Tesla names board director to replace Musk amid controversy
Toshiba to slash 7,000 jobs, profit projection
JAPAN’S engineering giant Toshiba announced plans on Thursday to slash 7,000 jobs and liquidate a unit building a UK nuclear power plant, leaving its fate in doubt.
Toshiba also expects to scrap or consolidate some factories and reduce its subsidiaries by 25 per cent – announcing the withdrawal from a US-based liquid natural gas business.
The liquidation of NuGen, a nuclear subsidiary in Britain, could complicate UK efforts to shift away from polluting power plants that rely on coal, a number of which are slated to close.
“After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project and has resolved to take steps to wind up NuGen,” Toshiba said in a statement.
The NuGen project in Cumbria in northwest England was to comprise three reactors and was due to start producing energy from 2025.
Toshiba CEO Nobuaki Kurumatani told reporters in Tokyo the decision was reached after “sincere discussions” with the British government.
A spokesman for Britain’s business ministry said Toshiba’s decision would not sidetrack the government’s decision to push ahead with nuclear expansion, including at another plant at Hinkley Point.
“This government remains committed to new nuclear through the Industrial Strategy Nuclear Sector Deal as well as consenting the first new nuclear power station in a generation at Hinkley Point C,” the spokesman said.
The 7,000 jobs will be cut over five years, many coming from early or planned retirement.
For the year to March next year, the firm said it expected a net profit of 920 billion yen ($8.1 billion), down from an earlier projection of 1.07 trillion yen.
Annual operating profit outlook is now 60 billion yen, down from a previous 70 billion yen forecast, while the sales estimates were kept at 3.6 trillion yen.
Still, the firm’s share price soared, closing up more than 12 per cent on the Tokyo stock exchange, mainly due to the announcement of a share buyback programme.
To stay afloat, the cashstrapped group sold its lucrative chip business for $21 billion to K K Pangea, a special-purpose company controlled by a consortium led by US investor Bain Capital.
ELECTRIC car pioneer Tesla on Thursday named an Australian telecoms executive to chair its board of directors, after the controversial Elon Musk was forced by US authorities to step back from the role.
The appointment of Robyn Denholm, chief financial officer with Telstra and already a Tesla board member, is effective immediately but she will serve out her six-month notice period with the Australian company, Tesla said in a statement.
Musk had to resign as Tesla chairman under a September arrangement with US regulators to settle fraud charges stemming from a tweet in which he said he planned to take the firm private and had financing to do it.
Under that settlement he and Tesla each had to pay a $20 million fine but Musk was allowed to stay on as chief executive.
He will help ease the 55-year-old Denholm’s transition, Tesla said.
“To ensure a smooth transition during the remainder of Robyn’s time at Telstra, Elon will be a resource to her and provide any support that she requests in her role as chair,” the electric car maker said.
Musk praised Denholm’s input in her time on Tesla’s board.
“Robyn has extensive experience in both the tech and auto industries, and she has made significant contributions as a Tesla board member over the past four years in helping us become a profitable company,” he said in the Tesla statement.
“I look forward to working even more closely with Robyn as we continue accelerating the advent of sustainable energy,” Musk added.
Denholm said: “I believe i n t his company, I believe in its mission and I look for ward to helping Elon and the Tesla team achieve sustainable profitabilit y and drive long-term shareholder va lue.”
Musk was forced to resign as chairman after the US Securities and Exchange Commission charged him with securities fraud, alleging that he misled investors when he tweeted on August 7 that he had “funding secured” to delist Tesla at $420 a share, a substantial premium over its share price at the time.
‘Subject of controversy’
The tweet was one of a number of issues that raised questions about the billionaire entrepreneur’s aptness to lead Tesla.
Days after settling with the SEC, Musk mocked the agency, in another tweet that labelled the agency the “Shortseller Enrichment Commission”.
That alluded to shortsellers, investors who have bet that Tesla shares will fall and who are frequently the subject of Musk’s derision.
The tycoon was the subject of controversy when he smoked a joint during a September podcast interview in California and discussed the end of the universe.
Denholm has been chief financial officer and head of strategy at Telstra, Australia’s former telephone monopoly, since the start of October.
For 18 months prior to that she was Telstra’s chief operations officer, and previously held senior roles at networking equipment company Juniper Networks.
Telstra chief executive Andy Penn said: “We are sorry to see Robyn leave Telstra. We know that it has become increasingly difficult to balance her responsibilities as Telstra CFO with the increased activity of the Tesla board.”
In premarket trade on the Nasdaq exchange on Thursday, Tesla’s share price was up 0.24 per cent at $349.00.
On October 24, Tesla reported a “historic” profitable quarter driven by demand for its Model 3 car aimed at the mass market. But the company remains burdened by billions in debt.