Exclusive: CEO Elon Musk defends workplace, saying ‘[we are not] just greedy capitalists who skimp on safety’ – and declares his $50bn company overvalued
The Tesla CEO has been celebrated for his ambition, but workers say there is a human cost to his bold agenda for growth. Photograph: Sarah Lee for the Guardian
When Tesla bought a decommissioned car factory in Fremont, California, Elon Musk transformed the old-fashioned, unionized plant into a much-vaunted “factory of the future”, where giant robots named after X-Men shape and fold sheets of metal inside a gleaming white mecca of advanced manufacturing.
The appetite for Musk’s electric cars, and his promise to disrupt the carbon-reliant automobile industry, has helped Tesla’s value exceed that of both Ford and, briefly, General Motors (GM). But some of the human workers who share the factory with their robotic counterparts complain of grueling pressure – which they attribute to Musk’s aggressive production goals – and sometimes life-changing injuries.
Ambulances have been called more than 100 times since 2014 for workers experiencing fainting spells, dizziness, seizures, abnormal breathing and chest pains, according to incident reports obtained by the Guardian. Hundreds more were called for injuries and other medical issues.
In a phone interview about the conditions at the factory, which employs about 10,000 workers, the Tesla CEO conceded his workers had been “having a hard time, working long hours, and on hard jobs”, but said he cared deeply about their health and wellbeing. His company says its factory safety record has significantly improved over the last year.
Musk also said that Tesla should not be compared to major US carmakers and that its market capitalization, now more than $50bn, is unwarranted. “I do believe this market cap is higher than we have any right to deserve,” he said, pointing out his company produces just 1% of GM’s total output.
“We’re a money-losing company,” Musk added. “This is not some situation where, for example, we are just greedy capitalists who decided to skimp on safety in order to have more profits and dividends and that kind of thing. It’s just a question of how much money we lose. And how do we survive? How do we not die and have everyone lose their jobs?”
Tesla worker Jonathan Galescu says he has seen co-workers collapse or be taken away by ambulances. Photograph: Josh Edelson for the Guardian
Musk’s account of the company’s approach differs from that of the 15 current and former factory workers who told the Guardian of a culture of long hours under intense pressure, sometimes through pain and injury, in order to fulfill the CEO’s ambitious production goals.
“I’ve seen people pass out, hit the floor like a pancake and smash their face open,” said Jonathan Galescu, a production technician at Tesla. “They just send us to work around him while he’s still lying on the floor.”
He was one of several workers who said they had seen co-workers collapse or be taken away in ambulances. “We had an associate on my line, he just kept working, kept working, kept working, next thing you know – he just fell on the ground,” said Mikey Catura, a worker on the battery pack line.
Richard Ortiz, another production worker, spoke admiringly of the high-tech shop floor. “It’s like you died and went to auto-worker heaven.” But he added: “Everything feels like the future but us.”
Tesla sits at the juncture between a tech startup, untethered from the rules of the old economy, and a manufacturer that needs to produce physical goods. Nowhere is that contradiction more apparent than at the Tesla factory, where Musk’s bombastic projection that his company will make 500,000 cars in 2018 (a 495% increase from 2016) relies as much on the sweat and muscle of thousands of human workers as it does on futuristic robots.
Inside Tesla’s car-production center in Fremont, California. The factory employs some 10,000 workers. Photograph: Tesla
“From what I’ve gathered, Elon Musk started Tesla kind of like an app startup, and didn’t realize that it isn’t just nerds at a computer desk typing,” said one production worker, one of several who asked not to be identified by name. “You really start losing the startup feel when you have thousands of people doing physical labor.”
In February, Tesla worker Jose Moran published a blogpost that detailed allegations of mandatory overtime, high rates of injury and low wages at the factory, and revealed that workers were seeking to unionize with the United Auto Workers.
Moran’s post shone a spotlight on a workforce that is almost entirely absent from Tesla’s official images of the factory.
Michael Sanchez once had two dreams: to be an artist and a car service technician. He said he was “ecstatic” when he was recruited five years ago to work at Tesla, a company he believed was “part of the future”.
Now Sanchez has two herniated discs in his neck, is on disability leave from work, and can no longer grip a pencil without pain.
Tesla said that the employee’s injury occurred while he was installing a wheel, but Sanchez said it was caused by the years he spent working on Tesla’s assembly line. The cars he worked on were suspended above the line, and his job required looking up and working with his hands above his head all day.
“You can make it through Monday,” Sanchez said. “You can make it through Tuesday. Come Wednesday, you start to feel something. Thursday is pain. Friday is agonizing. Saturday you’re just making it through the day.”
Tesla’s manufacturing practices appear to have been most dangerous in its earliest years of operations. The company does not dispute that its recordable incident rate (TRIR), an official measure of injuries and illnesses that is reported to workplace safety regulators, was above the industry average between 2013 and 2016.
Tesla declined to release data over those four years, saying such information “doesn’t reflect how the factory operates today”.
Tesla worker Michael Sanchez outside the Fremont factory. Sanchez has two herniated discs in his neck and is currently on disability leave. Photograph: Josh Edelson for the Guardian
The company did release more recent data, which indicates its record of safety incidents went from slightly above the industry average in late 2016, to a performance in the first few months of 2017 that was 32% better than average. The company said that its decision to add a third shift, introduce a dedicated team of ergonomics experts, and improvements to the factory’s “safety teams” account for the significant reduction in incidents since last year.
