In August 2007, Martin Eberhard was in Los Angeles to give a talk at a luncheon put on by the Motor Press Guild, the trade group for publications that cover cars.
At that time, he was the CEO of Tesla Motors, and he was getting to be a big deal in the auto industry.
“Eberhard will discuss the business case for starting Tesla Motors and the viability of the electric car today and in the future,” a press release for the event glowed. “He will also reveal plans for the launch of the company’s high-performance, all-electric sports car, the Tesla Roadster.”
Then Eberhard got a call from Elon Musk, Tesla’s chairman of the board and primary investor.
Musk sounded nervous.
He had some bad news for Eberhard: Michael Marks, an early Tesla investor, would be taking over as chief executive.
The Tesla board had held a meeting without him, Eberhard told Business Insider, and decided that it was time for him to step down.
“There was no discussion,” Eberhard said. “I didn’t get to hear what they said. I didn’t get to defend myself. I felt totally stranded.”
Eberhard had an uncle who was a lawyer, so he asked his advice. After realising that the board meeting violated the company’s bylaws, he asked that they have another meeting via conference call so he could actually leave his position.
On August 8, 2007, Eberhard resigned from the CEO position and took on a new title, President of Technology.
Marks became the interim CEO.
“I never figured out what was said about me to those people,” Eberhard said.
Though he was still on staff with Tesla, Eberhard was moved off of almost every responsibility, save for troubleshooting and a handful of peripheral issues.
Now an employee, he was effectively shut out of the company he founded.
Mike Harrigan, who served as VP of marketing for Tesla at the time, told Business Insider that it was classic Musk.
“[Musk] is the kind of boss where day to day you don’t know if you have a job or not,” he said.
“Once he’s convinced that you can’t do the job, there’s no way you can convince him back again,” Harrigan added. “That happened many times to many people, and that’s what happened with Martin. Once he determined that Martin couldn’t be the CEO of Tesla any longer, that was it. He was fired.”
This story is taken from “The Making Of Tesla: Invention, Betrayal, And The Birth Of The Roadster,” an original Business Insider investigative feature.
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