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Someone isn't happy at Tesla's factory in Fremont / or agitating for union?

Someone isn't happy at Tesla's factory in Fremont / or agitating for union?

Link: http://jalopnik.com/tesla-employee-blasts-company-on-medium-over-work-in...

1. Union = An important reason why lot of companies want to move out of California?
2. Maybe this is a main reason the gigafactory is in Nevada instead of California?
3. If he isn't happy at Teslia, why stays? Why not just look for another job? Or create his own company?
- i.e. My life: I am not happy being an employee, so I became self-employed consultant.
4. Anyway, will this gets messy and delay production at Tesla's Fremont factory?
- Especially with the high expectation of the Model 3 releases.

Bubba2000 | February 9, 2017

Tesla is barely breaking even. Union is likely to drive wages up, as well as introduce restrictive rules that decrease productivity. Tesla will be motivated to design the cars to maximize automation, reduce labor, outsource components to low cost states or even Mexico. Ultimately, build factories in countries with low labor cost like Mexico, China, Vietnam, India,.. especially to supply foreign markets.

Many of these countries are willing to offer disciplined low cost labor at $1/hour, low taxes, loans, dirt cheap land. Just ask Apple! Making tons of money and not paying taxes!
.

Bubba2000 | February 9, 2017

Tesla is barely breaking even. Union is likely to drive wages up, as well as introduce restrictive rules that decrease productivity. Tesla will be motivated to design the cars to maximize automation, reduce labor, outsource components to low cost states or even Mexico. Ultimately, build factories in countries with low labor cost like Mexico, China, Vietnam, India,.. especially to supply foreign markets.

Many of these countries are willing to offer disciplined low cost labor at $1/hour, low taxes, loans, dirt cheap land. Just ask Apple! Making tons of money and not paying taxes!
.

DonS | February 9, 2017

One loudmouth isn't exactly a compelling case. It sounds about the same as the shorts on Seeking Alpha. Ho hum.

If there are hundreds, or even a dozen, employees that can point to specific issues, then Tesla would need to consider what to change.

McLary | February 10, 2017

Wow what a story. If this guy has worked there for 4 years, and only now is trying to start a union, then what Elon Musk says is the worst kind of smear campaign.

“Our understanding is that this guy was paid by the UAW to join Tesla and agitate for a union. He doesn’t really work for us, he works for the UAW,” Musk wrote. He added in a separate response, “Frankly, I find this attack to be morally outrageous. Tesla is the last car company left in California, because costs are so high. The UAW killed NUMMI and abandoned the workers at our Fremont plant in 2010. They have no leg to stand on.”

Tesla claims to be union neutral, but EM sure sounds anti-union.

David N | February 10, 2017

In the beginning (think coal mines, sweat shops) Unions were formed because of poor, abusive management(treatment of workers, wages) I don't think that can be said today.
When Unions and management work together it has the possibility of being good.
Unfortunately because of power and greed, both sides seem opposed to working for the common good of the company and the employees. That's too bad.
Is Elon "anti union" ?
I don't think so, and he has indicated that, I think he is "anti subversive", someone sneaking in with the deliberate intention of creating tension between current employees and management. Elon seems to be a person with high regard and respect for others, I don't think I could apply those same qualities to the group that sends someone on a subversive mission with a known objective.
If there is abuse of employees at Tesla, there are agencies that are in place to deal with them.
If it's simply because the Union wants to "get in there" then that in itself is not justified. Employees can ask for changes at work. Or they are free to leave.
In the end, I would hate to see Tesla have to unionize when there was not really a need for it.
If I sound anti union, I apologize, where there is power, there is abuse. ( that goes both ways for sure).
I'd like to see unions and management work together for the good of the company which in turn becomes the good of the employees.
Sure looks like currently it looks to be working just fine, don't fix what isn't broken!

KP in NPT | February 10, 2017

My company has been going through a decades long union drive - we are currently on #5 I believe. My company is the only one in the industry that is not union.

