Managment (and Philosophy) Shake up at Tesla

Word today that Tesla Motors is replacing CEO Martin Eberhardt with early stage investor Michael Marks. Marks is currently with leveraged buyout specialists KKR, but prior to that was the CEO of global electronics services provider Flextronics. (FLEX).

A large part of Telsa's success to this point has been in carving out the a design niche that separates their roadster from the nebbish EVs of the past. It's been positioned as a high performance sports car that just happens to run on electricity (don't kid your self that anyone buying this car is doing so to save the environment: this is a "I-got-one-before-you-did" toy.")

With the installation of Marks as CEO, Telsa is, in effect, saying that style is nice, but now it's time to get down to brass tacks. Consider the interview that Marks gave to BusinessWeek a little over two years ago:

"Design no longer is a competitive advantage. Design is a commodity. Yet design in big companies is just as inefficient as manufacturing and supply-chain management used to be. So brand companies might as well buy the designs for their products off the shelf."

So it looks like Tesla's priorities are changing. The approach to the business will apparently be much more rigorous in terms of outsourcing design and manufacturing. Marks certainly has the chops to make this happen: Flextronics grew from a $93 million company in 1993 to a $14.5 billion company in 2004. He undoubtedly has the connections to make this transition effective.

Oh, I'm sure there will be some grumbling that a bit of the company's 'soul' gets demoted along with Eberhardt, but this would appear to be a necessary step in the long term viavblity of the nascent car maker.