By on February 27, 2017

Elon Musk ice cream

With his employees showing a growing interest in unionization, Tesla CEO Elon Musk shot off a lengthy email to staff urging them to forgo joining the United Auto Workers. While the UAW has romanced Tesla’s growing workforce for years, a recent — and highly publicized — blog post written by an employee expressed renewed concern over the company’s treatment of its workforce, as well as his hope to see them join the labor federation.

Musk initially reached out to the press to defend his company and is now appealing to workers directly, refuting allegations about subpar wages and condemning an earlier investigation into worker safety. “After looking into this claim, not only was it untrue for this individual’s team, it was untrue for any of the hundreds of teams in the factory,” he wrote.

In the email, initially acquired by Electrek, Musk refutes all of the complaints made against his company in the aforementioned blog post. Regarding workplace safety, the email posits that incidents have dropped dramatically since January 1st. Musk cites a total recordable incident rate under 3.3, which he claims is less than half the current industry average of 6.7. “Of course, the goal is to have as close to zero injuries as humanly possible, so we need to keep improving,” Musk added.

As for renumeration concerns, the email reminded readers that Tesla factory workers earn equity and, over a four-year period, would earn “between $70,000 and $100,000 more in total compensation than the employees at other U.S. auto companies.” Musk even went so far as to calculate the average earnings from other domestic automakers (after union dues).

The message’s tone, while serious, remains extremely positive throughout. The final lines are given the subheading of “fun” and include the prospect of free frozen yogurt and roller coasters once the company approaches profitability, before concluding with a smiley emoticon:

“As we get closer to being a profitable company, we will be able to afford more and more fun things. For example, as I mentioned at the last company talk, we are going to hold a really amazing party once Model 3 reaches volume production later this year. There will also be little things that come along like free frozen yogurt stands scattered around the factory and my personal favorite: a Tesla electric pod car roller coaster (with an optional loop the loop route, of course!) that will allow fast and fun travel throughout our Fremont campus, dipping in and out of the factory and connecting all the parking lots. It’s going to get crazy good 🙂”

Keeping employees happy is essential right now, as Tesla prepares to begin production on the oh-so-important Model 3. Production targets are lofty and schedules are exceptionally tight; a suddenly disenfranchised or adversarial labor force could have devastating ramifications.

[Image: Steve Jurvetson/Flickr (CC BY 2.0)]

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21 Comments on “Union Vaccine: Elon Musk Promises Free Frozen Yogurt and Roller Coasters to Employees...”


  • avatar

    Frozen yogurt and loop-the-loop on a roller coaster. Interesting combination.

    What could possibly go wrong?

  • avatar
    Malforus

    Can we all again point out that his compensation claims are based on stock options and not actual cash compensation?

    Look I get it, getting a stock benefit in a company is great however we all know that valuing them is dodgy at best and depends on a continual upward trend.

    However, if the company folds it also means that people’s bonus’s are worthless right when an employee needs a bit of extra cash in the bank.

    • 0 avatar
      SCE to AUX

      When I was laid off from a startup in 2003, I was told I could purchase my options, which would have cost me about $10k at the time.

      Not surprisingly, exercising $10k of stock options was incompatible with my unemployed income statement, so I passed. 18 months later, the company was bought and the options would have been worth $150k.

      That’s the risk of signing on with a startup (except that Tesla isn’t a startup; they’ve been around 14 years). It’s also the risk of accepting a job with stock options.

      Edit: Tesla isn’t a startup in terms of age, but they are a startup in terms of profitability and process maturity. Their future hinges on the Model 3. If they can become profitable once that vehicle is in full production, things get much brighter.

      • 0 avatar
        orenwolf

        Very much this.

        It doesn’t always work out, but Tesla itself is a gamble, and offering a way for employees to partake in that gamble if they so wish is one of the few equitable means for a startup to reward early efforts.

        such is the nature of risk in the stock market. You can argue their relative valuation but you can hardly dismiss them as potentially valuable.

        • 0 avatar
          never_follow

          Offering a way for employees to get in is great – making it mandatory isn’t.