What I will say - it is very hard for us on the outside to really know what the real situation is. Both sides give their media statements and based on personal experience, I can see through the bullshit. (from both sides.)

One example is this "paid UAW" claim - this is a common one from union busting companies. They follow a playlist, both to media and to workers, often orchestrated by union-busting firms they pay millions to. Is there a Tesla worker who is leading the campaign and is paid by UAW? Possibly - but rather than being a "plant", it is more likely he is just an employee who is leading the effort (there is always a leader), and who in doing so received training from UAW on how to organize (legalities, effective methods, etc.) and is compensated for his organizing time outside of work (phone banking, door to door visits, visibility tables.) It can actually be a full time job in itself. I know because I did it for several years until I burnt out. And he (and the whole campaign) is probably getting help from UAW members (solidarity and all that.)

Here is the bottom line: workers will not seek unionization unless they feel they are not being heard, if they feel there are abuses occurring and/or they feel they are not compensated fairly for their hard work. The reason my company is the only one to be non union is because for a very long time, we had none of those complaints. Times have changed - bigly - and the only thing that has kept us non union now is literally tens of millions (possibly approaching hundred million) spent on anti-union campaigns, legislation making it harder for us to call a vote (yes, my company actually got this passed) and false accusations of forged cards meant to impugn the union attempting to organize us.

It is an ugly, bitter fight. The best thing Tesla can do is really listen to workers and improve conditions so they don't feel compelled to sign a card.

mdd | February 10, 2017

@KP in NPT

+10

Unions have a place, and an important one. Even if you're not in a union, every benefit you have exists because a union fought for it. If you don't like unions, just remember that happy workers don't join unions.

DTsea | February 10, 2017

Unions have a playbook too, on how to provokr management to create us v them atmosphere. AFL-CIO publishes it.

Jarvis1 | February 10, 2017

I'm confident that it will work out in the end. Everybody just needs to work together to find a solution. The company survived this long, I can't imagine Elon, who used to live in his office at Paypal, because it was cheaper and shower at the YMCA, not treat his factory workers with respect. However, these problems are inevitable as the company grows.

As for his comment about how the UAW killed NUMMI in 2010, well it might have to do with this:

" https://www.wsws.org/en/articles/2010/02/numm-f06.html "

codyb12889 | February 10, 2017

I feel like if an employee at any other company were to make claims like this they would not even get a phone interview with a blogger. As we have come to expect anything bashing Tesla is heavily promoted by nay-sayers and shorts.

So far everything that Elon has said in response to these claims adds up much more than what this guy is claiming. If he is being paid by the unions to infiltrate Tesla I hope that enough evidence can be gathered to take them to court for the various laws that would be getting broken by this activity.

IF the things he claims are true then I hope other employees speak up and get the issues fixed. I will never argue that a company should be forced to pay more as the job market will dictate that itself but unsafe working conditions are something that would make me unwilling to support a company no matter who they are.

rgrant | February 10, 2017

Perhaps the employee parking chaos at the Fremont factory is a factor ;)

dyefrog | February 10, 2017

Not a fan of Unions however my experience has shown that when someone risks their livelihood to speak up, you may want to listen. This could be a teachable moment and provide the teeth behind the statement that Tesla "listens to their employees". At least hear him out, he may have some valid points but dismissing his concerns without cause doesn't strike me as "caring". I encourage and am grateful for any criticism from those I work with. It's just a healthier position from both sides and would most likely take the steam out of a Union presence.

McLary | February 10, 2017

"General Motors ended its participation in NUMMI in June 2009 as part of its forced bankruptcy at the hands of the Obama administration. Toyota then announced it would no longer continue operations there as of March 2010, blaming GM’s unilateral withdrawal from the partnership."

rxlawdude | February 10, 2017

@McLary " its forced bankruptcy at the hands of the Obama administration."

Quoting Breitbart or Drudge? That's conservatarded revisionism.

KP in NPT | February 10, 2017

@rx, Seriously.