Musk said safety was paramount at the company. “It’s incredibly hurtful, and, I think, false for anyone to claim that I don’t care.” The CEO said his desk was “in the worst place in the factory, the most painful place”, in keeping with his management philosophy. “It’s not some comfortable corner office.”
In early 2016, he said, he slept on the factory floor in a sleeping bag “to make it the most painful thing possible”. “I knew people were having a hard time, working long hours, and on hard jobs. I wanted to work harder than they did, to put even more hours in,” he said. “Because that’s what I think a manager should do.”
He added: “We’re doing this because we believe in a sustainable energy future, trying to accelerate the advent of clean transport and clean energy production, not because we think this is a way to get rich.”
Tesla workers who spoke to the Guardian echoed this sense of pride and enthusiasm for the company’s mission. “We’re changing the world,” enthused Ortiz. “I can’t wait for my granddaughter to one day go to class and say, ‘My grandfather was in there.’”
But that pride did not erase what Ortiz described as a prevailing mood of “mass disappointment” over working conditions and what he alleged were avoidable work-related injuries.
He recently lost the strength in his right arm, a situation he said was “scaring” him. “I want to use my arm when I’m retired,” he added.
Others described repetitive stress injuries they linked to working long hours. Before the company reduced the average time of a workday in October 2016, workers said they routinely worked 12-hour shifts, six days a week. Tesla said the change had been “a success”, and resulted in a 50% decline in overtime hours.
Tesla worker Richard Ortiz says that despite being proud of the company’s mission, there is a mood of ‘mass disappointment’ over conditions. Photograph: Julia Carrie Wong for the Guardian
Sanchez and other workers said they believed more injuries occurred because, for years, the company did not take worker safety seriously, with some managers belittling their complaints and pressuring them to work through pain.
When workers told managers about pain, Sanchez said they responded: “We all hurt. You can’t man up?” Alan Ochoa, another Tesla worker who is currently on a medical leave with an injury, alleged that superiors “put the production numbers ahead of the safety and wellbeing of the employees”.
The company said that Ochoa and Sanchez are especially outspoken workers whose views do not represent the wider workforce. However, the Tesla spokesperson added: “In a factory of more than 10,000 employees, there will always be isolated incidents that we would like to avoid.”
Complaints about working conditions at Tesla are not universal. “I’ve got benefits, I’ve got stocks, I’ve got [paid time off],” said a worker who has been at the company for about a year. “I thoroughly enjoy my work and I feel I’m treated fairly.”
Another worker, a temporary employee, said that he sees some teams in the factory doing group stretches in the morning to prevent injuries.
However, some Tesla workers argue the company’s treatment of injured workers discourages them from reporting their injuries. If workers are assigned to “light duty” work because of an injury, they are paid a lower wage as well as supplemental benefits from workers’ compensation insurance, a practice that Tesla said was in line with other employers and California law. Tesla said some injured employees are also able to undertake “modified work” on regular pay.
“I went from making $22 an hour to $10 an hour,” said a production worker, who injured his back twice while working at Tesla. “It kind of forces people to go back to work.”
“No one wants to get a pay cut because they’re injured, so everyone just forces themselves to work through it,” added Adam Suarez, who has worked at the factory for about three years.
Tesla said it was determined to further improve its safety standards. “While some amount of injuries is inevitable, our goal at Tesla is to have as close to zero injuries as possible and to become the safest factory in the auto industry worldwide,” the spokesperson said.
Inside Tesla’s factory. Elon Musk has said his company will make 500,000 cars in 2018, a 495% increase from 2016. Photograph: Tesla
Musk has a well-documented tendency to promise Mars and deliver the moon. His electric car company was, by his own admission, a gamble. Musk said starting a car manufacturer from scratch was likely “the worst way to earn money, honestly”, though he caveated that “maybe rockets are a bit worse”. He said: “On a risk-adjusted return basis, an auto company has to be the dumbest thing you could possibly start.”
The company has succeeded at increasing its production rate every quarter. In the first three months of 2017, the factory produced more than 25,000 cars – a Tesla record. To meet Musk’s goal for 2018, they will have to quintuple that rate.
“I think one of the major problems is that people at the top are making unrealistic quarterly goals,” said a worker on the battery pack line.
Three workers described a management tactic of assigning a monetary value to every delay on the assembly line. “One time the robot came down and [the supervisor] came back screaming at us, ‘That’s $18,000, $20,000, $30,000, $50,000 because you guys can’t get this done,’” Gelascu recalled.
Tesla argues the challenge in building vehicles from scratch with new production and manufacturing methods should not be underestimated, but that “nothing is more important” than protecting the health and safety of its workers.
“We’re trying to do good for the world and we believe in doing the right thing,” Musk said. “And that extends to caring about the health and safety of everyone at the company.”
It’s a more humanistic tone than the one he strikes with investors. “You really can’t have people in the production line itself. Otherwise you’ll automatically drop to people speed,” he told investors in an earnings call last year. “There’s still a lot of people at the factory, but what they’re doing is maintaining the machines, upgrading them, dealing with anomalies. But in the production process itself there essentially would be no people.”
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May 18th 2017 | 2149 words
