Pay Cuts, Furloughs Inbound at Tesla

Steph Willems
by Steph Willems
pay cuts furloughs inbound at tesla

At the dawn of the new year, it seemed Tesla was finding its groove. Production flowing well, some past headaches ironed out, a Chinese plant up and running, a potentially lucrative crossover ready to go, and back-to-back black ink on its quarterly earnings reports.

Hoping to safeguard its future, the automaker is now prepared to furlough workers for the coming month and slash salaries thereafter.

The info comes via an email, seen by Reuters, that was sent to Bay Area and Buffalo Tesla employees late Tuesday. In it, Valerie Capers Workman, the automaker and solar roof tile maker’s in-house counsel, said domestic production will resume May 4th.

Tesla isn’t alone in picking the first week of May as a target for factory restarts. Yesterday brought news that Honda, Nissan, and Fiat Chrysler were also eyeing a beginning-of-May resumption.

In the email, Workman said non-essential employees — those who can’t work from home, or aren’t tasked with a crucial factory tasks in the interim — will be furloughed until production returns, with healthcare benefits staying in place. For the white collar crowd, pay cuts will begin April 13th, both in the U.S. and overseas.

Here, salaried workers will see a 10-percent pay reduction, with directors receiving a 20-percent cut. Vice presidents are tapped for a 30-percent cut. The reduction in pay will continue until the end of the second quarter of 2020, Workman wrote.

At last report, the automaker said its cash position was sufficient to weather the coronavirus storm; however, the production shutdown will hamper deliveries of what’s expected to become the automaker’s best-selling model — the just-introduced Model Y. Production of that vehicle began in January.

[Image: Tesla]

Join the conversation
  • Cprescott Cprescott on Apr 08, 2020

    There will be no reductions. Each will get the money back - call it delayed compensation. There is nothing here other than the luxury golf cart producer still makes cars that cost a lot and make their payoff less remarkable over a comparable class vehicle. And these aren't even luxury cars! If these were as efficient as they are told to be, the 0-60 performance would not be important and all of the time spent would be to build electric cars that can go 500 miles on a "tank" like my 2016 Hyundai can do.

    • See 5 previous
    • Flipper35 Flipper35 on Apr 09, 2020

      @ajla It would make up for the 45-60 minute wait for it to recharge. I think if they got the recharge time down to 10 minutes with an infrastructure similar to gas stations, even with a 200 mile range, they would sell very well.

  • EBFlex EBFlex on Apr 08, 2020

    Hopefully this Corona cold going around will be the final nail in Tesla's coffin.

    • See 7 previous
    • SCE to AUX SCE to AUX on Apr 09, 2020

      @EBFlex No disagreement on those items, but none of them are putting Tesla close to insolvency. They were (barely) profitable last year.

  • Inside Looking Out Inside Looking Out on Apr 08, 2020

    All, I can assure you: Tesla will survive. And you know what to do with these nails.