SamO | February 10, 2017

A new poll with Donald Trump supporters suggests that at least half of them believe that the president’s immigration-restricting executive orders are justified, due to the nonexistent Bowling Green Massacre. And probably should not be trusted with sharp objects.
http://www.publicpolicypolling.com/pdf/2017/PPP_Release_National_21017.pdf

SO | February 10, 2017

GM put themselves into that position. Had they run their business better, they wouldn't have asked for a bailout either. But fortunately, it worked in Tesla's favor. I'd rather see Tesla's being built at NUMMI over what was built there before.

McLary | February 10, 2017

I was quoting directly from the article linked above. The source is the exact opposite of right wing revisionism.

The real revisionist history is claims that "GM put themselves into that position" Apparently the worldwide financial crisis had no bearing whatsoever.

carlk | February 10, 2017

The NUMMI plant was god sent for Tesla. You can say everything happened at that time was meant to be. On the other hand Tesla is not what is was years ago anymore. A number of states or countries would welcome Tesla with open arms and financial incentives if Tesla is interested to move there. I just hope Tesla Fremont workers will not get what they wished for. I'm sure most of them know better. You'll go back to work for night shift at Safeway at half the pay if Tesla goes away. But who knows this could get Elon to start thinking. Terrible thing for that guy to do.

And this guy is like politicians. He's not doing this for the benefit of his fellow workers even that's what he's saying, He's doing this for the benefit of himself and his union friends. According to the story in today's Mercury News he's an old NUMMI worker when it was under the UAW. He has not list a single fact about how Tesla abused him or other workers other than over time. That's not unusual for any companies not to mention workers in general do like the 1.5 to 2x over time pay. Beats having to work a second job at much lower pay. And he complains that he has to drive from Manteca to work. Huh? When was that the employer's responsibility? Is the union going to buy you a million dollar home in the Bay Area?

carlk | February 10, 2017

Here is a story 3 years ago. Union has been trying to organize Tesla for a while now.

http://www.thetruthaboutcars.com/2014/01/uaw-sets-up-organizing-committe...

SO | February 10, 2017

@McLary - Of course the downturn had something to do with it. But a poorly run company that over extended themselves on gas guzzlers back when gasoline prices were going up, is a bigger reason for their failure. The economic downturn just exposed their problems.

Captain_Zap | February 10, 2017

@cark

The stock was in the middle of a nice run up when that article came out.

Al1 | February 11, 2017

UAW looks like another arm of NADA. Unions are main force driving US manufacturing jobs out to China and Mexico.

In the statement UAW has said Moran and others have approached the union. “We welcome them with open arms,” the UAW said.

The UAW has largely failed to organize Japanese, German or Korean auto plants in the U.S. The union used to represent workers at the Fremont factory when then-General Motors Corp. and Toyota Motor Corp. occupied the facility. Moran said he worked at the plant under Toyota and GM in the 1990s.

Moran wrote in his post that Tesla pays production workers between $17 and $21 an hour on average, less than the living wage necessary for the high-cost Bay Area. He also cited problems with production including machinery that’s hard on employees’ bodies to operate.

“The issues go much deeper than just fair pay,” he wrote. “Injuries, poor morale, unfair promotions, high turnover, and other issues aren’t just bad for workers -- they also impact the quality and speed of production. They can’t be resolved without workers having a voice and being included in the process.”

carlk | February 11, 2017

Good point Captain. Whatever the reason I can already see their efforts will be totally wasted.

Just want to add I am, or was, very much pro-union but I only look at the bigger picture. Unions have been the only political force that is strong enough to fight the corporate money. Over the years many pro-labor legislation were implemented that would never have happened without them. I don't like some of those company politics that pitches workers against managements that does no one any good though. That's even more true in current environment that labor laws have already given workers a pretty complete protection. A consequence is union's political influence is not as significant as it used to be. On top of that Trump got elected largely because some of those used to be solid Democrat union votes went to him. Now that he has the power to turn back many of those labor and consumer protection laws it looks that he will put a full force on doing that. It's really an unfortunate irony.

