By on February 10, 2017

tesla factory fremont

Some employees at Tesla Inc.’s Fremont, California factory have been moving ahead with efforts to unionize. Fronting that campaign is Jose Moran, who claims to have worked at the plant for the last four years. He and other disgruntled Tesla employees have reached out to the United Automobile Workers, claiming they work long hours for low pay under unsafe conditions as the company pursues aggressive production deadlines.

While Tesla’s CEO has responded with his own claim that Moran was paid by the UAW to join his company and proselytize for a union, the organization promptly refuted that suggestion by accusing Tesla of spreading dreaded “fake news.” 

The UAW previously expressed an interest in unionizing Musk’s California assembly plant employees after an investigation revealed that Tesla hired foreign workers through a subcontractor. Those workers were reportedly paid $5 an hour and forced to work long hours in an unsafe manner.

In a recent blog posting, Moran echoed those safety concerns.

“Preventable injuries happen often. In addition to long working hours, machinery is often not ergonomically compatible with our bodies,” he wrote. “There is too much twisting and turning and extra physical movement to do jobs that could be simplified if workers’ input were welcomed. Add a shortage of manpower and a constant push to work faster to meet production goals, and injuries are bound to happen.”

He also wrote Fremont plant employees typically earn between $17 and $21 an hour, before citing the current national average of $25.58 per hour. The U.S. Department of Labor actually lists a higher average.

Tesla’s California factory is the sole U.S. plant owned by an American automaker that is not unionized, and the UAW hasn’t kept secret its desire to change that. The union’s secretary-treasurer, Gary Casteel, told Automotive News in June that members had been speaking with workers at the plant. However, UAW also claimed it had planned to wait until Tesla had moved beyond startup status to begin organizing.

“This is not the first time we have been the target of a professional union organizing effort such as this,” a Tesla spokesman said in an official statement.

The automaker’s CEO was much more candid — criticizing Moran’s accusations as well as the union.

“Frankly, I find this attack to be morally outrageous. Tesla is the last car company left in California, because costs are so high,” Musk told Gizmodo. “The UAW killed [Toyota-GM joint venture NUMMI] and abandoned the workers at our Fremont plant in 2010. They have no leg to stand on.”

[Image: Tesla Motors]

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109 Comments on “As Tesla Plant Shows Early Signs of Unionizing, Musk and UAW Trade Blows...”


  • avatar
    SCE to AUX

    “claiming they work long hours for low pay under unsafe conditions”

    I’m no union lover, but this is why unions exist. Tesla can either address these concerns, or plan to have an adversarial relationship with its workforce.

    • 0 avatar
      JimZ

      yeah. Musk & friends need to consider why employees at the “transplants” have not unionized yet despite repeated attempts by the UAW to organize.

      his schtick of complaining how everyone is out to get him is really starting to wear thin.

      • 0 avatar
        dal20402

        The usual attitude of the .01 percenters. They have been in a bubble for their entire lives and have no idea what life is like outside of it. So anything that puts pressure on that bubble is seen as some sort of unfair persecution.

        It’s the same thing as when Tom Perkins compared a proposal to raise his marginal rate by a few percentage points to Kristallnacht.

      • 0 avatar
        Lou_BC

        Agreed. If one treats their workers ethically then there isn’t a need for unions. If one lookes at percentages to define the balance between worker “power” and that of the employer, federal guidelines gives the worker roughly a 25% tilt in protection. 75% of the power lies with the business. Unions tend to shift it to 50/50. That line is always in flux.

    • 0 avatar
      jmp2006

      If the conditions are so bad, why doesn’t he just quit and get another job? Free market and all. You don’t like it, get out.

      • 0 avatar
        JimZ

        Yes, because it’s as easy as going down to the Job Store and picking a new one off of the shelf.

        • 0 avatar
          jmp2006

          I didn’t say anything about it being easy. But it can be done. Why does everyone want things “easy”? If it ain’t easy, does that mean that it can’t be done?

          What happened to personal responsibility? Dude works there for four years, all in horrible conditions according to him, and never once thinks about – “hey, this sucks, I think I can do better somewhere else”?

          • 0 avatar
            Lou_BC

            jmp2006 – You comment applies equally to all of those unemployed workers that voted for Trump.
            Why can’t they just find another job?
            Why do they need protection any more than any other worker?

            “What happened to personal responsibility?”
            That fellow is looking at not just his responsibility to himself but to that of his colleagues.

          • 0 avatar
            Arthur Dailey

            @jmp what happened to loyalty? After dedicating their time and effort and perhaps a great many years to the profitability of a corporation doesn’t the corporation owe some loyalty to the worker?

            Much like a divorces spouse is owed support for their years of effort.

            Even in the feudal system, once a serf was too old or ill to perform their chores the Lord of the Manor did not throw the serf of the land but ensured that they had clothes on their backs, food in their bellies and a roof over the heads for the rest of their miserable lives.

          • 0 avatar
            John-95_Taurus_3.0_AX4N

            TRUMPS FAULT
            ALL OF IT

      • 0 avatar
        dal20402

        Maybe because he believes in the company and its mission and wants to improve it rather than abandon it.

        Also, a truly free market allows for collective bargaining.

