Tesla acquired Grohmann Engineering, now coined Tesla Advanced Automation Germany (Image Credit: flickr via TC)

Tesla acquired Grohmann Engineering, now coined Tesla Advanced Automation Germany (Image Credit: flickr via TC)

Tesla Advanced Automation Germany has shifted its focus to only in-house, leaving obligatory contracts with BMW, VW, Daimler, and Bosch high and dry. Now, Tesla is working to facilitate viable solutions.

The response was understandably varied when the media learned that Tesla Advanced Automation Germany (formerly Grohmann Engineering) was cutting ties with its former business customers. Some felt that this is exactly what was expected to happen. What automaker works to help supply its competition, especially during a time when it needs all resources on hand? Others said that this decision by Tesla was a low blow to Grohmann's existing customers, and should have never happened.

The acquisition of Grohmann Engineering to form Tesla Advanced Automation was a key play in upcoming Tesla Model 3 production

The acquisition of Grohmann Engineering to form Tesla Advanced Automation was a key play in upcoming Tesla Model 3 production

We don't know for sure if Tesla went into the deal fully aware that the contracts would be immediately cancelled, or if it happened as a matter of necessity. Although German works councilor, Uwe Herzig, told a German newspaper (translated from German):

"The workload caused by new Tesla projects was so great, that it has only been working on Tesla projects for a few weeks."

Grohmann was a substantial supplier for Daimler, BMW, Volkswagen, and Bosch. Essentially, the company assured that those customers' plants were outfitted with the "machines that build the machines," as Tesla CEO Elon Musk would put it.

Tesla has made it clear that the newly acquired entity will focus all of its energies on work for the upcoming Model 3. To some, this was pretty cut and dry when the deal happened. However, German automakers don't feel the same way. Though, having a small U.S.-based electric car startup work for highly developed and successful German ICE vehicle manufacturers might suggest hell froze over, Tesla Advanced Automation is doing what it can to help assure that the competitors' contracts are fulfilled.

According to BMW and VW, the problem lies in the fact that Tesla never officially made them aware that the contracts were to be dropped. German union IG Metall, and the German works council are now involved, because the transition didn't go smoothly, as Tesla had previously promised. The Silicon Valley automaker already avoided a potential strike by raising wages, and the expectation is that Tesla will comply once again. A spokesperson for BMW explained:

"We assume that Grohmann fulfills its contractual obligations."

VW chimed in as well:

"Grohmann meets the existing contracts."

According to Electrek, Tesla recently produced a statement in regards to the demands of the German automakers.

“We have been in contact with every client for weeks on this issue and are on the way to finding individual solutions with each of them.”

Surprisingly, Daimler hasn't commented, and nothing has hit the press regarding Bosch.

Source: Wirtschaftswoche