Al1 | February 11, 2017

Not sure how exactly Unions are useful these days. They seem to block any positive change within the organisation until it is pretty much too late and the whole plant needs to be shut down.

Deeper than just pay necessary for the high-cost Bay Area.
Machinery that's hard on employees' bodies
Injuries
Poor morale
Unfair promotions
and
High turnover

Yeah, right. Exactly what Tesla is known for.

carlk | February 11, 2017

Al1 So true. Elon have never said he's against the union, he said he's neutral on that, but he's mad when union and this guy started to use the guerrilla tactic and made many untrue or unfair accusations. He can never stand what he thinks is unfair accusation of him and his company.

The union's statement is very vague too. It only says the guy is "not on its payroll" and it has open arms for Tesla workers to join the union. The thing they did not say is whether it has any knowledge or participated in the blog the guy wrote and made any promise to the guy if the union is successful in organizing Tesla workers. If so this guy is working for the union even if he's not on the union's payroll yet.

carlk | February 11, 2017

And like I said safety issues are pretty much covered by very strict CA laws already. All a worker needs to do for any concerns it to go to the HR. Believe me HR will see to it that problem is communicated to management and resolved right away. I've seen one HR executive got fired when he mishandled a complain and the worker filed a class action lawsuit that cost the company millions.

As for the rest complains aren't those common in every place? Just go find a better place to work. The issue may be you if you couldn't find one. I know for sure Tesla is a better place to work than my company. There are many workers here went to work for Tesla over the years. There was never one from there who wanted to come here. And we are a pretty nice high tech company too.

SCCRENDO | February 11, 2017

Unions have a purpose. When workers are happy they do they their work and don't complain. When they get frustrated with working conditions they tend to unionize. It applies to all aspects of life. When we integrate and unite and have a common goal we all work together. The most disconcerting thing about our new regime is their desire to divide the population. This results in dissatisfaction on both sides. Trump's strategy of alienating Muslims will lead to more terrorism not less. The failing on the part of the Democrats over the past few years was alienating "the basket of deplorables". They thus unionized and elected the union boss Trump.

There is less of a tendency for workers to need to unionize in California because of stronger labor laws. Elon apparently does pay lower wages and is more demanding of his workers. Many will join the company because of the incredible experience obtained there. He is also mechanizing to decrease the requirement for unskilled labor. However he still does run a serious risk of his workers unionizing.

tomliuxd | February 11, 2017

Since the first day, UAW always wants to unionize the Tesla Factory. They used to demonstrate at the factory and tesla shop every day.

Mike83 | February 11, 2017

I heard that the protesters hired were hired from Craigslist and paid very little. They weren't even Union members.

Bubba2000 | February 11, 2017

Tesla will soon have GFs in various countries with low labor costs like China, India, EU periphery, etc. These GFs, including the one in NV, could produce all models. The factory in CA could become irrelevant and transformed into R&D center to take advantage of the hi tech in the area. At some point Tesla could sell the land for $1+B cash. UAW will once again kill the goose that laid golden eggs.

mschaffer11 | February 11, 2017

All these anecdotal stories from anonymous people are useless for making good decisions.

SCCRENDO | February 11, 2017

Question will be how Trump will deal with imports back from China and India. Those factories may only be able to be used for overseas deliveries.

johnse | February 11, 2017

Tempest, meet teapot.

According to an article that did more reporting rather than retweeting, the wages at Tesla are in the same range as UAW Tier 2 wages. UAW was forced into the two tier scheme in an earlier downturn and have been trying to eliminate it since. The lower wages are in line with the other non-unionized auto plants. Source: http://finance.yahoo.com/news/union-least-teslas-problems-could-17582779...

Furthermore, those other plants do not have stock option plans. The UAW plans try to get profit sharing agreements, but that is quite different. Tech sector companies like to focus on "total compensation" when comparing payrolls with competitors. The nice thing for the company is that the cost of options are a deferred cost. Nice thing for workers is that they can be highly rewarding if the company does well.