        • 0 avatar
          jmp2006

          A truly free market allows for a private company to do whatever it wants. And that’s including telling people to F-Off.

          If I don’t want to hire you because you annoy me or your hair is weird or I just don’t like your face, I should be able to do that. On the flip side, if you don’t like anything about how I run my company, you are free to vent your grievances or leave. In either case, we both have to live with the consequences.

          People make personal decisions all the time. They weigh the risks and benefits and go with it.

          • 0 avatar

            And people can make the decision to unionize to improve their bargaining power.

          • 0 avatar
            Lou_BC

            “A truly free market allows for a private company to do whatever it wants.”

            REALLY?

            Worker safety doesn’t matter?

            Environmental stewardship doesn’t matter?

            Workers being able to feed, clothe, and shelter family doesn’t matter?

            The only thing that matters is profits.

            Ever wonder why many American companies set up shop in places like China?

          • 0 avatar
            DeadWeight

            “Truly free markets” only exist as hypothetical constructs in academic textbooks, just as “socialist utopias” do.

            In the real world, every economy, from those of “developed” nations to ones existing in banana republics have makes attributes, with subsidization, parasitic losses due to graft/corruption, and varying (but high nonetheless) degrees of economic and social inefficiencies due to either lack of regulation or over-regulation.

            There’s really only one type of economy in the real world, and that is a mixed-one, where legislatures bestow taxpayer gifts on defense contractors, governments prop up keiretsus or chaebols, or despots get bribed to let private entities strip natural resources.

            I have been hearing about these magical “free markets” from the right and “socialist utopias” from the left all my life, and paradoxically see most people using the myths to convince people to vote or act against their own economic and social self-interests.

          • 0 avatar

            I hear you DW but people like simple black and white answers.

          • 0 avatar
            VoGo

            In fairness, DW, we lefties have pretty much given up on the socialist utopias. We’re just hoping to keep health insurance for 90% of us and keep the EPA, Dept. of Education and National Parks open for the next 4 years.

          • 0 avatar
            Lou_BC

            DeadWeight – agree 100%. There is a need to find a balance between unfettered free market capitalism and highly regulated socialized industry.

            Trump would not have stood a snowflake’s chance in hell of getting elected if the right or left in the USA actually cared about the “unskilled” middle class.
            “Safety nets” are a dirty word in the USA but some form of assistance for those vulnerable to economic change should have been put in place decades ago. I’m not espousing welfare/workfare but education/trade programs that would allow people to find work in the so called new economy.
            Alberta is a prime example. Most of the unemployed from the oil collapse are unskilled workers. I know several HD mechanics, electricians and plant Engineers that are still gainfully employed.

          • 0 avatar
            golden2husky

            ….A truly free market allows for a private company to do whatever it wants. And that’s including telling people to F-Off….

            Which is why a truly free market is an absolute fail. We’ve been there, done that. We don’t need to repeat the industrial revolution. Want to keep the union out? Simple – provide a good working environment and a fair wage and compensation package. Note the use of the word FAIR. That applies to both sides. The transplants offer what they do for a reason and that reason is to provide good enough compensation and work experience to keep the employees from feeling the need to unionize. A win for all – the workers get the compensation they deserve w/o the “baggage” of being part of the UAW and management gets the flexibility to run the plant without being held hostage to union work rules. It all works well…unless the UAW to disappear…should that happen, I’d bet wages would stagnate overnight.

            DW – well said.

        • 0 avatar
          WheelMcCoy

          +1 @dal20402

          And the workers not only believe in the mission, but actually like working together and are proud of what they do. Sometimes, it’s upper management that endangers the company.

          Here’s a short video about GM at its worst in the 1980s. But Toyota was able to turn the factory around using the same workers.

          NYT: The Art Of Better
          https://nyti.ms/2iqWbV0

      • 0 avatar
        carlisimo

        I live in Fremont and know people who work there. Some of them say that retroactive changes to vacation/sick day policy has left them unable to take a few hours off to go to interviews. The way housing is here, you don’t quit and then look for a job.

        It’s also that they got over what appeared to be a temporary hump in workload (mandatory Saturdays for a while) and figured they could deal with it. But the workload hasn’t let up and HR has been making disliked changes very recently, so they’re only now starting to want to leave.

        • 0 avatar
          Arthur Dailey

          DW summed things up very nicely. My favourite example is the Province of Alberta, the capital of free market beliefs in Canada. When the petroleum industry was booming there, the service industry had trouble finding employees. Rather than letting the ‘free market’ that they support so fervently take its course and offer higher wages to attract workers, these capitalists convinced the government to allow them to import ‘temporary foreign workers’. Much like indentured servants these TFW’s could only work for the company that sponsored them. They were generally housed in apartments/condos owned by the franchisee/owner of the organization in which they worked. So their ‘room and board’ was deducted from their minimum wage pay. And if they complained they could be sent back to their country of origin.

          So much for free market capitalism.

          • 0 avatar
            dash riprock

            TFW’s have been around for decades. The program was introduced by Trudeau the senior. Popular all over including BC(farm workers), Ontario, Maritimes(tree farms-“I already qualified for EI, see you next summer!”).