          I have stock options at my employer, and they’ll even match me up to a certain percentage! However, I opt in to that program, as right now it would be stupid for me not to.

          That being said, if I had unexpected twins, or had to move back across the country, cashflow would be much more valuable to me. At my current employer, I could opt out. Tesla employees don’t have that luxury as they apparently get stock grants.

          • 0 avatar
            orenwolf

            I’ve never heard of mandatory stock options. Are you referring to stock grants?

          • 0 avatar
            never_follow

            Yes. From what I can google, there’s a four year vesting period. That’s too far out to do many people any good, and depending on how the company performs (or doesn’t), it may be worth sweet FA anyways.

  • avatar
    Felix Hoenikker

    If I were a Tesla employee, I’d be more interested in cash today rather than future stock options. Especially, since Elon purchased the financially shaky Solar City. I;m waiting for the roof to blow off that one (pun intended).

    • 0 avatar
      SCE to AUX

      Stock options can be very lucrative.

      If the Model 3 “makes” the company (they have over 400k reservations), everyone makes money.

      If the Model 3 “breaks” the company, then the employees lose nothing.

      • 0 avatar
        bullnuke

        The employees of the local (now shuttered) Corning plant believed that their stock options were very lucrative. These folks worked for mid-level wages making glass products with retirement from Corning consisting of company stock. In ’99 a large percentage of the workforce had retirements worth >$1 million in Corning stock, the value of of the stock based upon photonic/fiber optic products. Many hung on and extended their retirement dates to accumulate more; a few smart ones bailed and cashed out with impressive results. Come year 2001, the company stock dropped from $113/share down to around $1.00/share. A couple years later everyone was laid-off and the plant closed. The retirements/nest eggs/stocks of these hanger-on’s were just a little above worthless. Corning was not an “extended start-up” as Tesla seems to be.

        • 0 avatar
          indi500fan

          For many years I’ve told people that it’s very risky to have both your job AND your retirement savings resting on the same financial footings.

          I know a number of folks who rode the GM stock in their 401k plans right into the ground in the years preceding bankruptcy.

  • avatar
    kefkafloyd

    I mean, how hard is it to just pay people a decent living and not run them into the ground? I would also recommend not having a hostile or cultish work environment, but you can’t have it all.

    • 0 avatar
      psarhjinian

      “I would also recommend not having a hostile or cultish work environment…”

      This. This is usually why people leave jobs: not because of pay or benefits, but because of management. It’s also, in the modern era, how unions slip in: management spends too many years being unpleasant to front-line people.

      The problem is that SV-culture HR is either not empowered and capable of dealing with the issues and/or is completely cowed. Often, both is the case.

      • 0 avatar
        hgrunt

        From the comments I’ve seen from current and former Tesla factory floor employees, their main gripes do come from inexperienced/indifferent middle management. Many like the free cereal bars, but that’s not always enough to make up for a lack of clear career path or guidance from managers.

  • avatar
    indi500fan

    If the UAW can’t grab the workforce in a former UAW plant in a state where Hillary won by over 30 percentage points, they may be nearing extinction.

  • avatar
    SCE to AUX

    Elon: “Why are these strange men hugging me at a Dairy Queen? Don’t they know who I am? Is there any hand sanitizer around here?

    • 0 avatar
      indi500fan

      Are those the two guys he’s sending to the moon in 2018?
      https://www.bloomberg.com/news/articles/2017-02-27/musk-s-spacex-plans-to-send-two-private-citizens-to-moon-in-2018

  • avatar
    low_compression

    Frozen yogurt and a roller coaster? Are his employees all 12yrs old?

    • 0 avatar
      JimZ

      you’ve got to understand Silicon Valley culture. “Workplace happiness” is letting your employees come in to the office wearing shorts and no shoes, ping-pong tables and swimming pools, arcade games in the hallway, high end catering in the cafeteria, and so forth.

      “Making the work environment suck less” is for losers.

  • avatar
    RHD

    Elon is a visionary, the Preston Tucker of our times. Still, he should ask his wife to pick him up a few shirts that fit during her next shopping marathon.

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