Even with all that said, if they were forced to add $11/hour to their 5000 workers, and assuming they are working 60 hour weeks with 1.5x overtime pay, that comes out to a little less than $200M/year. Yes, it would have an effect on the bottom line, but it's not going to sink the company. At 100,000 cars per year (their current run-rate on the S/X line) that adds $2,000 to the cost of a car.

Tesla can likely point to the gains their workers have made on their options and point out they wouldn't have them under a union contract. The UAW has a job ahead of them to convince the workers they would be better with a union. So far they have been unable to do so with the USA factories of foreign automakers even though they are also paying the lower tier 2 wages.

Jeff Hudson | February 11, 2017

I would appreciate reading a comment from the viewpoint of a satisfied Fremont, CA Tesla line worker.

SO | February 11, 2017

Check out Glassdoor for Tesla.

carlk | February 11, 2017

@ticobird Good question. The San Jose Mercury News certainly did not do a good juarnalist job by publishing only one persons view without interviewing other workers. The question is still why this guy needs to publish a blog or talk to reporters if his view is shared by most Tesla workers? He could easily get his union votes if that's the case. Public opinion does not earn him even one vote.

mdd | February 11, 2017

@johnse

Options are not a deferred cost. They are a non-cash cost, but they do dilute shareholder value.

Mike83 | February 12, 2017

I know several employees of Tesla who love working there and this guys opinion is rare. If the they really wanted to unionize they would have already done it. The motives are too obvious and dishonest.

dchuck | February 12, 2017

+1 Carlk and Ticobird

In the original article the employee says "A few months ago, six out of eight people in my work team were out on medical leave at the same time due to various work-related injuries."

That should be an easy thing for a newspaper to verify, "medical leave" means paperwork. If this statement isn't true then it calls the whole article into question.

I work in construction, as dangerous an environment as manufacturing. Believe me if 6 out of 8 workers on one crew were injured someone would lose their $hit. First you cannot take the chance with someone getting seriously hurt. You would get sued into the poor house if the employee could prove that you could have fixed a safety issue before his injury occurred. Second, even if you only care about the bottom line, if 75% of your workers are off sick your going to have serious productivity issues.

Uncle Paul | February 12, 2017

I was just at the Fremont, picking up my Model X. They offered me a factory tour, where we were driven around the more interesting parts of the working plant, and had the opportunity to observe the amazing combination of human workers and automated robots.

The robots do most of the heavy work that used to wear down the workers. Many of the workers were still doing some repetitive jobs using muscles, but where possible the robots did the heavy lifting.

The place was clean, uncluttered, with lots of obvious safety screening and programs in effect. I used to work in Detroit, and those factories were much more brutal, noises, smelly and generally more dangerous than Fremont.

I am sure that someone can always make some loud complaints about worker suffering, but generally this place looked like a pretty good place to work. They had a nice restaurant, workout room and even offered free Yoga classes for those interested in getting healthier or relaxed.

I have a relative that works there. He works long hours, and often is called upon to work on complex problems, where the pace is pretty demanding, but his attitude is fantastic, and he feel that he is making a significant contribution to the success of the overall company. I feel that he would not benefit from Union membership, as it would just bog him down trying to make his department as good as it can be.

He is not a cool aid drinker, and often feels challenged, but would not want to work anyplace else in the world.

Elon is a silicone valley guy. He wants to change the world for the better. While he wants to stay in Fremont, if the Union thing will jepardize the success of his mission statement he will leave and never look back.

Haggy | February 12, 2017

"Elon is a silicone valley guy."

Is that where valley girls come from?

brando | February 12, 2017

Google search

auto worker pay Germany vs US

No need for me to comment, you can all read, right?

brando | February 12, 2017

another suggestion

German corporate governance

a one page article
http://www.sglgroup.com/cms/international/investor-relations/corporate-g...

McLary | February 13, 2017

"Check out Glassdoor for Tesla"

I have read dozens, if not hundreds of glass door employee reviews, and they are not flattering to Tesla. Many workers are "temporary" but must work 60-70+ hours per week. Even those with status must wait 4 years for a very small pool of stock options to vest. Then they will have to come up with money to pay taxes on the options.