            Seems that the only thing central Canadians like about Alberta are the tax dollars they send.

          • 0 avatar
            Arthur Dailey

            @Dash: here are the facts regarding the TFW program ( a simple cut and past from Wikipedia): ” When the program started in 1973, most of the workers brought in were high-skill workers such as specialist doctors. In 2002 a “low-skilled workers” category was added; this category now makes up most of the temporary foreign workforce. In 2006, the program was expanded and fast-tracking introduced for some locations.”

            “The total number of TFW more than doubled between 1993 and 2013, to 338,189 workers. Between 2006 and 2014, more than 500,000 workers TFWs were brought into Canada under the program.”

            It was ‘used and abused’ by the service industry when the petroleum industry was booming. Rather than their relying on the ‘invisible hand’ of the free market. Isn’t that rather hypocritical that those who promote free markets, are so quick to resort to government intervention when things do not go their way?

            As for Central Canada versus Alberta, not sure why so many Albertans have that chip on their shoulder? Might it be nausea caused by the cyclical nature of the economy? Even prior to the crash petroleum accounted for only 3% of Canadian GDP (The Economist Jan 29th 2015.)

          • 0 avatar
            dash riprock

            As for Central Canada versus Alberta, not sure why so many Albertans have that chip on their shoulder? Might it be nausea caused by the cyclical nature of the economy?

            Not an Albertan. Vancouver Islander here. The chip on the shoulder is pretty small. Please imagine if instead of all those dirty oil dollars flowing from Alberta to Quebec, it was reverse. What would the Que government have been saying the past 20 years? Guarantee they would have been much more vocal about the inequity in fiscal matters.

            If you has traveled in Alberta during the good years, you would have seen how aggressively businesses worked to get any workers. If they went TFW (for the most part) it was out of necessity as Canadians in other parts of the country preferred to stay local and not travel to where there was work.

            Additionally, the immigration process was adapted to allow more skilled workers Visa’s and entry to Canada. Trudeau the junior, is reversing that improvement to focus more on family reunification.

    • 0 avatar
      tonycd

      I remember reading that Tesla tells prospective factory employees up front they can expect incessant overtime: “Changing the world is not a 9-to-5 job.”

      I’m repelled by this notion that a company’s “mission” justifies routinely abusing the help. If you hold yourself up as the hope for a superior future, what’s the appeal of a future with wage slavery at its core?

      Also, an aside about the comments below that workers who don’t like it should simply shop for a job with better working conditions. First, in case one has never read U.S. labor statistics post-2008, there aren’t enough of those jobs to go around. Second, be advised that the current administration and Congress are now readying nationwide “right to work” legislation that will outlaw the traditional union shop, effectively gutting unionism nationwide and gutting the funding of the GOP’s opposition party in one fell swoop.

      As correctly noted below, the transplant automakers and a lot of other industries pay well only because they know they have to stay remotely competitive with union workplaces. Once this hammer drops, good luck with that “better job” search then.

      • 0 avatar
        SirRaoulDuke

        All of your points are dead on.

      • 0 avatar
        Arthur Dailey

        @ dash; As we operate a manufacturing and distribution centre in Alberta, I understand fully the issues. We increased our pay rates and benefits, paying more than what we pay/paid in our Ontario facilities. A number of our Ontario workers took advantage of this to transfer to Alberta. And we had little trouble hiring locals.

        Unlike those who ran cap in hand to the government putting in pleas to use TFW’s because they would not increase their pay rates.

        And of course thousands left The Rock to work in Alberta.

        As for the TFW program and skilled vs unskilled workers, the majority of the increase was in unskilled workers.

  • avatar

    Getting paid $17-$21 seems low for California considering I know union workers in TN getting $23-24 at Nissan. Lot cheaper COL in TN too. Seems Tesla forgot what the southern auto transplants know well, keep em’ well paid and you keep the union out.

    • 0 avatar
      indi500fan

      I’m not sure about all those “fight for $15” gravy jobs in the Cali paradise, but I did read one story on this topic where the guy had a 90 minute each way commute and said it was the best deal going for him.

    • 0 avatar
      delow48

      This is true. If Tesla wants to survive they will need to move to a right to work state. The days of needing a union for safety and such are long long gone and the labor force as far as for someone slightly skilled is very tight. It is not like companies want to have to constantly train new people, they want their workforce to stay. If safety is an issue and the people are scared…then quit. That is one way to get the attention if enough people feel unsafe…and they would likely get their jobs back in the long term.

      At the crux of it is taht what you say is true, pay them well and people will be glad to work for you.

  • avatar
    Pch101

    Musk has a lot in common with the current US president: His relationship with the truth is poor at best, yet his fans defend him vehemently and refuse to see it.

    NUMMI failed because GM bailed out of it in connection with its bankruptcy filing. Toyota’s alternative would have been to pay GM for it.

    Ironically, Tesla benefited directly from this because Toyota essentially paid Tesla to take the NUMMI plant. Had it not been for GM’s bankruptcy, Tesla itself would have failed because securing a site was one of its milestone requirements for its federal funding and time was running out.

    • 0 avatar
      VoGo

      Sorry, Pch, but taking liberties with the truth and having fans does not make you like the current US president.

