By on May 16, 2016

Tesla Model 3 Prototype on road, Image: Tesla Motors

In a bid to get the Model 3 out the door on time, ideally without the snafus that plagued the Model X, Tesla Motors has hired a longtime Audi executive to serve as vice-president of vehicle production.

The hiring of 22-year Audi veteran Peter Hochholdinger, first reported by Reuters, comes as Tesla ramps up its manufacturing capacity to handle the 400,000 reservations placed on its upcoming $35,000 sedan.

Amid the company’s all-out dash to bring its Fremont, California factory’s production capacity to 500,000 vehicles per year by 2018, a damning report just released by the Bay Area News Group sheds light on the low-cost foreign labor helping to build that capability.

The report details a group of Slovenian and Croatian laborers brought into the U.S. on business visas to help build the Fremont factory’s new paint shop last year.

The workers, one of whom sustained a serious injury in a fall at the Tesla paint shop, were among many eastern European men hired by overseas contractors to work in the U.S., despite having few qualifications. The group at the Tesla plant worked up to 10 hours a day, six days a week, and received compensation to the tune of $5 an hour.

Neither Tesla nor the contractor have accepted responsibility for the practice, which critics say violates labor and visa laws. Local trades groups aren’t happy about the jobs going to the imported workers.

Because the hiring and compensation occurred through a private contractor, the automaker absolved itself of blame for the working conditions, telling the media group, “Tesla expects all its contractors and their subs … to comply with all applicable pay laws.”

While the foreign labor issue is one that impacts many companies, not just Tesla, the automaker’s focus remains on bringing the Model 3 to market in big numbers by late 2017.

After the botched roll-out of the Model X SUV due to supplier issues, Tesla purged Greg Reichow, the company’s former vice-president of production, and Josh Ensign, vice-president of manufacturing, from its ranks.

Hochholdinger’s job is to boost production of existing models while creating a cost-conscious manufacturing program for the Model 3.

Putting all of the pieces together in a timely fashion is key. Founder and CEO Elon Musk already announced on Twitter that tardy buyers might have to wait until 2019 to see delivery of their Model 3.

[Image: Tesla Motors]

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51 Comments on “Tesla Hires Former Audi Exec to Oversee Production as Report Slams Imported Labor at Fremont Factory...”


  • avatar
    DeadWeight

    “The workers, one of whom sustained a serious injury in a fall at the Tesla paint ship, were among many eastern European men hired by overseas contractors to work in the U.S., despite having few qualifications. The group at the Tesla plant worked up to 10 hours a day, six days a week, and received compensation to the tune of $5 an hour.”

    Elon Musk, the hero of all social justice-driven & environmentally pure people, we salute you!

    • 0 avatar
      SCE to AUX

      Yeah, except he didn’t hire them.

      • 0 avatar
        DeadWeight

        He hired the H1-B mills that did.

        Isn’t Musk, ny his own lofty, self-broadcasted (frequently) standards better than this?

        Will he now guarantee that the use of anything even nearly as exploitative as $5 per hour foreign laborers won’t be utilized in any part of the Tesla business?

        • 0 avatar
          brenschluss

          What kind of due diligence is typical when hiring a building contractor for a project of this scale, to ensure they aren’t importing their labor? I’ve honestly never seen this question asked.

          • 0 avatar
            DeadWeight

            It depends on many factors, including, but not limited to, whether the building is a federal, state, county or private building, whether it is for profit or not for profit, FHA/HUD funding, etc.

            There are so many regulatory issues governing this that any large scale construction company will have to have a compliance department and/or compliance experts on call to ensure that they don’t run afoul of the law.

          • 0 avatar
            morbo

            @realDonaldTrump been using that trick since the 80s. He brought in a bunch of underpaid Polish and eastern European laborers to build Trump Plaza.

            Sunrise, Sunset. The rich suck at basic humanity. Best to either become rich yourself or hoard food and bullets for the coming Tribulations.

          • 0 avatar
            tresmonos

            brenschluss,
            Tesla is using the same paint contractor my plant used to build a new paint shop. In our case, trades labor was regulated by the state, and local unions.

          • 0 avatar
            sgeffe

            I work as a local-government Systems Analyst, and I’ve seen the bidding process first-hand! Those things are created by the pound, and are Byzantine in the requirements, every jot and tiddle needing to be exactly right! Many a contractor or vendor has lost AN EXISTING CONTRACT because they missed a line on a form, or literally got caught in traffic and missed a submission deadline, or forgot to attend a pre-bid conference!

    • 0 avatar
      stuki

      Musk’s personal morals aside, Tesla will never, ever, in a million years, be a first rate automaker if it relies on “seasonal” laborers hired solely for their willingness to work for anyone else on the planet.

