Musk Risks Turning Tesla Into Next Boeing

The Tesla Inc. board is doubling down on Elon Musk. With its chair denying a report that the electric car company was exploring other CEO possibilities, the board is sending a clear message: We’re in the Elon business.It’s a questionable move given one of directors’ core responsibilities: assessing risks. Right now Tesla is facing a host of them, including flagging sales, Musk’s Department of Government Efficiency hangover and, crucially, his plan to bet the company’s future on robotaxis. The biggest risk, however, is caused by Musk himself. After all, the worst-case scenario for a self-driving taxi fleet is a safety issue identified after the vehicles are on the road. In addition to potentially costing lives, any significant problem could scare people away from the Tesla brand. Musk’s leadership style makes that scenario a frighteningly plausible one.Across industries, safe companies have common characteristics. They encourage open disagreement, minimize hierarchy and make the welfare of employees and customers their North Star. They ensure that everyone who works there has psychological safety — that they feel free to express ideas, ask questions, admit mistakes and even disagree with superiors, all without fear. That’s a prerequisite for companies that want to ensure physical safety, because it empowers employees to point out risks missed by their bosses. Companies that deviate from this approach — as Boeing Co. did in recent years — are punished by both accidents and the market.Cynthia Carroll at Anglo American Plc and Paul O’Neill at Alcoa Corp. used culture to transform their companies’ approach to safety. Carroll took over a mining business that averaged 44 deaths a year and, over six years, brought that number down to 12. When she started, she said she found an environment of “bullying and fear” that had been shaped by apartheid South Africa. By doing everything from temporarily closing the company’s largest mine after an accident, to changing the criteria for compensation, to mandating that supervisors personally apologized to the family of anyone killed in their mines, Carroll transformed the company into one whose key values were “care and respect.”At aluminum producer Alcoa, O’Neill was so focused on safety that after his first speech as CEO an audience member said, “the board put a crazy hippie in charge and he’s going to kill the company.” O’Neill sent a staff memo urging employees to raise any safety concerns with their supervisors and, if they weren’t heeded, to contact him directly. He even shared his home phone number. The result: the rate of workdays lost to injuries dropped by more than 80%, even as the company’s stock price jumped from $7 per share in April 1987, when O’Neill began as CEO, to $67 at the end of 1999, when he stepped down.Boeing went in the opposite direction. Once so heralded for safety that pilots would quip “if it’s not Boeing, I’m not going,” the aircraft maker’s engineering-dominated and safety-obsessed approach faded after its purchase of McDonnell Douglas, replaced by an all-consuming quest to maximize shareholder returns. Its culture was sacrificed to cut costs and whistleblowers were punished, destroying the psychological safety and reputation that had taken generations to build. It took two 737 Max crashes and 346 deaths for the company to begin to repair the damage. When it comes to safety, Musk often says the right things. In 2013, he emailed the company that “anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company … you can talk to me … you should consider yourself obligated to do so until the right thing happens.” In October 2021, he sent a memo to all Tesla managers, giving those who receive “explicit directions” from him three options. The first was “Email me back to explain why what I said was incorrect. Sometimes I’m just plain wrong!” This is exactly what psychological safety requires. There are few ideas more important for a leader to express than “Sometimes I’m just plain wrong.”Unfortunately, Musk’s actions don’t always appear to align with his words. In 2014, Tesla engineer Cristina Balan says she went to him with concerns about the safety of the Model S’s floormats and the quality of its suppliers. According to Balan, she was told that if she did not resign, members of her team who were waiting on their green cards would be deported. (Tesla has said that Balan was using company resources on a “secret project”; she is suing for defamation.) Over the years, multiple employees have accused the company of firing them for flagging safety concerns or for criticizing Musk.So, Tesla’s safety culture likely leaves a great deal to be desired. And if a problem does arise, Musk himself has ensured that the company can’t rely on regulators as a backstop. The DOGE job cuts at the National Highway Traffic Safety Administration have been concentrated among “staff assessing self-driving risks,” reports Ars Technica. This is reminiscent of what happened with Boeing, which reportedly used its influence with the federal government to weaken FAA oversight of the company.Few CEOs in history are as tolerant of bet-the-company risks as Musk, who has, in his own assessment, steered Tesla through “many a crisis.” Here, however, the call is coming from inside the house; it’s Musk’s approach to leadership that is sowing the seeds for Tesla’s next crisis — one that could affect the entire industry. If he doesn’t want to follow Boeing’s example, becoming the latest powerhouse American manufacturer undone by its own mistakes, he needs to realize that being bold doesn’t have to mean playing fast and loose on safety..Disclaimer: The views expressed here are those of the author and do not necessarily represent the views of NDTV Profit or its editorial team. .Tesla Hikes Canadian Prices And Pushes Its Pre-Tariff Inventory

Musk Risks Turning Tesla Into Next Boeing

Unfortunately, Musk’s actions don’t always appear to align with his words.

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