What Kind of Company Is Tesla Motors?

What Kind of Company Is Tesla Motors?

Tesla Motors crafted a response to Mercury News article, entitled “The Hidden Workforce Expanding Tesla’s Factory”

At Tesla, we aspire to operate on the principles of hard work and exceptional performance, but always tempered by fairness, justice and kindness. There are times when mistakes are made, but those are the standards to which we hold ourselves. With respect to the person at the center of this weekend’s article in the Mercury News, those standards were not met. We are taking action to address this individual's situation and to put in place additional oversight to ensure that our workplace rules are followed even by sub-subcontractors to prevent such a thing from happening again.

Gregor Lesnik was brought to the Tesla factory by a company called ISM Vuzem, a sub-contractor brought in by Eisenmann, the firm that we hired to construct our new, high-volume paint shop. We contracted with Eisenmann for the simple reason that we do not know how to build paint shops and they are regarded as one of the best, if not the best, in the world. In our dealings with them, we have found them to be an excellent company, run by good people.

The article describes how Mr. Lesnik came to this country, the conditions under which Vuzem employed him and others to do their work, and how Mr. Lesnik ended up being injured while on the job. Assuming the article is correct, we need to do right by Mr. Lesnik and his colleagues from Vuzem. This is not a legal issue, it is a moral issue. As far as the law goes, Tesla did everything correctly. We hired a contractor to do a turnkey project at our factory and, as we always do in these situations, contractually obligated our contractor to comply with all laws in bringing in the resources they felt were needed to do the job.

Regarding the accident that resulted in Mr. Lesnik being injured, Cal/OSHA (the government regulator that investigates workplace accidents like these) came to our factory, investigated the incident and found that Tesla was not responsible. When Mr. Lesnik brought a workers compensation case, Tesla was dismissed from the case because the judge concluded that we had no legal responsibility for what occurred.

All of that is fine legally, but there is a larger point. Morally, we need to give Mr. Lesnik the benefit of the doubt and we need to take care of him. We will make sure this happens. We do not condone people coming to work at a Tesla facility, whether they work for us, one of our contractors or even a sub-subcontractor, under the circumstances described in the article. If Mr. Lesnik or his colleagues were really being paid $5 an hour, that is totally unacceptable. Tesla is one of the highest paying hourly employers in the US automotive industry. We do this out of choice, because we think it is right. Nobody is making us do so.

Tesla will be working with Eisenmann and Vuzem to investigate this thoroughly. If the claims are true, Tesla will take action to ensure that the right thing happens and all are treated fairly.

Creating a new car company is extremely difficult and fraught with risk, but we will never be a company that by our action does, or by our inaction allows, the wrong thing to happen just to save money.

church70 | 16 mei 2016

Almost any company in North America could be blamed for this I don't think it's uncommon for third-party companies to do this if you look into it. At the end of the day it's not Tesla fault just like it wouldn't be any other company's fault. Would it be apples fault if they hire a third-party company to clean the hallways and then they find out The company they contracted is using the same loopholes No it's not their fault

EdwardG.NO2CO2 | 16 mei 2016

If it's OK for Donald Trump to do it why shouldn't Tesla do it? Bump Dump Adump....(͡° ͜ʖ ͡°)

EdwardG.NO2CO2 | 16 mei 2016

Seriously, I read this story and guessed it was a subcontractor issue, but the payroll record checking statement in the article confused me! Good for Tesla saying what they did!

SMinnihan | 16 mei 2016

Tesla is exactly like most big companies - we don't hire illegal low wage workers, but we can't control who our contractors hire, and we have plausible deniability and a good PR group when our contractors get caught. Pathetic.

EdwardG.NO2CO2 | 16 mei 2016

@SMinni...when are you going to learn to read?

SbMD | 16 mei 2016

@SMinnihan = troll

omega | 16 mei 2016

I must say this is the first time since we started to admire Tesla, when we don't feel that good about it. They dropped the ball here...

NKYTA | 16 mei 2016

SMinni == swat!

AoneOne | 16 mei 2016

Until they publish the findings of the published study and the actions, if any, that are taken in response, it's all words. I can't say if they should have done more already, but now that they are aware, the follow-up is the important thing.

NKYTA | 16 mei 2016

If they go as the SvC goes, this will be a win.

Shesmyne2 | 16 mei 2016

The kind I have no problem supporting.

Still Grinning ;-)

jjs | 16 mei 2016

+1 Shesmyne2

robgorman | 16 mei 2016

Tesla's response to the SJMN article is why I will only buy their vehicles. An American company doing the moral thing when no legal obligation exists is rare indeed.

church70 | 16 mei 2016

I don't know I guess I better read the article again I I just don't see where there's a moral problem for Tesla at all. Can somebody enlighten me lol

Drdpharris | 16 mei 2016

Workers (even though indirectly x 2) were being underpaid, averaging $5/h. (California must have a minimum wage above $5/h. )

In addition, the subcontractor is employing foreign workers to the detriment of US workers by abusing visa regulations.