      Cars are complex enough that everyone performing work on them, have an impact on the quality of the final product. It takes years to put together a labor pool able to compete with the best in the industry, and more years to make that bench deep enough to allow new hires to be trained without affecting quality.

      The accuracy-in-reporting standards of the average Bay Area SJW trustafarian hobby labor organizer, is in general several notches below pure random, so who knows if there is anything to this. But if it is, it won’t take long before the whole game of slapping a big Ipad on a card house and selling it “batteries included”, is decisively up.

      • 0 avatar
        stuki

        Sorry about the above comment.

        I may have been a bit quick on the draw.

        It looks like the issue is not Tesla workers, but just guys brought in to build the paint shop. If so, my comment above is pretty meaningless.

  • avatar
    zip89105

    Still, the sheep will continue to purchase government subsidized Tesla’s.

    • 0 avatar
      VoGo

      But first, those sheep will learn when to use an apostrophe.

      • 0 avatar
        TrailerTrash

        vogo

        Now see..this is damned mean spirited.

        At least try to make a comment that isn’t so snippity smug and has something to add.

        This is, IMO, a pretty sneaky and poor practice by both Tesla and its contractor(s).

        Where ARE all the greenies, who I presume are also social justice warriors as well.

        • 0 avatar
          stuki

          “Where ARE all the greenies, who I presume are also social justice warriors as well.”

          Salivating at the thought of a famous guy putting them in the spotlight for a minute?

          • 0 avatar
            VoGo

            I would think that if you were confident in the value of your beliefs, you wouldn’t need to be so insulting.

    • 0 avatar
      SCE to AUX

      Don’t forget the subsidized cars from Nissan, Ford, BMW, VW, Mercedes, GM, Fiat, Audi, Hyundai, Kia, Toyota, etc.

      http://insideevs.com/monthly-plug-in-sales-scorecard/

      Tesla is only 27% of the EV volume to date, but they are the most fun to pick on.

  • avatar
    JimInRadfordVA

    Jeez DW, even you should be above this kind of cheap shot. That is, unless, you believe that Musk is personally hiring sub-contract labor and setting the pay scale at criminally low levels.

  • avatar
    FOG

    And California will look the other way because they are struggling to keep people in the state.

    • 0 avatar
      28-Cars-Later

      Struggling? But what about all of the Kalifornication?

    • 0 avatar
      Luke42

      “And California will look the other way because they are struggling to keep people in the state.”

      LOL, no.

      Have you checked land prices in The Bay Area lately? So many people want to live there that you can easily pay $3k/more for a studio apartment. That’s supply and demand (rent control doesn’t do much in the long run).

      I get calls every couple of months invitinge to move there for a six figure salary. Alas, a six figure salary doesn’t go very far there, because of the bidding wars on real estate. Those calls aren’t coming because people are fleeing the state, it’s because Silicon Valley businesses are growing and they need moar engineers.

      BTW, one of the surprising things about California real estate is that buyers put in offers s above the asking price, rather than haggle it down (as they do in the most of the nation). Again, its because The Bay Area is a desirable place to live. Its a desirable place to live, because there are a lot of jobs there. There are lot of jobs there, because business is good. There are lots of businesses and jobs in California because it’s a great place to start a business.

      California has LOTS of problems, but the Fox News and conservative talk radio narrative on what those problems are is WAY off.

      (There are lots of things to criticize about California, but understanding what they are requires more knowledge, education, and critical thinking than the average pundit is willing to endure.)

  • avatar
    SCE to AUX

    “Because the hiring and compensation occurred through a private contractor, the automaker absolved itself of blame for the working conditions, telling the media group, ‘Tesla expects all its contractors and their subs … to comply with all applicable pay laws.\'”

    This is how it works.

    Do you check the credentials and pay stubs of the workers installing the new roof on your house? Didn’t think so.

  • avatar

    After driving the model X, I have to say: both the S and X are amazing products.

    Hope the 3 will be as well

  • avatar
    dukeisduke

    “The workers, one of whom sustained a serious injury in a fall at the Tesla paint ship…”

    They paint their cars on a ship? Well, there you go. Unless the sea is pretty calm, and it’s a large ship, motion from waves could be a problem.

    /

  • avatar
    28-Cars-Later

    How can you employ people below the state mandated minimum wage outside of maybe some kind of special trading zone?

    • 0 avatar
      DeadWeight

      This is what computer/IT and medical staffing (in home nursing, etc.) firms do; they hire scalper recruiters who do the dirty work of hiring Indian, Philippine, Thai, etc. H1-B and other “specific skill” employees and then the ultimate recipient company of these peoples’ labor can turn a blind eye to all as they pay a wage that’s 3x to 6x that which the worker received, with the recruiting firm receiving the difference.

