By on May 23, 2016

Tesla Model 3 Unveil, Image: Tesla Motors

The folks at United Auto Workers are eyeing Tesla’s production targets and making plans.

The electric automaker wants to manufacture 500,000 vehicles per year in 2018, and the union wants the workers behind those EVs in its fold, according to USA Today (via Left Lane News).

Though it hasn’t announced anything officially, UAW boss Dennis Williams recently expressed interest in unionizing Elon Musk’s California assembly plant employees.

“We’re watching that very closely,” UAW President Dennis Williams told USA Today, referring to the electric automaker’s lofty plans. “We just believe workers ought to have a voice in the workplace, and they ought to have collective bargaining rights.”

If production does hit half a million, that places Tesla in ninth place among automakers operating in the United States, ahead of Mercedes-Benz and BMW. The union already represents the big American automakers, but Tesla (and Musk) has so far avoided talking about the possibility.

Williams said he’s met with Musk before, but didn’t say when that occurred or whether they discussed unionization. He did call Musk a “very unique individual,” and said UAW isn’t approaching Tesla “in an adversarial way.”

Musk has bigger things on his mind than worrying about future collective bargaining battles and the potential for strikes. Tesla is ramping up to produce the $35,000 Model 3 sedan by late 2017 — a feat many say is unrealistic, given the logistics. Some 373,000 reservations are on the books for that model, with the Model S and Model X adding to the production tsunami.

The company plans to raise and spend about $2 billion this year to make sure enough capacity exists at its Fremont plant and its battery-producing Gigafactory.

According to one salary tracking site, employees at Tesla’s Fremont, California facility average $91,000 in gross income.

The company recently came under fire after a media investigation revealed that foreign workers hired by a subcontractor were paid $5 an hour and forced to work long hours in an unsafe manner.

Tesla said it would do right by all workers in the future, while Musk tweeted that the workers (mostly of Slovenian and Bosnian origin) were paid a full $55 an hour, putting the heat back onto the subcontractor.

[Image: Tesla Motors]

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53 Comments on “A Unionized Tesla? UAW Considering a Push for Musk’s Workers...”


  • avatar
    Big Al From 'Murica

    Let me get the popcorn out. Does the B&B side with Teala or the UAW? Some heads are about to explode.

  • avatar

    Unions will RUIN TESLA.

    And I’m not saying that because I’m a republican small business owner without a union…

    I’m saying it because

    • 0 avatar
      FreedMike

      Because you like to troll.

      I mean, you live in NYC, right?

      Do me a favor sometime…show up to a bar where the FDNY and NYPD guys hang out after work – you know, the bad, anti-American, commie pinkos who ran into the World Trade Center when it was burning – and talk that anti-union s**t. Let us know how you make out.

      • 0 avatar

        It sounds as if you are trying to get me to engage in argument with civil servants?

        • 0 avatar
          yamahog

          So you’re anti-union for businesses but civil service unions get the thumbs up?

          And you’re aware the that Bar and the American Medical Association are unions, right?

          • 0 avatar

            Let me make my position understood.

            AS LONG AS MY POCKETS ARE FILLED I REALLY DON’T CARE.

            Does that help?

          • 0 avatar
            healthy skeptic

            @yamahog

            Actually, you described my beliefs fairly well.

            I don’t think there’s a hard-and-fast rule for where unions are appropriate, but I do think they tend to make more sense in the public sector. If you’re a cop, for instance, you can’t just storm off and go to the competing police force down the block.

            In the private sector, there tends to be more choice, and more competition. There are sections of the private sector where I think they make sense too, but it really depends on a bunch of factors.

          • 0 avatar

            healthy skeptic

            The simple reason Unions are bad for public service is:

            #1 Government crowds out the private market. They have no profit/loss statements to worry about. They simply raise taxes to make up deficits.

            #2 Collective Bargaining for tax payer money.

            Union workers can simply vote for people PROMISING THEM HANDOUTS – at the expense of the tax payer.

            Government raises taxes on EVERYONE to put more in the hands of a few civil servants.

            The TSA head, Kelly Hogan, just resigned and was earning $180,000 + a $90,000 bonus. I rest my case.

  • avatar
    dukeisduke

    This is going to be hilarious.

  • avatar
    SCE to AUX

    Won’t happen, because Tesla’s workers are apparently not downtrodden.

