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FADA: Dealerships see 10% reduction in jobs with migrant workers leaving due to pandemic

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NEW DELHI: The automobile distribution industry has seen a 10% decline in manpower owing to skilled workers going back to their villages following the outbreak of Covid-19, according to the Federation of Automobile Dealers’ Association (FADA).

Demand is slowly returning to normalcy but there is a shortage of skilled labour in the market, said Vinkesh Gulati, who took charge as the president of FADA last week. “There have not been layoffs. But the migrant workers who went back to their villages have not returned. There is a shortage of skilled workers involved in sales and accounting, among others,” he said.

The automotive retail sector used to employ about 4 million people, directly and indirectly, before the pandemic.

Gulati said he expects the momentum to improve during the festive season in October and November. The onset of the festive period with Onam in Kerala and Ganesh Chaturthi in Maharashtra has been “reasonably good”, with both states seeing demand pull from customers, he said, while vehicle sales in northern India are expected to pick up after the end of the ‘Shradh’ period in September. With dealers restocking in anticipation of better sales in the festive season, wholesale sales volume of passenger vehicles increased 20% year-on-year in August.

“With a spike in Covid-19 cases, we cannot say things are normal. Even now a lot of people are working from home, not moving out much. But there is latent demand in the market; consumers want personal mobility solutions. In one or two months, we expect more purchases to take place,” said Gulati.

Meanwhile, dealerships have rationalised working capital, manpower and infrastructure costs to sustain operations as the Covid-induced lockdown is being eased. “All dealers learnt to downsize and improve productivity to sustain operations. We have been able to manage operations viably by bringing down expenses by 40%,” said Gulati. Wholesale demand for automobiles recorded its steepest decline of 75% year-on-year to 1.49 million units in the first quarter of 2020-21.

Gulati said he does not expect an immediate relief from the government in terms of a cut in goods and services tax (GST) on vehicles. FADA instead has urged the government for early implementation of an incentive-based scrappage policy to boost demand. Additionally, the association has requested the government to bring auto dealerships in the purview of MSME (Micro, Small and Medium Enterprises).

Gulati said the federation would continue to work to increase dealer margins, among the lowest in the world, for betterment of the fraternity. One of the focus areas would be to start work on the introduction of the dealer franchise regulation, which will govern the relationship between a supplier and the retailer.

“It will solve issues which arise when auto companies exit business or terminate the dealer agreements. Cases like General Motors and Volkswagen’s MAN Trucks exiting the Indian market were difficult for their respective dealers. Even the recent UM Lohia case is still stuck. These issues of disparity between individual dealers and manufacturers occur mainly because we do not have a legal outlet and dealer agreements are lopsided,” said Gulati.

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Tesla sues former employee for allegedly stealing software code

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Vehicles pass the Tesla Inc. assembly plant in Fremont, California, U.S., on Monday, May 11, 2020.

David Paul Morris | Bloomberg | Getty Images

Tesla is suing a former employee and software engineer named Alex Khatilov, alleging trade secret theft and breach of contract.

In the complaint, the company accuses Khatilov of grabbing code and files from WARP Drive, a back-end software system that Tesla developed to automate a range of business processes involved in manufacturing and selling its cars. They also accuse him of deleting possible evidence when security teams confronted him.

Khatilov was hired to help Tesla’s Quality Assurance team create software that could automate tasks or business processes related to Environment, Health and Safety.

The complaint says he began working for Tesla on December 28, 2020, and almost immediately began uploading files and scripts (written in a programming language called Python) to his Dropbox account. Tesla confronted him about his alleged theft on January 6th.

The code is of concern to Tesla because it could reveal to competitors “which systems Tesla believes are important and valuable to automate and how to automate them – providing a roadmap to copy Tesla’s innovation,” the complaint says.

This isn’t the first time that Tesla has sued or accused ex-employees of trade theft. Tesla sued Guangzhi Cao for copying Autopilot source code to his personal accounts and devices in late 2018. That case is still ongoing.

The company also sued former employees who wound up at other electric and autonomous vehicle businesses, Rivian and Zoox, over alleged theft of intellectual property.

Tesla revealed in the new complaint on Friday that only 40 people of about 50,000 total employees work on the company’s Quality Assurance team that hired Khatilov. The company also says it has spent an estimated “200 man-years of work” to develop the code in question.

