Elon Musk’s companies – Tesla and SpaceX – struggled in 2008. The tech entrepreneur has talked about it at various public events, for example, in 2018, he told an audience at the South by South West (SXSW) conference that both companies almost went bankrupt in 2008. Now, an old footage from the year has been shared on social media, revealing the the high-tension discussion between the Tesla executives where a visibly stressed Musk issued an ultimatum to his team: save the company at all costs, or get out.The video showed Colette Niazmand, Tesla marketing executive, telling Musk that people found faults with the Tesla Roadster and the company realised that the car “had substandard parts”. Musk, who became angry by that point, said, “It’s not okay to be a part of this company. If somebody can’t get happy, get divorced.”
The remark captured the height of the Tesla Roadster’s production crisis. At the time, Musk himself was undergoing a divorce from his first wife, Justine Musk. According to a 2018 report from BBC, Musk was borrowing money from friends just to pay his rent.
The ‘Pedal to the Metal’ crisis
The footage reveals Musk’s ‘frightening’ realisation as he surveyed an ‘army’ of rejected cars. “Holy Mackerel, Jesus,” Musk said after seeing a fleet of cars in what looked like a huge godown. “Yeah, like, we have like an army of cars here. Like, Jesus. This is frightening.” With only four deliverable vehicles for the sales team, the pressure was existential. Internal memos warned that if the Roadster couldn’t sustain the company by March 2009, Tesla would be “screwed.”“What’s going on here is the team has been doing a little bit of rework today. I got a message last week that if Roadster can’t sustain the company by March, then…That’s it. And that scares me,” one of the executives told Musk. “We need to get the company to cash flow positive in six to nine months. Well, we’re screwed. It’s really pedal to metal here. Each month it passes literally costs us tens of millions of dollars,” Musk replied to the crises situation.Niazmand then added insult to injury by revealing, “It wasn’t until Zach and Doreen family found the faults that we then realized that we had substandard parts on those cars, which quite frankly pissed me off.”Musk replied by saying, “I want names named. so if someone’s always on the hide seat and is always the root cause for problems, they will not be a part of this organisation for long term. It’s not okay to be a part of this company. If somebody can’t get happy, get divorced.”
Elon Musk talks about the ‘Skin of Their Teeth’ era
In 2018, Musk was facing a total wipeout and gave his companies very little chance to survive. While Tesla was burning through cash and had a backlog of defective cars, SpaceX had seen three consecutive rocket launch failures.“I gave both SpaceX and Tesla a probability of less than 10% likely to succeed. SpaceX is alive by the skin of its teeth, and so is Tesla—if things had just gone a little differently, both companies would be dead,” Musk later recalled.