    • 0 avatar
      indi500fan

      Anybody know what percentage of Tesla’s plant workers are former NUMMI UAW boys/girls? Just curious. Back when Honda opened up in Ohio, they wouldn’t even interview anyone who had previously been a UAW member.

      • 0 avatar
        28-Cars-Later

        I’m surprised they were able to get away with that.

        • 0 avatar
          bikegoesbaa

          I think they got away with it by not interviewing anybody with prior automotive manufacturing experience.

          This effectively excludes the UAW without explicitly discriminating against them.

      • 0 avatar
        golden2husky

        …Back when Honda opened up in Ohio, they wouldn’t even interview anyone who had previously been a UAW member…

        Why? Because they are union sympathizers? Workmanship? The vast majority of workmanship issues are management-driven.

        • 0 avatar
          mikey

          Exactly , management sets the standards. I have said this before, but it bears repeating . In a modern auto manufacturing facility, the individual worker, has little , to no impact , into final build quality.

          I’ll give Mr Musk the benefit of the doubt. If he wasn’t aware of the wages , and working conditions, he is now. If the plant expects to be getting near the production count that he is seeking, take a page from the Honda and Toyota play book. Pay a decent wage , and provide an acceptable work environment . The UAW will just go away.

          • 0 avatar
            tresmonos

            I agree mikey, with a caveat.

            Paint, body prep, fascia (and some trim) fitment – fit & finish can be very process dependent. But the same can be said: management sets the standards and management enforces adherence to the standard in a process related operation.

            You can write people up and reinforce accountability.

          • 0 avatar
            mikey

            Yes indeed , it’s been nearly 8 years since I set foot on the plant floor. At that time ,operator generated, poor workmanship , was subject to progressive discipline .

            In.todays world , of work cells , and team concept …”peer pressure ” alone can correct most operator related , quality issues.

    • 0 avatar
      Erikstrawn

      Yup. The #1 way to avoid unionization is to treat your employees like actually value them. If you only treat them like an expense, they sure will be.

      • 0 avatar
        tonycd

        Before the usual suspects hijack this whole discussion with the usual “evils of unionism” stuff, a fun fact: It’s been published elsewhere in the coverage of this story that Tesla routinely works its factory workers a week of five 12-hour days in a row, plus frequent weekends.

        Their unabashed explanation is that they spell this out before hiring, so if you’re not up for that, don’t take the job. Of course, given the shortage of decent-paying jobs nationwide, this is arguably a rather disingenuous stance. For my money, this sort of callous disregard for workers’ overall quality of life is exactly what unions exist to answer.

        • 0 avatar
          Pch101

          Tesla is just a startup, and it loses money. If there are too many work rules, then those could contribute to there being no work at all.

          • 0 avatar
            tonycd

            Pch, much as I respect you, I’m wary of these multi-billion dollar enterprises claiming year after year that they’re still just “startups losing money.”

            Jeff Bezos played this game skillfully for several years in a row, plowing all the profits back into the business and cooking the books so it looked like Amazon was perpetually operating at a loss. It kept Wall Street from pressuring him to keep elevating profits, and let him commit various monopolistic practices under the radar that are only now becoming obvious.

            To me, getting big and prosperous enough to employ hundreds of workers, and abusing (because that’s what it is) each of them by routinely stealing 1-1/2 days’ work for a day’s pay, is what’s been outlawed in every First World country on the planet for most of a century — and with good reason. If this is the only way you can succeed, you don’t deserve success.

          • 0 avatar
            Pch101

            Tesla isn’t “plowing profits back into the business.” There are no profits.

            Startups need to have some flexibility. Tesla is running on fumes as is. It’s being carried largely by its branding power, but it lacks the scale economies that it needs to operate in the black.

  • avatar
    dwford

    I love Elon Musk. He is one of the few public figures that is more than willing to call BS whenever someone challenges him. Most CEOs, when faced with the $5/hour charges would have shriveled up. Not musk, he pulls out his invoices and shoves the lie right in the accusers face.

    Same with the Tesla owners. Waaa my car crashed itself! Nope, Musk pulls the data log and shows the world that in reality they are just idiots that were showing off but didn’t know what they were doing.

    I’m looking forward to him tangling with the UAW. It always amazed me that unions are allowed to sneak around, lie to and intimidate the workers into joining the union, but companies have such severe restrictions on what they can say.

