Just last week, amid their Model 3 "production hell," Tesla shocked the auto world with news that they would be firing hundreds of workers. Of course, firing seasoned production staff is somewhat atypical for a 'growing' company (shrinking cash flow aside) that was already having difficulty meeting their own production schedule. Of course, the irony was apparently 'lost' on Tesla who tried to dismiss the mass firings as "performance-based terminations." Per Capital and Main:
Tesla announced the firings, which are reportedly still continuing, last week. Though no official number of terminations would be given, estimates range from 400 to 1,200. The company did not give advance notice under the WARN Act because, it insisted, they were performance-based terminations, not layoffs. “Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved during the performance period,” said a Tesla spokesperson in an emailed statement. “As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures.”
As it turns out, we're not the only ones who were surprised by Tesla's mass termination event as laid off workers are now coming forward to say the decision was nothing more than an attempt to break up unionization efforts at the company's Fremont, CA plant and replace seasoned employees with cheap, temporary contract labor.
Those are the questions the labor organizing campaign at Tesla is asking, after the company issued a wave of terminations, allegedly linked to performance issues among its 33,000 employees. Several members of the campaign, known as A Fair Future at Tesla, were among those fired, and they all claim to have had excellent performance records. None have been able to obtain the negative reviews that were supposed to be the rationale for their firing.
The terminations struck many as strange. Tesla wants to ramp up production of the highly anticipated Model 3, a more affordable electric vehicle. CEO Elon Musk set a goal of 20,000 completed cars per month by this December. But in the third quarter of 2017 Tesla finished just 260. Musk has cited “production bottlenecks” for the poor output. But firing workers and retraining replacements seems a hindrance to, not an improvement on, this goal. Also, Tesla fashions itself a high-growth company, and mass terminations aren’t something high-growth companies do. Furthermore, fired employees claim they never had the kind of review that would explain the terminations. “I had great performance reviews. I don’t believe I was fired for performance,” said Daniel Grant, a production associate at the plant for three years. Grant claims he was injured on the job on a Friday, and fired the following Monday. “The company didn’t show me or others our most recent reviews when they fired us.”
Other production workers say their performance reviews were stellar but were dismissed after speaking out about "low pay, hazardous working conditions and a culture of intimidation at the Fremont plant."
Only when you understand Tesla’s labor issues does a more plausible explanation emerge. For months, Grant and other Tesla workers have spoken out about low pay, hazardous working conditions and a culture of intimidation at the Fremont plant. They have sought to affiliate with the United Auto Workers to win a voice on the job. While Tesla said that most of the exits were in administrative and sales jobs, at least some of them hit the factory floor. And many of these pro-union workers were among those fired, according to the Fair Future at Tesla campaign. That includes Grant, who said he wore union T-shirts on “Union Shirt Friday,” addressed safety issues in employee meetings and handed out informational fliers to colleagues.
Pro-union workers criticized the Model 3 ramp-up in August, saying that Tesla skipped test runs for the assembly line and predicting the company would likely institute forced overtime to keep on track. Both issues could lead to more injuries, the workers claimed. Grant believes that vocalizing these types of concerns about safety cost him his job.
Meanwhile, local advertisements imply that Tesla is seeking contract laborers who will start at much lower hourly rates and not receive health benefits...you know the benefits that Silicon Valley elites like Elon Musk demand that other companies must provide.
But a number of job fair listings spotted throughout the Bay Area suggest that Tesla will be replacing pro-union voices with contract labor. One such listing, through the temp agency Balanced Staffing, touts “hiring on the spot” for “a manufacture [sic] of electric cars in Fremont!!!” There are no auto facilities in that city other than Tesla. The listing says workers will make $18 to $20 an hour doing “repetitive motion” tasks, and that applicants “must be able to work 12 hour shifts.” The site of the job fair, in Modesto, is at least a two-hour drive from Fremont (the listing promises free shuttle service).
A similar Balanced Staffing listing on Craigslist for an event in Stockton, also a two-hour drive, again offers $18 an hour and says workers “must be open to any shift.” The entry-level wage is lower than what terminated workers with three and four years of service were making at the plant. Contracted work from a third party also likely means no benefits, certainly not the stock options offered Tesla employees. In addition to lower costs, independent contractors would be far less likely to join organizing campaigns.
It certainly appears that Tesla is attempting to increase Model 3 production with a temp labor force, while weeding out longer-tenured employees, at least some of whom were vocal about unionizing the plant.
Finally, the irony is that just as Musk is firing employees in the U.S., he offered 30% raises to workers in Germany...
Soon after Tesla fired hundreds of workers at its plant in Fremont, California, it managed to settle a problem with its German staff that could have been far, far worse. Things got off to a bad start when the boss of Grohmann resigned shortly after the takeover, and workers threatened to strike. They complained that once Tesla was their sole client—they used to supply a variety of automakers—they would face job insecurity. On top of that, they said they were getting paid 30% less than union rates.
Tesla will reportedly ramp up wages by about 30% and safeguard jobs till 2022. The previous offer of $10,000 in Tesla stock has also reportedly been accepted. “We have developed our own remuneration structure in very pragmatic discussions,” Uwe Herzig, the head of the workers’ council at Tesla Grohmann Automation, told Die Welt (link in German).
...a tricky situation which we anticipate might just draw the attention of a frequent tweet stormer in Washington D.C. who loves to speak out about unfair treatment of American workers...