      Being a sexual predator, a congenital liar, a Propecia addict, a spoiled brat who frittered away most of his dad’s wealth on vanity projects, a serial philanderer who impregnates women outside of wedlock, a thief who hides behind lawyers to mask his crimes and a complete rip-off artist – that’s what makes you like the current US president.

      But to your point, I think Musk is unwise to mistreat workers – it’s not a policy that’s well aligned with the values of his customers.

      This sounds like a symptom of simply not knowing how to build cars at scale. We should expect to see a lot of these teething pains over the next year, especially given that everything Tesla does is so public.

  • avatar
    psarhjinian

    “Frankly, I find this attack to be morally outrageous. Tesla is the last car company left in California, because costs are so high,”

    And those costs are that way _because_ of wage pressure from Silicon Valley and the surrounding area. If you want cheaper people, you’ll need to move.

    Which, then, would mean greenfielding your own plant, which is _expensive_.

    “Musk told Gizmodo. “The UAW killed [Toyota-GM joint venture NUMMI] and abandoned the workers at our Fremont plant in 2010. They have no leg to stand on.””

    Uh huh. My understanding was that NUMMI closed because GM went bankrupt and bailed on the venture, and Toyota didn’t need the capacity. Regardless of the plant’s being unionized or not, it was going to close.

    Regardless of whether or not the unionization efforts are aboveboard or not, Mr. Musk’s line of reasoning is specious at best.

    • 0 avatar
      orenwolf

      “Uh huh. My understanding was that NUMMI closed because GM went bankrupt and bailed on the venture, and Toyota didn’t need the capacity. Regardless of the plant’s being unionized or not, it was going to close.”

      Second time I’ve seen this comment.

      Sure, GM went bankrupt. Why did they choose to bail on NUMMI? Because it was too expensive!

      I don’t know if Musk or the Union is painting an accurate picture. I’m sure the answer is “neither” and it’s in fact somewhere in-between. maybe the guy is a union plant, maybe not – I don’t know if Unions do that sort of thing or not.

      I *do* know that the cost of living in that area is *insane* and it’s probably right to question whether or not the wages paid to assembly workers are sustainable in that area. UAW or not, if the costs aren’t sustainable, they’re going to move production.

      • 0 avatar
        philadlj

        Let’s just say NUMMI closed for _many_ reasons. It doesn’t just have to be “because of the UAW” or “because GM went bankrupt.”

      • 0 avatar
        Pch101

        No, GM bailed out because it could dump the NUMMI liabilities into someone else’s lap.

        NUMMI was a joint venture. In other words, it’s really just a name, not an actual legally separate business entity.

        NUMMI was similar to community property in a divorce. Imagine if you and your spouse were splitting up and you had a big pile of dog crap in the yard that you could just abandon, leaving her stuck with the entire problem because you are filing BK but she isn’t. That was NUMMI.

        NUMMI was an old plant that would have required upgrading. Neither Toyota nor GM needed the capacity.

        For NUMMI to work, it needed to produce inventory for two automakers. NUMMI would have had far too much capacity for just one of them, and TMC certainly did not need more of it when it had just built new factories that were going to be underutilized in the wake of the crash.

        Toyota couldn’t just sell the Fremont plant because of the environmental liabilities associated with the property. It was actually cheaper to pay Tesla to take it than to clean it up and sell it for a non-automotive use, particularly during an economic crisis.

        So no, the UAW had nada to do with it. No reason to believe Musk’s alternative facts.

  • avatar
    Rday

    TOyota bailed on Nummi because they did not want the UAW to tell them how to run their plants. Plain and simple. And Tesla is probably setting themselves up to be unionized by paying low wages. Sounds that there are no ‘good guys’ in this fight.

    • 0 avatar
      psarhjinian

      Funny, Toyota had no issue with the UAW and NUMMI for the decades that it was building Corollas. It was actually a pretty good plant.

      Toyota bailed when GM walked away from it and the economy was teetering; they (Toyota) would be stupid to run a plant at half-capacity when they could send Corolla production elsewhere. The UAW’s presence had nothing to do with that decision.

      • 0 avatar
        tonycd

        NUMMI made good cars. That’s a documented fact. It’s a myth that unionized workforces always do lousy work. Fact: Unionized workforces under American management teams usually do lousy work.

        Whether that’s because of what they teach in American business schools, or because the subservience to Wall Street’s short-range profit pressures leads to lousy decision making and disregard for quality, is a tangled question beyond my pay grade. But it’s probably an inseparable combination of the two.

        GM now builds many vehicles with good INITIAL quality, but they don’t last as well as the better Japanese iron. That’s directly traceable to the poor, predatory relationships GM enforces on its suppliers, as opposed to the collaborative long-term relationships nurtured by Toyota and Honda through their transplant operations. This has been repeatedly confirmed by independent surveys of the suppliers themselves. And that’s a management decision.

        Some U.S. suppliers have gone so far as to openly admit that if they’re providing the same part to a US maker and a Japanese one, they feel so ill-used by the US maker that Toyonda will get the better part. That’s not the fault of the union assembly-line worker who installs it into the car. It’s the result of management decisions.