      • 0 avatar
        28-Cars-Later

        Ah so the minimum is being paid by the employer but the foreign recipient isn’t receiving it due to partial confiscation by a third part recruiter? Why would an employer participate, what is the benefit to them if they are paying the state mandated wage?

  • avatar
    bikegoesbaa

    Dear TTAC,

    Please do not adopt the current fashion for using “slams” or “blasts” in headlines. It is lame and very often misleading.

    xoxo,

    Everybody

    ——-

    Or is this just a placeholder until we go full-on trash news and start up with headlines like “Report slams Fremont labor, here’s what happened next…”?

  • avatar
    carlisimo

    It’s the current trend in the tech industry here in the Bay Area (which Tesla is spiritually closer to, in terms of who they hire). Uber and AirBnB absolve themselves of responsibility for anyone in their umbrella by calling them independent contractors. Apple squeezes its suppliers and wonders why they go as far as they do to save costs. Outsourcing is the easy way out of everything!

  • avatar
    mtmmo

    Rarely do I agree with every comment a single poster makes on one article but in this case DeadWeight is 100% spot-on. This Nov I’ll probably pinch my nose and vote Trump and yes I’m a D. Given the current environment I’m not sure that means much b/c I know a couple of R’s that are voting for H and several D’s who are going Trump. Bottom line both parties need to severally reign in the importation of overseas workers.

    • 0 avatar
      DeadWeight

      More and more people are joiningg my realism/truth/call-a-spade-a-spade/time-for-a-real-revolution movement with each passing day, where the incubators will soon no longer chock full of future, purposefully-kept-ignorant debt serfs whose energy is to be harvested for the benefit of an exceedingly select few (who manipulate the levers of the corruption machine they so finely crafted & now control -since the 1950s as of the latest cycle).

      My future has no need, want or use for any Trump, Clintons, Sanders, William Kristol (especially him), or any other captured “representative” or wannabe “representative,” however.

      • 0 avatar
        28-Cars-Later

        COSTANZA: Reality tour?
        SEINFELD: The last thing this guy’s qualified to give a tour of is reality.

      • 0 avatar
        runs_on_h8raide

        Amen DW. Amen. Did you know the “Kristol” family traces its roots straight to the communist movement all the way back to the Bolshevik Revolution…just like most tribe members that run everything these days. Yes…I went there and it cannot be refuted.

        • 0 avatar
          DeadWeight

          The Establishment, left and right (an illusion, and false paradigm of “choice,” at that), really are pure scumbags, and it’s not just a populist screed to finally call them out as self-interested backers and cheerleaders for the broken & rotten status quo that is killing (economically and in literal terms) so many Americans.

    • 0 avatar
      SCE to AUX

      “…reign in the importation of overseas workers”

      1. Because we all like to pay more for products and services. No need to shop around anymore; just look for the Stars and Stripes logo on your next purchase!

      2. Because America is now the Land of Selective Opportunity, in which you get to choose who receives such opportunity. Preferably whitish-looking people for whom English is a first language.

      • 0 avatar
        28-Cars-Later

        What’s funny is how difficult they make it to leave the prison but have no issue letting new inmates in en masse.

        • 0 avatar
          VoGo

          At some point, I’d love for someone to explain to me why it is that a country at full employment is so angry about imported labor. I know the anger is common: I just don’t understand it.

          I’d really like to meet all the US natives who are desperate to work at minimum wage, but are pushed out of the workforce by foreigners.

          • 0 avatar
            28-Cars-Later

            You’re much too intelligent to ask such trolling rhetorical questions.

          • 0 avatar
            VoGo

            I really am not that smart. All I see is opportunity in the job market, but all the support for both Sanders and Trump tells me I am missing an important issue for tens of millions of Americans.

            I get the wage stagnation and I get the income inequality. But the resentment against immigrants and imported labor doing work that you can’t do for a wage you wouldn’t take? That I don’t get.

          • 0 avatar
            28-Cars-Later

            The market has been chasing lower wages here and across the world since the fall of the Soviet Union/Warsaw Pact. James Goldsmith pointed out in a 1994 interview the cost at the time to employ workers in Vietnam was 47:1, and those workers were not unionized and did not demand special concessions as workers did here in the US. So the multinationals set up shop there in other places which was allowed by trade treaties like NAFTA and GATT. So over a twenty year period, US jobs were exported by US companies through treaties negotiated by the Federal government.

            Flash forward twenty years, actual US citizens are mostly in some form of debt, they cannot afford to work for a minimum wage in many cases. What they need are median range full time positions paying benefits, which mostly don’t exist. Third worlders through H1-Bs are generally not in debt, and even a minimum wage is a step up from the sh*tholes many of them come from, thus the crappy “jobs created” in the US are given to foreigners. Moving forward, many minimum wage jobs will be phased out in favor of automation which has already begun to occur. Whether H1-Bs and illegals choose to stay or return to their homes remains to be seen.

