There's some good news for employees of Tesla that haven't yet been laid off, and are burning the midnight oil working tirelessly for their visionary leader
Tony Stark Elon Musk: the company is now offering them personal loans that can be paid back directly from their paychecks, according to CNBC.
As if going into the insurance business (please clap) wasn't enough of a pivot for Tesla of late, the company is now also apparently going to try its hand in loansharking... to its own employees. The loans will be facilitated through London-based fintech start-up Salary Finance, and funded via its partner Axos Bank.
The plan is being pitched as a way for employees to "borrow money at relatively affordable rates", where the key word, of course, is relatively.
Salary Finance is in the business of letting workers borrow up to 20% of their salary and pay it back at rates under 5%, although the "under" tends to be loose. Tesla is referring to this plan as a "financial well being" benefit, as if charging employees 5% interest is somehow a convenience. Though, it doesn't surprise us entirely that a company with over $11 billion in debt is following this line of logic.
Tesla says that the plan is a way for employees to "handle their debt and expenses without turning to higher-cost alternatives like a 401k loan, credit cards with a high annual percentage rate, or traditional payday loans." Cynics have seen right through these explanations, and believe this is a way for the company to avoid its employees being "forced" to liquidate their TSLA stock, especially as it drops ever lower, and subjects an increase number of them to margin calls.
Current employees, however, don't seem to excited about the idea.
CNBC spoke to three employees who said that they view employee loans as a "band-aid". Maybe Tesla should promote these three employees to their accounting department for a couple days - sounds like they may be able to clean up some of the company's finances. Instead, employees are only asking for the basics: "more predictable income from a set, 40 hour work week" as Tesla is notorious for asking its employees to change hours, change departments and change schedules on the fly:
In recent weeks, for example, Tesla sent workers home early from their shifts after glitches at the Fremont car plant. In the production line under the tent at the site, conveyors have broken down at the point where cars are carried forward for “battery marriage,” where workers install heavy battery packs into the Model 3 sedans and join two halves of the cars together. Inside the main building, there have been troubles with camera calibration, where employees test the in-vehicle cameras on a Model 3 to make sure they are working properly in concert with sensors to enable Tesla’s semi-autonomous-driving features.
Tesla also told some workers not to come in to work at the Gigafactory during what employees described as unexpected maintenance and cleaning.
Six additional employees said that raises and bonuses typically "don’t cover cost-of-living increases." Other employees said that the company caps raises at about 2%, even for those with the best performance ratings by their managers. One employee recalled getting an annual raise of less than 1% and three shares of stock as a bonus after a year of "good, but not spectacular" performance.
Social media seems to be enjoying the news:
I haven't read details yet but I surmise it is loans against your shares so you don't need to add more selling pressure to the markets. $tsla— deltahedgejohnny (@deltahedgejohn1) May 2, 2019
And is it us, or does Tesla recently seem to be trying to tap into all different kinds cash flow ideas - except selling cars?