        And to those who glibly reply that the US maker has to do this because excessive union-labor costs pressure them into it, I reply that Toyonda make more money than they do with an alternative business model: higher margins from the higher transaction prices a better product commands. It’s a formula that seems to have worked pretty well for them.

        • 0 avatar
          Lou_BC

          @tonycd – Toyota’s “unintended acceleration” scandal highlights some of the flaws in “American” business models. The Toyota recall primarily involved gas pedals made by an American manufacturer – CTS Corporation. Denso’s pedals were not recalled. Ford and a few other companies were also using pedals from CTS Corporation and had pedal recalls.

          • 0 avatar
            Malforus

            Toyota’s pedal problem was never technical it was an outflow of our torte law.

            The only problem with the pedal in vehicles, proven in court was a design flaw which allowed the carpet to move up and stick the pedal. As a result retaining braces for carpets in the driver footwell were introduced.

            No “higher quality” manufacturing can resolve a design flaw. Which is how I know you don’t work in manufacturing or any adjacency. Its implicit in the trade to understand the limits of design on quality.

          • 0 avatar
            Lou_BC

            @Malforus – Carpet getting stuck in the pedal was a separate issue. There were problems with the pedal itself.

        • 0 avatar
          Arthur Dailey

          @tonycd: although I agree with most of your post, union workers under North American management have managed to make good vehicles with great reliability. Ask anyone who bought an Oshawa built Buick with a 3800 engine.

    • 0 avatar
      JimZ

      “TOyota bailed on Nummi because they did not want the UAW to tell them how to run their plants.”

      Huh? how revisionist do we want to be here? For its entire existence NUMMI was UAW-represented.

  • avatar
    jimf42

    I anticipate new Tesla plants in right to work states…

    • 0 avatar
      psarhjinian

      With what money? Plants are expensive to build, and Tesla is not exactly rolling in capital.

      • 0 avatar
        VoGo

        Tesla is worth $40B; double what FCA is worth. Money is not an issue. Management attention and industry experience is.

        • 0 avatar
          JimZ

          Market cap is the “equity value” of a company; basically what it would cost to buy the company outright. Tesla’s $44 billion “worth” is driven primarily by its share price and doesn’t have any bearing on what they can afford to spend money on.

          • 0 avatar
            VoGo

            Partly right. A high equity value also indicates ability to raise funds, provided you have a strong story to explain the need.

      • 0 avatar
        Rick Astley

        Silly psarhjinian,

        Elon Musk has not gotten where he is by using his own wealth to leverage businesses. That’s what tax dollars are for! As long as somebody else is fronting most of the bill and assuming the risk, Musk is a man of infinite genius and attainable goals.

        It’s when his skin is in the game that he wilts like a flower.

        Tesla moving plants to a new state/county which offer vast tax discounts and assume the risk is pretty much exactly what his playbook is about.

        • 0 avatar
          VoGo

          Rick,
          Tesla and Musk haven’t received a cent that wasn’t available to every competitor. And never received an $11B bankruptcy handout from the US taxpayer.

          These lies really do need to end.

          • 0 avatar
            Rick Astley

            Sorry VoGo, I was unaware that GM, Ford, Honda, Toyota, etc were also submitting tax subsidy requests for battery facilities in NV, or that any of them received the $4.9 billion in government support for their pointless, private quasi-space travel.

            http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html

            And absolutely we must stop spreading the lie that taxpayer funded Tesla motors then sells their subsidized CAFE carbon credits to other automakers at an additional profit as well.

            The worst lie is when it turns out to be true. Because then calling it a lie is in itself a lie.

          • 0 avatar
            VoGo

            Rick Astley,
            You really are misinformed. Any company that provides jobs is going to get tax rebates for locating in a specific locale. This is how business works.

            As for SpaceX – they are acting as a government contractor. THAT’S NOT A SUBSIDY.

            The carbon credits are traded by nearly all carmakers – and are available to all carmakers.

            You really should read more before you post such lame lies.

        • 0 avatar
          psarhjinian

          “Tesla moving plants to a new state/county which offer vast tax discounts and assume the risk is pretty much exactly what his playbook is about”

          And while that may be true, someone has to pay to build the plant, even if he gets a bunch of grants and pays no tax.

          Mass-production is not like an SV startup, or for that matter, like rocket science. Someone has to pay to build a factory, it’s facilities, tooling, workforce, supply chain and so forth.

          All this stuff costs real money. Like, “money-in-the-bank” money. Tesla has some equity, but no way would someone loan him the billions it would take to greenfield a new plant.

          The only reason he has NUMMI is because he got it for free. Now, if, eg, VW bails on Chattanooga, then perhaps he could pick up another freebie.

        • 0 avatar
          vaportrail

          Do any of the Tesla critics care to discuss the subsidies the oil industry receives?

          http://www.ibtimes.com/us-fossil-fuel-subsidies-increase-dramatically-despite-climate-change-pledge-2180918

          Do we look the other way because cheap gas?

          • 0 avatar
            VoGo

            Of course not. I wish these guys would at least pretend to be intellectually honest and pollute every article about an ICE car with their whining about how subsidized it is. But they never do, because they are ridiculous tools.