    • 0 avatar
      indi500fan

      How would have Musk’s invoices indicated what wage was paid to a contractor’s employees? Is this a “time and material” rather than a “fixed price” contract?

      • 0 avatar
        jpolicke

        He was likely billed for x-many bodies working y-number of hours times $55. Out of that number the agency pays the workers. I have never heard of the agency keeping 90%, though. Nor am I sure he bore the responsibility to verify that said workers were being treated by their actual employer according to law.

    • 0 avatar
      Erikstrawn

      “It always amazed me that unions are allowed to sneak around, lie to and intimidate the workers into joining the union, but companies have such severe restrictions on what they can say.” Unions are not allowed to sneak around, lie, nor intimidate, but some union people cheat the rules, just as a lot of companies cheat the rules. I worked in a union shop where during contract negotiations the company got a union steward to sell us out. He got a gravy job, moved up into management, and got fired six months later. The company got inside info on our union’s negotiating position. We got a smaller than normal cost of living raise and crappier insurance.

  • avatar
    anti121hero

    55$ an hour! Well where do I sign up

    • 0 avatar
      SunnyvaleCA

      $55/hour might not go as far as you would assume. Average house price in Fremont is just shy of $1 million. For a married couple, $67k annual income puts you in California’s 9.3% tax bracket. Sales tax is also north of 9%.

      I’m wondering how Musk will assemble cars in Fremont. $40/hour would go much further in South Carolina or Nevada (near the Gigafactory, for example) than $55/hour out here.

      • 0 avatar
        accord1999

        Tesla is supposedly looking for Production Assembly Associates at $17 per hour:

        http://electrek.co/2016/05/03/tesla-job-fair-production-workers/

      • 0 avatar
        IAhawkeye

        Holy hell, $1,000,000 for your average house?! Why do people live out there again?

        • 0 avatar
          SunnyvaleCA

          >>> Why do people live out there again? <<<

          Here are some options:
          * They bought houses long ago and are just holding on until retirement.
          * They earn way more than $55/hour.
          * They live 4-or-more-workers in a 2-bedroom rental house or apartment and plan to leave in a few years.
          * They live out in the desert and drive 50 miles to work.

          I could understand a low-volume Roadster or Model S being built in a boutique shop in Fremont, but mass-market production? Maybe Tesla intends an amazing amount of automation or something.

  • avatar
    05lgt

    If PDX port workers are an indication, joining a union that believes they’ll see as much income from closing you down and shifting the business go to other unionized groups who are a vast majority in the union is a bad idea for Freemont workers. Not everyone who tells you you’re valuable, pretty and underappreciated has your best interests at heart.

  • avatar
    laserwizard

    I’m all for the workers to get in middle of this ponzi scheme getting some of the cash before the company goes belly up.

  • avatar
    donatolla

    This will be interesting.

    Frankly, Unions are a product of a time when workers didn’t have a voice to stand up against the huge business they were working for. The kind of business (especially american auto) that will seemingly cut as many corners as possible. Employees just don’t have that disadvantage now. Everyone has a voice and a capability to speak out that doesn’t require the additional cost of a union to hold Tesla back. EVERYONE will listen to those voices too – the world media is waiting for any and all indication of problems at Tesla, so it’s in Musk’s best interests to ensure his employees are very well taken care of.

    PLUS, Musk has repeatedly looked at his company as one that’s taking a tech approach to auto – not the other way around. I suspect the UAW will be just as successful attempting to get into IBM as they would Tesla.

    • 0 avatar
      Xeranar

      Oh to live in the world you describe would be so sweet…but alas that is a mere fantasy.

    • 0 avatar
      tonycd

      donatella, this is indeed interesting:

      “Frankly, Unions are a product of a time when workers didn’t have a voice to stand up against the huge business they were working for. The kind of business (especially american auto) that will seemingly cut as many corners as possible. Employees just don’t have that disadvantage now. Everyone has a voice and a capability to speak out.”

      Then why, according to current and former Tesla workers, is Tesla telling every applicant for these jobs that if they’re not comfortable with the idea of routinely working 12-hour days plus weekends, just get your ass out and don’t even take the job? I guess they can speak out unless they need to make a living.