These are morally objectionable.

(They are also illegal but Tesla was found not legally responsible by the court.)

omega | 17 mei 2016

@Drdpharris +1

JayInJapan | 17 mei 2016

Are you and/or your clients short Tesla (TSLA) stock? It's time to come clean regarding your motivations on these fora.

dborn | 17 mei 2016

Yes, but not Tesla. Objectionable on the part of the subcontractor.

sklancha | 17 mei 2016

Back in the peri 9/11 timeframe, when we had a sudden increase in military post security- they changed the way we gained access to Fort Bragg and other military installations. In the process, Fort Bragg learned that they had 'illegal aliens' working there (subcontractors/sub- subcontractors...).

Was the government knowingly hiring illegals in order to save money and take jobs from the legal/local economy? Is it reasonable to presume that the most economical contractor bid is more likely to have poorly paid and/or illegal workers? And IF (big IF) the government, Tesla, or any other presumably unintentional [indirect] employer of illegal workers pays a fair amount to the contractos- and those contractors choose to keep the lion's share- which leaves an inadequate amount to cover the workers pay and [in this case, medical] expenses... Should the end employer be responsible? If so- then would that encourage other contractors/subcontractors to continue the same practice (I keep the money for myself, cuz if something goes bad- someone else will fall).

Legality aside (I know that is a BIG aside)- $5/H is excellent pay for a worker from that part of the world, which is why it is easy for these contractors to fill those slots. A worker coming here for 6 months of temporary contract work, can probably take care of their entire extended family for a year or two off those earnings. I'm not advocating breaking the law- just looking at another angle...

jfingas | 17 mei 2016

I see it this way:

Tesla distancing itself from legal responsibility isn't so hot, but the sheer directness of its planned response -- we'll fix it anyway, and this is never acceptable -- is appreciated and important.

mbb | 17 mei 2016

I applaud Tesla's response. It's a moral responsibility to get things right. That stands out compared with companies like Apple, which does not bother to make their products in America in the first place | 17 mei 2016

Makes you wonder what the subcontractors at SMinnihan's company are paid to add FUD (Fear, uncertainty and doubt) to forum listings. Perhaps they should be investigated...

SamO | 17 mei 2016





jordanrichard | 17 mei 2016

Though I applaud Tesla on this, however to the question of how to control who your contractor hires, that is easy. In the contract it should stipulate that if any illegals are hired or workers are paid less than min wage, the contract will be terminated and the company will not receive any outstanding payments due.

Drdpharris | 17 mei 2016

@jfingas --- it is not really accurate to say that Tesla is distancing themselves legally, they have been found not legally responsible by court as a fact of law. I do agree that future contracts show have financial ramifications if laws are broken. Would level the playing field for 'honest' bidders.

sauce | 17 mei 2016

Tesla is writing textbook material in their way to handle PR/image crises with this quick, pointed and proactive response.

Gotta love it seeing how the likes of GM, Toyota and VW have (poorly) handled the heat when they were being scrutinized for their shortcomings. I'm sure we could add many other companies to the list of poor PR/ image control.

ram1901 | 17 mei 2016

@jordanrichard & others on the edge of being critical of Tesla...
You can have all the hiring rules in the world for your sub contractors but there is really no way
to police such rules without invading another company's privacy. You'd have to be given full access to their payroll and HR records. Not gonna happen.

Tesla is and was completely faultless in this case but has publicly apologized for what a subcontractor may or may not have done and plans to do the right thing should the facts support the story.

This story, which has been picked up by many pro ICE anti EV media publications and deliberately mis-reported, is just another hit piece likely funded/leaked by those who see the disruptive threat of a company like Tesla.

Think about it, a worker has an accident on a job site and later files a suit and a newspaper ends up doing a major hit piece on Tesla based on it. Do you realize how many worker comp accidents there are daily throughout the U.S. I'd hazard to say there are thousands.

Now tell me, why aren't we reading about all the questionable details of those incidents? Trial lawyers thrive on this stuff.

As a retired media exec., I know of what I speak.

sklancha | 17 mei 2016

GM can make the headlines for successfully showing that it is still the Goliath in Conneticut, blocking little Tesla from those bid, scary direct sales. Tesla can make their headlines with the proactive, ethical, and pointed handling of the negative PR regarding the subcontractor scenario.
Winning the hearts and souls, while GM proves to be monster, compliments of chapter 11