In the wake of firing its CEO and a huge hit to its share price, autonomous trucking developer TuSimple said it expects to permanently fill the top spot quickly and press ahead with its commercialization strategy.
“We’re already actively recruiting,” TuSimple Chairman Brad Buss told analysts on the company’s third-quarter earnings call Tuesday. “The key is there’s not a big disagreement on strategy. That’s the biggest thing that sends companies sideways. We’re very aligned. So it’s really just getting a couple of people in place and away we go.”
TuSimple said after sending co-founder Xiaodi Hou packing on Sunday that it had hired Russell Reynolds Associates to conduct an executive search.
It might not have to look far. Former CEO Cheng Lu, an architect of the strategy to which Buss referred, is technically still a TuSimple adviser. He presumably could ease back into the CEO role of which Hou abruptly relieved him in March.
“We’re hoping to have things wrapped up very quickly,” said Buss, who also serves on the boards of QuantumScape, Marvell Technology Inc. and others. Buss served as a Tesla Inc. board member from 2009 to 2019.
Lu declined comment to FreightWaves.
TuSimple shares stage mild recovery after brutal sell-off
TuSimple shares were flat midday after opening 10% higher and recovering some of Monday’s huge losses when the stock closed down nearly 46%.
Meanwhile, a nasty public spat between the board’s four independent directors and Hou, a Ph.D. who co-founded TuSimple in 2015, continued.
Hou wrote on LinkedIn Monday that he acted with complete integrity.
“Unfortunately, the Board’s processes and conclusions have been questionable at best,” Hou wrote. “As the facts come to light, I am confident that my decisions as CEO and Chairman, and our vision for TuSimple, will be vindicated. I want to be clear that I fundamentally deny any suggestions of wrongdoing.”
Buss criticized Hou for taking to social media to plead his case that his firing without cause was unjust.
“He is not authorized to make any statements on behalf of the company and we are disappointed in his lack of judgment and decision-making in making these unauthorized statements,” Buss said.
Hou was fired without cause because the bar to a “for cause” firing carries “fairly high standards of materiality.”
Another shoe to drop in TuSimple internal investigation?
Buss hinted that more action could result from the ongoing board investigation.
“The board and the management team take the responsibilities of our CFIUS [Committee on Foreign Investment in the U.S.] agreement very seriously,” he said. “That includes protecting the data that is at the heart of this company and there will be accountability for anyone who breaches this trust.”
In a Securities and Exchange Commission filing Monday, the company said TuSimple employees had worked for Hydron Inc., a China-backed hydrogen fuel cell truck startup founded by Mo Chen, TuSimple’s other co-founder and a former CEO and executive chairman.
The work performed as TuSimple considered a manufacturing partnership with Hydron amounted to less than $300,000 but significant enough to make an SEC disclosure.
TuSimple also said Hydron received TuSimple intellectual property without a nondisclosure agreement. The board was unaware of this until it opened its investigation in July. An NDA is now in place.
No update on sale of China business
Ersin Yumer, the executive vice president of operations serving as interim CEO and president, told analysts he had nothing new to report on TuSimple’s possible sale of its China business, which could add up to $1 billion to TuSimple’s balance sheet, which stood at a positive $1.07 billion at the end of Q3.
“The change is not going to impact any of the decisions that we have in process,” Buss added.