privacy interest in information they shared with friends on social media. But U.S. District Judge Vince Chhabria called that view “so wrong” and in 2019 largely allowed the case to move forward.

Reporting by Nate Raymond in Boston; Editing by Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

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Tesla sends Shanghai boss and aides to jumpstart U.S. output

SHANGHAI/SAN FRANCISCO, Dec 21 (Reuters) – Tesla Inc’s (TSLA.O) China chief Tom Zhu and a team of his reports has been brought in to troubleshoot production issues in the United States, fueling talk among colleagues he is being groomed for a bigger role at a time when Chief Executive Elon Musk has been distracted by Twitter.

Zhu, who heads Tesla’s Asia operations, has been traveling with a team including Shanghai gigafactory manager, Song Gang, to Tesla’s plants in California and Texas, and was there as recently as last week, according to two people with knowledge of the matter. Both asked not to be named because they were not authorized to speak to the media.

Tesla did not respond to written requests for comment from Reuters sent to its Shanghai and global media relations accounts. Musk did not respond to a Reuters’ email seeking comments for the story. Zhu and Song could not be reached for comment.

Under Zhu, Tesla Shanghai rebounded strongly from lockdowns this year to bring Tesla close to its growth target for 2022 of 50% production growth. Analysts expect output to fall short at closer to 45%, based on forecasts for the just-concluding fourth quarter.

Zhu and others made their first trip to the United States for Tesla this year in August, one of the people said, at a time when the company has some key management roles there unfilled.

Among the projects the Shanghai team have worked on is Tesla’s long-delayed Cybertruck, its next new model, a third person said.

Tesla’s Austin plant is ramping up production of the Model Y and readying the Cybertruck. The Fremont plant is preparing to launch a new version of the Model 3, which will start production in Shanghai next year, Reuters has reported.

Some Tesla investors and analysts have voiced concerns about Musk’s distraction following his acquisition of Twitter in October and the depth of the executive bench at the electric-car company.

Bloomberg reported this month that Zhu was helping to run the Austin plant. However, Zhu’s colleagues in Shanghai believe he is in line for a more senior and wider-ranging role at Tesla, the two people said.

A close aide to Zhu in Shanghai circulated a farewell poem for the China boss in recent weeks on social media, anticipating his new assignment, according to the message reviewed by Reuters.

SHANGHAI TEAM ON THE ROAD

At the Austin factory, Chinese engineers were seen by people at the plant working in the area reserved for development of the Cybertruck and batteries, a third person with knowledge of operations there said. Tesla has targeted production of the Cybertruck next year.

At Fremont California, Chinese staff have been working on Model Y underbody assemblies, according to another person with knowledge of their work there.

When Tesla posted a picture on Twitter on Friday to celebrate Austin hitting a new production milestone of 3,000 Model Ys in a week — still less than a third of the weekly output of Shanghai last quarter — Zhu was shown smiling with hundreds of people on the factory floor.

Zhu, who was born in China but now holds a New Zealand passport, is a no-fuss manager who favors Tesla-branded fleece jackets and lives in a government-subsidized apartment a 10-minute drive from the Shanghai Gigafactory, according to people who work with him and his comments to Chinese media.

When Musk sent a memo in early June warning he had a “super bad feeling” about the economy, Shanghai was on track to end the quarter down 36% from the quarter before because of COVID lockdowns, data released later showed.

With help from Shanghai officials, Zhu restarted operations by asking thousands of workers and suppliers to stay at the factory for more than six weeks. Zhu himself opted to stay longer, sleeping at the factory as Musk had in 2018 when Fremont was struggling to ramp production, two people with knowledge of the events told Reuters.

Shanghai, a complex that employs some 20,000 workers, came roaring back in the third quarter, with output of the Model Y and Model 3 up over 70% on the quarter.

Through September, Shanghai accounted for more than half of Tesla’s output.

The plant has excelled in applying cost-saving, factory-floor innovations for Tesla, including the use of massive casting machines to simplify production.

“The manufacturing people who led that push are obvious choices to spread the production gospel into the other new plants,” said Sam Fiorani, who tracks production trends Auto Forecast Solutions.

Tesla board member James Murdoch said last month the company had recently identified a potential successor to Musk without naming the person. Murdoch did not immediately respond to a request for comment.

Reuters has no evidence that Zhu is the possible candidate.

“With Elon Musk’s attention currently being pulled in a number of directions, finding someone to help guide Tesla is important, especially someone with the manufacturing know-how that Tom Zhu has,” Fiorani said.

Some investors are skeptical that Zhu alone could turn things around: “In America, doing business is very, very different than running a factory in China,” Ross Gerber, a Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management said on Twitter Spaces on Tuesday. “So I think Elon needs to be at Tesla.”

Reporting by Zhang Yan in Shanghai and Hyunjoo Jin in San Francisco; editing by Kevin Krolicki and Daniel Flynn

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