As if it were not bad enough, after all of the Federal money loaned or given to Tesla, it appears that the company has violated labor laws by using illegal foreign labor to expand their Fremont, California plant.
First Digital’s Bay Area News Group investigative reporters have accused Tesla Motors of employing foreign contract laborers at $5-per-hour, 10 hours a day, six days a week to expand its government-subsidized California auto plant.
In 2009, the U.S. Department of Energy in loaned Tesla Motors $465 million to open a plant for its all-electric Model S vehicle. Despite the $1 billion traditional automakers were paying to build and equip new auto plants, Tesla acquired the bankrupt General Motors “New United Motor Manufacturing Inc.” plant in Fremont California for $42 million.
In 2010, the company received another $20 million worth of saleable California corporate income tax credits to acquire the plant’s factory presses and other machinery for $17 million, and buy other equipment at a “fraction” of the original cost.
Although Tesla Motors has been unprofitable since opening the Fremont plant, it has collected $517 million selling government-mandated environmental credits to competing automakers and others. The cash has been used to fund operating losses, build out sales distribution, and add to the manufacturing facility.
Many Californians are shocked to learn that Tesla has been able to accomplish all of this this without being forced to sign contracts with the United Auto Workers’ Union.
But a lawsuit from an injured construction worker on the Fremont plant has exposed Tesla as hiring a foreign contractor in 2015 to ship 140 workers from impoverished Croatia and Slovenia to build a new paint shop at Tesla’s Fremont plant.
The Bay Area News Group, after dozens of employee interviews and extensive review of the contractor’s payroll, visa and court documents, concluded that the Eastern European contract employees “work long hours for low wages, in apparent violation of immigration and labor laws.”
It appears that our government has been a partner to this apparent violation of the laws, whether knowingly or unknowingly, via the B1/B2 business visa program.
Yet neither the contractors involved nor Tesla itself have accepted legal responsibility for the hiring practices, long hours and low pay. While most of the imported workers interviewed for this story said they are happy with their paychecks, their American counterparts earn as much as $52 an hour for similar work.
“There’s definitely something wrong with this picture,” said Rob Stoker, president of the Building and Construction Trades Council of Alameda County, who believes local sheet metal workers lost tens of thousands of work hours and millions of dollars in wages.
Critics say the U.S. government hasn’t done enough to halt such arrangements, and has become an unwitting partner by allowing the workers to enter the country on a nonimmigrant visa for tourism and business, known as a B1/B2. Replacing U.S. workers with foreign visa holders for construction work is an improper use of the business visa, they say.
When asked, Elon Musk said that it is the first he’s heard of it, but that he will investigate the charges.
Basically, he is saying that Tesla followed the law, but a subcontractor who supplied the labor did not. Here is the official statement:
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.
Stella's Place 
{sigh} The government gave OUR money to this company (which it shouldn’t have) to pay FOREIGN workers who probably sent it out of the country and most likely nothing will happen to any of the participants in this scheme. And, the bigwhigs at the top will probably give themselves million dollar salaries and even larger bonuses before the company goes under.
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auscitizenmom,
Unfortunately you are most likely correct in your assessment. The agency who hands out such visas and does not verify the jobs, probably also got a spoonful of the gravy.
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