  • avatar
    mcs

    Looks like Tesla might have a bit of an insurance policy at some point:

    http://usa.chinadaily.com.cn/business/2016-05/20/content_25386843.htm

  • avatar
    shaker

    If Musk is treating his workers well enough, then he has no reason to fear that his workers would choose the UAW…

    Without unions, companies would face less pressure to provide a decent wage/benefit package…

    Catch 22 anyone?

    • 0 avatar
      golden2husky

      That is exactly right. The non union plants know that if they treat the workers well, there is no reason to unionize. However, should the union disappear, the companies will either cut wages or let them stagnate. That is for sure.

      • 0 avatar
        05lgt

        What’s the date I keep reading for the beginning of “real wage stagnation”? 197x? Gerald Ford’s stagflation never went away.

        • 0 avatar
          Xeranar

          Depending on who you listen to it’s 1970-74. I generally go with 1972 if I’m quoting something.

          It was the slow decline of manufacturing as income inequality grew and minimum wage stayed low. Had minimum wage kept up with either inflation or productivity we wouldn’t have this issue today. Wage floors are the most significant factors we have when it comes to tools to combat this issue.

          • 0 avatar
            shaker

            “Wage floors are the most significant factors we have when it comes to tools to combat this issue.”

            The most common complaint of those of a certain political leaning is that there’s too many people sponging off the government – well, a “living wage” would solve that problem.

            That said, prices for everything would be higher (businesses MUST satisfy shareholders) and the increased tax revenue would look like Christmas to corrupt politicians.

            This could start an inflationary spiral where those making the “new” minimum wage could still be priced out of buying the very goods/services that they produce, so they’d demand more money (and on and on).

            So, the bugaboo of “planning” comes into play, which to devout capitalists is tantamount to communism.

            Catch 22’s everywhere – we seem to be stuck between two extremes, and the middle and lower classes take the hit.

          • 0 avatar
            redav

            There was an interesting article that looked at min wage in comparison to local median wage. It noted that once the min wage gets over a certain percentage of the median, the local economy grinds to a halt. Examples within US territories were given.

            The theory seems to have merit. Min wage really doesn’t affect prices much because only ~4% of hourly workers earn min wage. Changes to min wage only affects the goods/services they provide. Thus, small changes have small effects. But big changes, such as if 25% of workers made min wage, more products must be affected. It also progressively limits the number of low wage earners that will be employed.

            Another interesting article pointed to “living wages” being arbitrary and informed by local standards of living. (The hyperbolic end of the argument is that half the world lives on <$10/day, and $20k/yr defines the top 10% of global earners. How then do they 'live' with so much less than a living wage?) If 'living' expectations are so informed, then the lowest earners will never make a living wage, regardless of min wage.

            I won't say the argument is convincing, but it seems to have a kernel of truth. We hear about average car prices being over $30k, but so what? 'Average' is irrelevant when discussing affordability. It should be: What are the prices of acceptable cars available? New midsize sedans are available in the low 20s. Quality used compact cars are available in the low teens.

            The example does not prove arbitrariness of what's needed to 'live,' but it does demonstrate misrepresentation. I would much rather have the discussion of what a minimum standard of living ought to be rather than throwing around wages in a vacuum.

          • 0 avatar
            Xeranar

            That argument only works shaker is all factors increase at the same rate. So assuming a car costs is 30% labor, 30% parts, and 20% overhead. That leaves you 20% profit. So your labor costs double (lets assume it’s minimum wage we’re working at). That means your cost for a car went up to 130% of the price. 30% of the parts now cost 30% more. So we’re at 139%. Then we’re at 20% overhead which shouldn’t move much if at all. Given that the overhead is mostly loans, taxes, and the various management. Finally we reach your ‘profit’ for shareholders. Assuming that money decreases at around 40% (since your car only costs 39% more). To keep the same margin it would increase only 8%. So at the end of the day wages rose 100%, cars rose 50%. That leaves 50% total gain.

            That’s why Big Macs in foreign countries with much higher wage floors don’t cost triple.

            PS: Increasing minimum wage to $15 would increase take home income a minimum of $800 a month. That would essentially put our poorest workers into homeownership in many places or atleast get them into car ownership…

          • 0 avatar
            28-Cars-Later

            Xer, long time no post.

          • 0 avatar
            Xeranar

            All of the grading this semester slowed me down so I went into seclusion for a time. I’m going back up to PA for a few weeks soon, that’ll be a great time to recharge.

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