        • 0 avatar
          Arthur Dailey

          RickAstley: are you accusing Musk as using the same business practices as the POTUS? After all he licenses his name, is not averse to having one of his investments go bankrupt and therefore ‘stiffing’ suppliers and workers and by his own admission has paid very little in personal tax the past number of years.

    • 0 avatar
      mcs

      @jimf42: I anticipate new Tesla plants in right to work states…

      It’s happening already. The Gigafactory is going to build the Model 3 motors and drivetrains in Nevada.

  • avatar
    shedkept

    Old L.A. Times headline:

    “Elon Musk’s growing empire is fueled by $4.9 billion in government subsidies”

    • 0 avatar
      VoGo

      Actually read the article and show me a SINGLE subsidy that wasn’t available to every competitor.

      Old headline in every single newspaper: GM takes $11B in bailout; doesn’t pay it back.

      • 0 avatar
        Rick Astley

        $4.9B for Space X wasn’t available.

        $1.3B gigafactory tax credits weren’t.

        We’re talking about OTHER than those $6.2B, right?

        • 0 avatar
          VoGo

          Rick Astley, you’re posts are truly ghastly, (with respect to Nick Lowe’s All Men Are Liars)

          Please do your research before you re-post garbage. The $ paid to SpaceX was for services, not a subsidy. The tax credits for the factory are business as usual for any company bringing jobs to a locality.

        • 0 avatar
          orenwolf

          Wait, now buying rockets from SpaceX is a tax credit?

          And, show me a factory without Tax Credits?

    • 0 avatar
      SCE to AUX

      VoGo is right.

      Tesla’s government loan was paid back long ago, and the local tax breaks the company receives, plus the subsidies its customers receive, are available to all.

      I am personally against subsidies and corporate welfare. But their elimination would cripple the entire auto industry (and other industries), not just Tesla. Just look at the ‘investments’ by Ontario to keep GM around a little longer.

  • avatar
    redliner

    It’s really simple. Middle management needs to be more responsive to workers physical limitations and job concerns and pay at/near the average.

    I understand that the company is in a critical phase and it’s probably pushing it’s workforce HARD to meet deadlines and goals. Workers are willing to accept difficult working conditions temporarily, but not indefinitely.

    Tesla should take this as a warning and implement changes now if they want to remain non-union.

    • 0 avatar
      redmondjp

      Nice thoughts, but it’s do or die time for Tesla, and they may die trying. Making money by making cars is a really tough business. They have a serious cash flow problem to face.

      Had they not blown so much cash on the SUV, they would be in much better financial condition right now and would already be in production with the latest model.

      • 0 avatar
        redliner

        But… but… but falcon wing doors!

      • 0 avatar
        VoGo

        In case you’ll allow facts to interfere with your conjecture:
        – Tesla was profitable in Q3
        – The Model S and Model X are profitable
        – Tesla has $3B in cash on hand.

        • 0 avatar
          Pch101

          In twelve days, Q4 results will be released.

          One of us is going to have some ‘splainin’ to do, and I’m thinking that the someone won’t be me.

          • 0 avatar
            VoGo

            Pch,
            You said this 3 months ago, and then disappeared when Tesla turned in a profitable quarter.

            I am not predicting Q4 results, only relating the facts.

          • 0 avatar
            Pch101

            Er, not only did I not “disappear”, but I specifically stated how Q3 profits were probably a one-time event similar to the other single profitable quarter that Tesla has had to date:

            https://www.thetruthaboutcars.com/2016/10/ttac-news-round-bob-lutz-hates-musk/#comment-8498409

            If Vogo keeps this up, he should have his handle changed to Kelco (as in Kellyanne Conway.)

          • 0 avatar
            VoGo

            OK, pch,
            Seems like you’ve been gone for a while. Whatever.

            I need to get over to the local Chevy dealer. They are selling all Corvettes in stock at 20% off MSRP, and calling the event The Bowling Green Massacre.

            By the way, PCH, in that thread you also point out that Yahoo’s market cap fell 96%, insinuating that would happen to TSLA. How did that work out?

          • 0 avatar
            Pch101

            You suggested that I was avoiding the subject of Q3 operations, and that obviously isn’t true.

          • 0 avatar
            VoGo

            I believe you, PCH. Obviously you didn’t desert TTAC in shame over TSLA’s profitability. I’m sure you have an actual life with better things to do most of the time.

        • 0 avatar
          DeadWeight

          VoGo, Tesla, the money pit once independently standing as SolarCity (now “acquired” by Tesla) & Trump (no one knows how big a money pit The Trump Companies are – just that they’re in deep hock to Russian, Chinese and banks controlled by other sovereign nations ((Dubai?’Sandi Arabia??)) as they’re not required to release financial data) must consult the same accountant(s).

        • 0 avatar
          dash riprock

          Since you did not ask, here is my prediction on Q4. It will be a loss. How much I do not know since the Tesla accounting is a little murky.

          Keep an eye on capital expenditures for the quarter and the year. After Q3 they were on track to be almost a billion below their stated number of 1.9(down graded early in the year from 2.2 -rough numbers).

          Also of interest will be the zev credits sold after a big dump in the “profitable” Q3

          • 0 avatar
            SCE to AUX

            I believe Tesla has already predicted losses for some time to come, like until 2019.

