Job Cuts Show Tesla’s Not That Different From Other Carmakers

(Bloomberg) -- Tesla Inc. prides itself on doing things differently than the major carmakers it’s trying to unseat: a loose interpretation of meeting targets, building autos in a tent and a chief executive officer who sleeps at the factory -- all fueled by a mission to make transport sustainable.

On Friday, the electric-car leader moved a bit closer to being the real car company CEO Elon Musk declared Tesla to be in July. He warned that “the road ahead is very difficult” in making battery cars price-competitive with their combustion-powered rivals. More than 3,000 jobs will go.

That type of move is more familiar at industry stalwarts like Ford Motor Co. and General Motors Co., which have laid off thousands of people over the decades spanning the ups and downs of a cyclical industries. They too are cutting jobs again, offset costly investments in electrified powertrains and self-driving car technology.

For Tesla, the challenge at hand is to prove it can profitably sell the mass-market Model 3 and broaden the appeal of battery cars beyond high-end customers. So far, the cheapest version of the vehicle set for a global rollout starting early this year currently starts at $44,000.

Auto industry layoffs

GMTo close plants and eliminate 14,000 jobs, though most hourly workers will be offered jobs elsewhere
FordCutting thousands of in Europe; Morgan Stanley estimated the company’s worldwide total reductions could reach 25,000
Jaguar To cut 4,500 jobs, most of them in the U.K.
Nissan 700 jobs will go at its Mississippi plant due to slower van and truck sales 

Tesla is also embarking on a new chapter in China, breaking ground on a $5 billion new factory this month amid the first decline in the world’s biggest auto market in two decades. The effort underscores the priority of cash generation amid a weaker market outlook, and mounting costs that have started to take their toll across the industry.

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