Tesla replaces top lawyer after two months
Veteran Dane Butswinkas returns to a law firm, while company insider takes his place
Tesla Inc. is losing its general counsel two months after hiring him, replacing the veteran trial lawyer with a longtime insider who helped the electric car company navigate some of its biggest legal issues.
Dane Butswinkas is leaving Tesla to return to his law firm Williams & Connolly, where he had spent almost 30 years before being named as the auto maker’s general counsel in December, the company confirmed on Wednesday.
Mr. Butswinkas said in a statement he looks forward to returning to Washington to continue his work with Tesla in an outside counsel role, as in the past. People familiar with the matter said he found that Tesla wasn’t the right cultural fit.
Jonathan Chang will become Tesla’s new top lawyer, rising from his role as vice president of legal. The 40-year-old has been at Tesla almost eight years, playing an instrumental role in the auto maker’s efforts to raise money, guide the purchase of SolarCity Corp. and battle franchise auto dealers that have tried to block direct sales of Tesla’s vehicles to customers.
Mr. Butswinkas’s exit marks another high-profile executive departure for the company during the past two years, as Tesla has labored to turn the Model 3 into its first mass-market electric car. After struggling last year to boost production of the compact sedan and conserve cash, Tesla is having trouble servicing them while it attempts to become consistently profitable.
More than 50 senior executives have left the Palo Alto, Calif., company in the past two years, including heads of sales, engineering, human resources and communications. Last month, Tesla announced it was replacing its
retiring CFO, Deepak Ahuja, with 34-year-old Zach Kirkhorn.
Mr. Butswinkas’s swift departure is reminiscent of another quick exit. In September, Tesla’s accounting chief, Dave Morton, left the company after only a few weeks, citing the intense pressure and scrutiny of the company.
Tesla’s legal department had seen turnover before the arrival in 2013 of Todd Maron, who took over as general counsel in 2014. He had previously worked as Tesla CEO Elon Musk’s divorce lawyer and helped build out the company’s legal department. The company went through three general counsels from 2009 to 2012, including one who stayed for less than four months.
Mr. Maron announced he was leaving the company in December, a few months after Mr. Musk settled with the U.S. Securities and
Exchange Commission over claims he misled investors with the surprise announcement that he had arranged funding for a take-private deal. Mr. Musk’s settlement included agreeing to a fine and stepping down as chairman.
Mr. Chang came to Tesla from Lithium Technologies where he was general counsel, according to his LinkedIn biography. Prior, he worked as a lawyer at Latham & Watkins, where he began advising Tesla in 2006 as outside counsel.
He earned a law degree and M.B.A. from the University of Southern California. He grew up in Fremont, Calif., where Tesla’s factory is located.
One of Mr. Chang’s early tests came during the 2012 presidential campaign. Republican nominee Mitt Romney criticized the Obama administration’s loans to
renewable energy companies, calling Tesla a loser.
Tesla had received $452 million in federal loans in 2010, one of five car makers to receive money from the Energy Department’s Advanced Technology Vehicles Manufacturing loan program that was launched under President George W. Bush and expanded by President Barack Obama.
The company decided it needed to repay the loans early in an effort to move past the political criticism, said Phil Rothenberg, who was a lawyer at Tesla at the time. Its bankers told the company the market was receptive to raising money, so it rushed to negotiate a deal to repay the government and go to market with the debt and equity offering, he said.
“Jonathan Chang was one of the key people negotiating with the
Energy Department because we had no general counsel,” Mr. Rothenberg said. “He worked literally all night.”
Tesla repaid the loans in May 2013.
Phuong Phillips, former deputy general counsel at SolarCity, said she witnessed Mr. Chang’s style up close, as the two companies negotiated the merger in 2016. The merger was controversial among some investors because Mr. Musk was also chairman and majority shareholder at SolarCity.
“What he would do was listen, offer his suggestion, then basically persuade you into believing that his idea was yours,” Ms. Phillips said of Mr. Chang. “So at the end of the day he got what he wanted, but he did it in such a lovely, kind manner that no one thought less of him.”