            But I think they’ve committed to use GAAP from now on.

            Q4 will be a lose; they’re burning money like a Falcon 9 rocket. :)

  • avatar
    indi500fan

    I’m curious.
    Did Tesla hire any employees who had been UAW members at NUMMI?

    I know when Honda started up in Ohio in the 80s, they wouldn’t even interview you if you had any UAW history, even in a UAW plant as a salary person.

  • avatar
    tylanner

    Elon Musk loves appealing to the thousands who show up for unveiling or club meetings or Space-X worshipers but it will be interesting to see where this all ends up. Both sides have a lot to gain.

    Musk will want to protect his potentially massive business (think Apple, Microsoft, Alphabet) which was the improbable result of his hard work. But he must absolutely be willing to compromise in some areas.

    The problem is that he can’t really afford to blow his capital on labor given the pace of his company and low production/sales. Can he leverage this fact and still maintain his promise of future sales?

    • 0 avatar
      LS1Fan

      Unless he can turn the Model 3 into a highly profitable ,high volume AND (not or) reliable product , the music is gonna stop regardless of his labor costs. Union or not,no money means no company.

  • avatar
    LS1Fan

    Tesla is a capital poor automaker with high debt and high capital costs. I’m not the least bit shocked at the pressure on the line workers-something has to give.

    Which might come to bite Musk and Co in the backside before long. It’s in the workers best interest to unionize ASAP- for one Tesla may not be around long term anyways, and they NEED the labor force with the Model 3 rollout.

    Two, under current management they’ll never have a fair shot at increasing wages or working conditions without the bargaining power unionizing offers.

    Three,being under the UAW offers political power which may put a leash on Musk balancing the company’s jacked up finances on the labor force.

    Four- Unless Musk repealed the law of profitability, Tesla sooner or later is going to run insolvent for good. When that happens the workers will be glad they got Tesla to pay them fair before the axe fell.

    • 0 avatar
      VoGo

      Newsflash: Tesla was profitable in Q3. On the Model S and X, even while investing heavily to bring out a new model and expand production 5-fold.

    • 0 avatar
      DC Bruce

      Well Tesla’s workers might be able to get a raise without the UAW. But the unionization of Tesla puts it right on the fault line of today’s Democratic Party. The rich “green” folks (who buy the Tesla cars) will defend the subsidies that keep Tesla afloat (selling of emission credits to other IC engine car companies) but will they support the unionization efforts that will drive the company’s costs higher? It’s not like the tech industry follows anything like “enlightened” employment policies, with its heavy reliance on H1-B visa workers, predominantly white male workforce, etc.

      Your fourth point is spot on, IMHO. Tesla has survived thus far as a niche player. When it tries to move into the high volume end of the market (as with the Model 3), it’s going to face serious competition that has greater scale and lots more cash to play with. The Bolt is only the start.

      • 0 avatar
        mcs

        @dcbruce: it’s going to face serious competition that has greater scale and lots more cash to play with.

        They’re going to be facing competition at the high end as well. I have an EV now and will replace it with a high-end EV. I like Tesla and the Model S, but if the Porsche Mission E isn’t too much more expensive than a P100D S, I’m headed to the Porsche dealer. It looks better, has a nicer interior, and has faster 800v charging (although, with 300+ mile range, I’d never need public charging anyway).

        • 0 avatar
          DC Bruce

          Yes. With governments world-wide exerting regulatory pressure on car-makers to market electric cars, it seems inevitable that the technologies they develop will be deployed at the high end, as well as at the middle. I mean, why not? The per-unit profit on luxury cars is much greater than on mass market vehicles. And, just about everything I read suggests that, apart from its “electricness,” the Tesla is not all that outstanding as a car, in its price range. Others are better built, have nicer interiors, etc. and, of course, there’s “brand equity” which manufacturers like Porsche, et. al. have.
          I suspect that Musk knows that, which is why he’s trying to be the lowest-cost battery supplier. If he can be that, and protect it with patents, the big boys will have to come to him and pay.

  • avatar
    DC Bruce

    Kind of pathetic. Musk sets up a factory in a highly unionized state, with a high cost of living . . . and then expects to pay workers less (apparently) than similar workers earn in non-UAW plants in the South without them being organized by the UAW?

    Not gonna happen.

    And the closure of the plant that Tesla is using was caused by the GM Bankruptcy, not by the UAW (unless Musk wants to blame that on the union, too). Toyota didn’t want to operate it as a standalone Toyota plant . . . probably didn’t need the production capacity and also probably recognized that being in a high-cost state was not helpful. All kinds of things used to be made in California, especially the LA area. I was surprised to learn that Tesla’s plant is the biggest single source of manufacturing jobs in the state, but I shouldn’t have been.