The case is here:


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Tesla engineering director Joseph Mardall leaves for Zipline

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Low-angle view of the facade of Tesla Motors dealership with logo and sign in Pleasanton, California, July 23, 2018. (Photo by Smith Collection/Gado/Getty Images)

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An influential engineering director at Tesla, Joe Mardall, has resigned his position at the automaker to become head of engineering at Zipline, according to his own LinkedIn profile.

Zipline is a drone maker and aerial delivery service focused on distribution of blood and other medical supplies.

Among his achievements during a decade at Tesla, Mardall led the development of a Model Y Heat Pump system, which was praised by CEO Elon Musk on Twitter, and led Tesla’s efforts to engineer a ventilator for Covid sufferers that could be produced using car parts. (It never produced the ventilators.)

Before he was involved in engineering Tesla’s latest crossover SUV, the Model Y, Mardall also developed thermal and HVAC technologies which became defining features in the company’s earlier Model X and Model 3 vehicles. His name is on multiple Tesla patents.

According to Forge, a secondary marketplace, Zipline in currently raising a Series E round of funding with shares priced around $32.63, indicating a valuation north of $2 billion.

Mardall wrote in a public post on LinkedIn:

After 10 wonderful years at Tesla, I’m super excited to start my next chapter as Head of Engineering at Zipline, working with a team of talented and committed engineers to provide every human on Earth with instant access to vital medical supplies. The next 5 years are going to change everything and I can’t wait! We are hiring for all roles across engineering and I would love to hear from you – come fly with me!”

Mardall did not immediately respond to a request for comment from CNBC.

Nominations are open for the 2021 CNBC Disruptor 50, a list of private start-ups using breakthrough technology to become the next generation of great public companies. Submit by Friday, Feb. 12, at 3 pm EST.


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Tesla job openings for Semi truck production lines in Nevada

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Tesla CEO Elon Musk shows off the Tesla Semi as he unveils the company’s new electric semi truck during a presentation in Hawthorne, California, U.S., November 16, 2017.

Alexandria Sage | Reuters

Recent job listings show that Tesla is moving ahead with its long-delayed plans for its electric Semi truck, an initiative it first unveiled in 2017.

Three current job listings call for employees to work on “Semi-Truck production lines” in Sparks, Nevada. That’s where Tesla already makes batteries for its electric vehicles, in partnership with Panasonic.

Tesla announced the Semi in November 2017, and said at the time that it would deliver the trucks to customers in about two years. At that time, the company said it would sell a 300-mile range version of the Semi for $150,000, and a 500-mile range version for $180,000, and that the trucks would go from 0-60 miles per hour in 5 seconds without cargo, or 0-60 in 20 seconds with an 80,000 pound load.

After taking reservations for the trucks from companies such as Anheuser-Busch, DHL Group, PepsiCo, Pride Group and Walmart, Tesla announced Semi production delays during a third-quarter earnings call in 2019, and again in April 2020.

In June 2020, Musk sent an e-mail to all employees at Tesla that called for “volume production” of the Semi.

“It’s time to go all out and bring the Tesla Semi to volume production. It’s been in limited production so far, which has allowed us to improve many aspects of the design.” Musk also said in that memo, “Production of the battery and powertrain would take place at Giga Nevada, with most of the other work probably occurring in other states.”

But in the company’s third-quarter 2020 financial filing, Tesla only mentioned its Semi initiative twice, saying it was “in development,” and noting U.S. locations for Semi production were yet to be determined.

More recently, in an interview at the European Conference on Batteries November 24, 2020, Musk boasted that Tesla was aiming for a Semi that could go even further on a single charge than originally promised, saying “You could take the range, for long-range trucking, easily up to 800 kilometers and we see a path over time to get to 1,000 kilometer range with a heavy duty truck.”

The company has a few prototype Semi trucks that have been in operation for over a year. But Musk has not disclosed when full-fledged production of the Semi, or longer range batteries for it, could begin.

Today, Tesla is taking $20,000 refundable reservations to order a Semi. (It initially required $5,000 per reservation.) The base price for a 300-mile range version is listed at $150,000, and for a 500-mile range at $180,000. Prospective customers can also order a “Founders Series” Semi for $200,000.

Meanwhile, Daimler is in small-scale production with its heavy duty eCascadia electric trucks in the U.S., and Quebec-based Lion Electric has plans for a SPAC, a new U.S. factory, and has inked a deal to deliver up to 2,500 battery-powered electric trucks to Amazon over the next five years.

Investors will likely press Tesla for details on the status of its Semi program on its Q4 2020 earnings call on Jan. 27.

Tesla did not immediately respond to a request for comment.


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