Only Elon Musk, his family, and insiders, get millions of options at little or no cost.

Earl and Nagin ... | February 13, 2017

@McLary,
That is pretty much standard practice in Si Valley. Only the early guys (way pre-IPO) actually get rich but the rest may get little bonuses if they stay for a while and the company does good. It tends to be a small incentive for the long work weeks.
Of course, there will always be those who think (or are convinced by others) that they can get what they want by simply trying to hide under the skirt of a union without the extra work with no guarantee for a payoff.

johnse | February 13, 2017

@McLary "Even those with status must wait 4 years for a very small pool of stock options to vest. Then they will have to come up with money to pay taxes on the options."

(Sigh)
That is how stock options work (NQSO https://en.m.wikipedia.org/wiki/Non-qualified_stock_option) for the most part in the tech industries. You are granted a pool of options that then vest over a period (often 4-5 years), usually at 6 or 12 month intervals. The option price is usually set to the FMV at the time of the grant (sometimes an average of the first month, or other variations).

At the time of an exercise, the holder buys the shares for the option price. The difference between the FMV and the option price when exercised is considered taxable income and the company is required to withhold 20% Federal income tax on this taxable income. This is reported on the employee's W-2. A very common way to handle this is with a single transaction in which enough of the shares are simultaneously purchased and sold to cover the entire option price and the tax withholding. Or, if the employee prefers, they can pay the option price plus the withholding and get the full amount of shares.

In either case, The Basis for the shares received is the FMV at the time the shares are purchased--not the option price.

This is from my experience as an employee at many tech firms where I have received such options. And yes, there are times when the options are worthless if the option price was set during a peak and the price has dropped. In that case hold them as options and hope the price recovers before the options expire.

Elon had to do exactly the same dance last year. His (very large number of) options needed to be exercised and he needed to sell a large number of them to pay the option price and taxes. It represented such a large number of shares that it was consolidated with a capital raise.

To complain that this is somehow Tesla being unfair to their workers is simply ingenuous.

I am not making any judgement as to the merits of either side in this dispute. My tempest in a teapot comments are only that this should not materially affect Tesla.

johnse | February 13, 2017

@mdd
At the time of an option grant, they are a deferred cost and considered a liability. I am not an accountant, so I don't know if they become a cost at the time of vesting or exercise.

Some companies satisfy options from new stock not previously traded. Some from shares the company has purchased in stock buybacks. Again, I don't know if the latter is considered a dilution or not as the shares are already outstanding, just owned by the company.

carlk | February 13, 2017

"Only Elon Musk, his family, and insiders, get millions of options at little or no cost."

Elon put all his money, $200 million of it, into Tesla and SpaceX. During the financial crises in 08' both companies were struggling and were on the brink of bankruptcy. He was days away from becoming penniless. There would be no Tesla or job for those workers who did not risk even one dollar on the company if Elon did not take the risk.

SCCRENDO | February 13, 2017

This works in multiple different kinds of businesses. Stock options are income and taxes need to be payed. As partners in our medical group which is private not public we get free shares in our buildings. We have to pay for it but get reimbursed. This is considered taxable income. It takes 3 years to become a partner to receive anything and it takes a further 14 years to fully vest. Our vesting increases 25% every 3-4 years. So if you leave before, you lose a part or all of your ownership. It is like "golden handcuffs" encouraging you to stay. Once you fully vest the payout can be excellent. We have something similar with partnership is other aspects of our group. Now these kinds of things are above and beyond earnings. Kaiser Permanente offers something different in that you get a pension which only vests after 10 years. But you can retire on I think 2% times the number of years of service as a percent of final salary. The state and county and other large corporations offer similar things. Public funded companies offer stock options. If it happens to be Google or Apple you can clean up. We all expect the same from Tesla. So I guess you can only judge what Tesla does by understanding the full package. In the long run all these things seem to be a wash with their main purpose trying to encourage longevity in the workplace.

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