  • avatar
    stingray65

    Here is what happened the last time an American management team “worked” together with the UAW at the Fremont plant:

    “At the time, the work force in the old GM Fremont plant was considered to be an extraordinarily “bad” one. Many considered it to be GM’s worst. The work force in those days had a horrible reputation, frequently going out on strike (sometimes wildcat strikes), filing grievance after grievance and even sabotaging quality. Absenteeism routinely ran over 20%. And, oh yes, the plant had produced some of the worst quality in the GM system. Remember, this was the early 1980s. So to be the worst in GM’s system at that time meant you were very, very bad indeed.” http://sloanreview.mit.edu/article/how-to-change-a-culture-lessons-from-nummi/

    The other issue that may come to bite the plant is the CA $15 minimum wage, which will likely mean that manufacturing plant wages will need to be boosted to maintain the traditional differentiation and help cover the costs of union dues. Add in the higher costs of energy in CA (due to renewable mandates and carbon taxes), high CA taxes, difficulties in getting permission to expand plants, etc., likely mean that UAW “overhead” + CA “overhead” costs will push Tesla into bankruptcy or away from Fremont.

  • avatar
    Brett Woods

    Get your popcorn. Get your candy. Hot dogs two dollars.

  • avatar
    pwrwrench

    California has an inaccurate image as a state with ‘high labor costs’, that is workers there get paid more than other states.
    That might have been true 25-30 years ago, but not now. As others have mentioned many jobs that paid above average are gone. McDonnell-Douglas, UniRoyal tire, Kaiser steel and so on are gone.
    In their place are jobs in small manufacturing, medical, retail etc.
    My own experience is typical. I worked for 16 years at an aircraft component company before I retired. Final pay, a little over $17 an hour.
    Sure there are a small percentage of jobs with very high pay in the tech industries (Sillycon Valley), doctors, lawyers, some at insurance companies and so forth, that skew the average pay higher. And of course some government employees.
    Outside of those few the spread sheet tells management that it’s less costly to have workers put in overtime as their pay has not kept up with productivity and prices. In the few years before I retired I was doing 55-60 hours per week. Everyone I knew in that industry was doing the same,(working at different companies). Don’t like it? Get another job.
    California is a “Work at will” state. Which means if your employer does not want you anymore you are out. Unless you can prove that they fired you because of old age, your race, sex or religion.
    The exception to that is if you have an employment contract. Which for most of us means being in a Union.
    Everyone I know would think they had Died and Gone to Heaven if the got paid the wages of the “non-union workers in the low wage South-East” auto plants. $25-30 an hour is a dream, with one exception that I know, and he’s in a Union.

    • 0 avatar
      Funky

      pwrwrench; Thank you. Sometimes it takes real world insight like this to inject some reality into the conversation (it helped me and probably other readers to build a better picture of the situation). Again, this was helpful and thanks for chiming in to add this.

  • avatar
    pwrwrench

    I suggest to anyone that thinks the “Workers and the UAW” are totally responsible for problems at the Big 3 auto plants, that they read Savage Factory. That’s about working at a Ford transmission plant around 1980. Certainly some things have changed since then, but I’m sure that the same Dilbert on Steroids management style is still there.

  • avatar
    SoCalMikester

    the nummi story was an interesting one. they went from worst in quality and morale, to being shut down, to reopening with most of the same workforce retrained in the “toyota way” as nummi. GM was supposed to learn from this and apply it elsewhere, but never really did.

    after the BK, GM got out because it was the only plant they had in the west, and the only GM product being made was the vibe- a dead pontiac.the tacomas and corollas being made there were non-essential “extra capacity” that could be built elsewhere.

    those tesla workers would be better off applying at their local costco for better pay and benefits

  • avatar
    Big Al From 'Murica

    They will relocate at some point if the CalExit gains steam. Importing from a non-NAFTA nation will kill them.

  • avatar
    Driver7

    Stingray65’s description of the NUMMI plant is from the period *before* the UAW workers at the GM Fremont plant adopted Toyota’s production methods.

    The radio show “This American Life” did a entire program about the Fremont plant, which was broadcast in 2010, and again in 2015:

    Link to that radio show:
    https://www.thisamericanlife.org/radio-archives/episode/561/nummi-2015

    Transcript of the show:
    https://www.thisamericanlife.org/radio-archives/episode/561/transcript

    From the “This American Life” transcript – what happened when the UAW workers returned from training at Toyota in Japan, and started working at NUMMI:

    Bruce Lee
    They hit the ground running. It didn’t take a year, two years to get quality in that product.

    Frank Langfitt
    Again, the UAW’s Bruce Lee.

    Bruce Lee
    Oh, I was so proud of them, you can’t believe. The fact that they did it didn’t surprise me that much, but how quickly they did it did. It was amazing.

    Here were these same people who before, I mean, were– hell, they’d go out of their way to make life miserable for General Motors particularly. And, you know, they were old, they were fat, because that was not a young workforce that we brought in here.

    Frank Langfitt
    The numbers coming out of the NUMMI plant were astonishing. Again, here’s Jeffrey Liker.

    Jeffrey Liker
    The best measure they use is how many defects are there per 100 vehicles. And it was one of the best in America. And it was the same for the Toyota cars that were made in California as the Corollas that were coming from Japan, right from the beginning.

    Frank Langfitt
    Maryann Keller, a long time car analyst, devotes a chapter to NUMMI in her book about the rise and fall of GM, Rude Awakening. After just three months, she says, the cars coming off the line were getting near perfect quality ratings. And just as important for GM were the cost savings.

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