Klaus Grohmann Tesla on Crash Course with Carmakers

Electric carmaker Tesla is headed towards a conflict with German carmakers over automotive supplier Grohmann Engineering, reports business weekly WirtschaftsWoche.
With its Model S, Tesla has encroached on the home turf of its biggest rivals, century-old giants like BMW and Daimler.

Tesla, already stepping on labor union toes in Germany, is now taking the street fight to the German carmakers by canceling production on orders filed with Tesla Grohmann Automation to make its newly acquired subsidiary focus on its own production.

Last fall, luxury electric carmaker Tesla acquired German automotive supplier Grohmann, whose most important customers have traditionally been Volkswagen, BMW and Daimler. The company has since been renamed Tesla Grohmann Automation.

According to WirtschaftsWoche, a sister publication of Handelsblatt, Tesla Grohmann has canceled the work for its German customers without informing them. "The workload due to new Tesla projects was so heavy, that for a few weeks now, work is only being done on Tesla projects," said Uwe Herzig, head of Grohmann’s workers’ council.

Tesla confirmed to WirtschaftsWoche that “most external work is being canceled” and “a quick and smooth transition of current customers to other suppliers is planned.” The company wants to focus on its new Model 3 in the coming months.

Around 400,000 Tesla Model 3s have already been pre-ordered, and the company has plans to ambitiously increase production capacity from 84,000 to 500,000 next year.

The end of collaboration with German automakers, however, will be anything but a “smooth transition.” According to BMW and VW, Tesla hasn’t even seen the need to inform them about the premature contract cancellations yet.

The company's headquarters in Wolfsburg and Munich are therefore still expecting deliveries from Grohmann. “We assume that Grohmann will fulfill its contractual obligations,” said a BMW spokesman. Volkswagen is insisting that “Grohmann adhere to existing contracts.” Daimler declined to comment.

Meanwhile, Tesla is expecting Grohmann to "grow significantly over time" despite the focus on internal orders,  a company spokeswoman told WirtschaftsWoche.

But Tesla Grohmann Automation is experiencing difficulties finding new employees, according to information obtained by WirtschaftsWoche. “There have been various job advertisements and use is being made of headhunters,” says Mr. Herzig from the workers’ council, “but apparently to no avail.”