            This situation is untenable both in the US but on a global scale, not even to mention the massive amounts of government debt in nearly every First and Second World nation. When the music stops, I know for one, I’d like to have as few of foreign nationals stateside as possible but the reverse seems to be occurring.

            If there was any hope at all of stemming the tide several things need to happen in my view: the federal budget must begin to shrink including SS, SSDI, and MC. Taxes on labor, which impact small business, must be lessened. The education cartel must shrink 1/3rd and unlimited federal loans must cease. The number of able bodied but unemployed must shrink, and the prison system must be overhauled extensively. I read recently the EU is going to enforce visa travel for the US (but not Turkey because they are suicidal) so if this happens, the US needs to follow suit. The Justice department must actually prosecute criminals and its former members be prosecuted for crimes. Borders have to be respected and while I think building a wall is a stupid idea, beheading smugglers is the cheap and effective way to go because that’s who is guiding the invaders. Making a back door peace with the cartels is probably not a poor idea either.

          • 0 avatar
            VoGo

            28CL,
            I appreciate the detailed response. I get that returns for equity have exceeded returns from labor as labor pools have opened up globally (e.g., China) as well as at home (African-Americans, women).

            That’s unfortunate, but will reverse, as soon as we’ve exhausted all the labor globally, although that may take a couple more decades.

            But we truly live in free country where the opportunity exists for anyone to work harder, to get more education and/or start a business.

            Limiting immigration won’t change that. It will only rob us of the dynamism that made America America.

            I know it’s easy to point fingers at people who are different, but that doesn’t make it right. And it doesn’t make it effective.

            The policy positions you take look like a grab bag of Reaganism mixed with populist notions. Most of them are old ideas that have been proven untrue by sad experience.

            We need new thinking.

      • 0 avatar
        mtmmo

        “Preferably whitish-looking people for whom English is a first language.”
        Ironically I’m not even a Caucasian but one thing is crystal clear. You’re a racist.

        • 0 avatar
          Kenmore

          He’s mocking the infidels..err..racists.

        • 0 avatar
          SCE to AUX

          Kenmore got it, and so now I hope you understand my comment better.

          I don’t believe in unbridled immigration, but cracking down on imported workers will inevitably lead to distasteful approaches and accusations such as the one I wrote.

          If these workers were in the US legally, why would we want to keep them out?

        • 0 avatar
          sgeffe

          The major difference is that today’s immigrants have much less interest in assimilation into the American culture. Thus, “press ‘1’ for English, ‘2’ habla Espanõl.” And in the case of some, they want to literally destroy America: witness San Bernadino last year! (And 9/11, arguably.)

          My Mother’s family came here to live the American Dream! And yet, there are people who figuratively stomp on their grave (and the graves of others like them), and a fair percentage of the populace sees nothing wrong with that!

  • avatar
    mcs

    Here’s Tesla’s response:

    https://www.teslamotors.com/blog/response-mercury-news-article-hidden-workforce-expanding-teslas-factory

  • avatar
    mcs

    Looking through Eisenmann’s press releases, it looks like they’ve been hired by a number of auto companies. I see Volvo, Mercedes, VW, BMW, and FCA. Probably others. So, if you’re gonna bitch about Tesla hiring this company, it’s probably safe to say the same thing has happened at these other auto manufacturers as well.

    • 0 avatar
      orenwolf

      Like the inflated “slams” headline, it’s more fun to pretend this is a tesla-only problem, not that this is a supplier used by *five* other major car companies, because of course none of *them* would support this sort of labour.

      Suppliers and contractors lie. When you race everyone to the bottom by searching for the lowest bidder (in order to offer the lowest prices possible while keeping your margins high for the shareholders), corners are inevitably cut to make those rates.

      People think the fair trade, etc. movements are just trehuggers. Many are. But many people also realize that if you want a product or service that’s ethically produced or carried out, a *big* help in that regard is to remove the price pressure.

      The problem, of course, is that greed still gets in the way – companies can charge more to be “made in USA”, for example, and still treat their workers as cattle. One hopes it’s more difficult to do so. But as this article shows, there are loopholes even for US companies providing services such as these, and many major companies are blindly accepting their work, because they *appear* to be ticking the correct legal boxes in the process.

  • avatar
    Big Al From 'Murica

    So why are we importing auto workers? These visa programs exist for trades which there isn’t a pool of skilled workers in the country to hire from. Last time I checked we had a few unemployed auto workers. Of course they get paid more than minimum wage. So it isn’t a case of “there is nobody to do the job”, but rather a case of “We don’t want to pay what the US market has decided an auto worker is worth”.

    The pendulem swings back and forth and these sort of shenanigans are what leads to union shops. Also, substitute “Tesla” with “Trump” in this article and me thinks many of the voices that are OK with this would be crying foul.

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