Tesla Motors Inc CEO: We Paid $55/Hour To Paint Factory Builders

Tesla Motors Inc CEO: We Paid $55/Hour To Paint Factory Builders

Tesla CEO Elon Musk pushed back against the claims that the electric car making giant used cheap foreign labor to build one of its facilities. On Wednesday, Musk took to Twitter to reveal the truth and tweeted a letter sent by the automaker’s primary contractor, Eisenmann.

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Contractors deny all accusations

Previously, the Mercury News reported that the electric car maker used underpaid foreign labor to build an automotive paint shop at its Fremont, California Factory. The Mercury News reported that the automaker was paying $5 per hour to foreign laborers, but the letter sent from Eisenmann President Mark West revealed that foreign laborers had been paid an hourly rate of $55.

Tesla paid ISM Vuzem, the subcontractor at the heart of the scandal, $55 per hour per employee to build its paint shop, the letter claimed. In the letter to the automaker, West said this rate gave ISM Vuzem full opportunity to pay its workers appropriately. As for the accusations of visa violations, Eisenmann says it is investigating all the allegations from the article. Also the firm says it was not involved in the visa process at all and that it is revising its procedures relating to how its suppliers deal with labor regulations and obligations.

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Separately, Eisenmann also said that it is hiring auditing firm KPMG to investigate the allegations.

Tesla questions accuracy of Mercury News

Gregor Lesnik, one of the workers who allegedly was paid $5 an hour, is attempting to sue his employers after falling three stories and breaking both legs while working on the Tesla facility, reported the publication.

A spokesperson for the Mercury News told CNBC that they are interested in accuracy “first and foremost.” Lesnik had provided pay stubs as part of a court case that supported his claims, noted the publication. The spokesman further said that their story does not say that Tesla paid these people $5 an hour but that Lesnik was getting $5 an hour.

If the claims against the contractors are true, they are “totally unacceptable,” posted the electric car maker in a rebuttal to Mercury News’ article on Monday. The automaker denied all claims in respect to a possible underpayment of workers by its contractors.

On Wednesday, Musk tweeted, “We still need to make sure that the injured person is taken care of, but less [and] less of the [Mercury News] story appears to be true.”

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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