Tesla’s factory in Fremont is the only U.S. car assembly plant owned by an American automaker that is not represented by a union, but that’s just one of many things Tesla does unlike any other American (or otherwise) automaker.
Following the announcement of Tesla’s updated plans to increase its annual vehicle production at the factory to 500,000 cars by 2018 – 2 years earlier than previously planned, the United Auto Workers (UAW) expressed interest in unionizing Tesla’s workforce at the factory. One could look at the move as being opportunistic by the UAW to significantly increase its numbers or as a move to help protect workers it perceives being exploited by Tesla’s ever-expanding needs.
UAW President Dennis Williams said that up until now, the union was respecting Tesla’s startup status, but the new production rate would quickly make the electric automaker one of the largest car manufacturer in the nation and bigger than more established luxury automakers like BMW and Mercedes.
Williams is right that Tesla plans to quickly become as big as other automakers, but does higher volume alone justify the implementation of a union?
During a press conference this week (you can watch in full below), Williams said:
“We’re watching that very closely. We just believe workers ought to have a voice in the workplace, and they ought to have collective bargaining rights.”
The possibility of the UAW organizing Tesla’s employees as some interesting implications, but also some potentially disrupting repercussions for a company which acts more like a tech company than an automaker. For example, Tesla offers equity to all employees from the ground up. It brings some perspective to unionizing when the production workers can also technically be company owners.
The factory is also in a state, California, that protects its workers more than most. Cal/OSHA pre-emptively protects workers from occupational hazards in a state with some of the toughest worker rights laws and highest minimum wage in the country. Additionally, Tesla is also scrutinized by the media for its workplace standards and it is easy to say they are held to a much higher standard than any other automaker.
Recently, a report came out in the Mercury News claiming that Tesla hired a subcontractor that paid employees $5 per hour to build its new paint shop. Tesla CEO Elon Musk took to Twitter to show that the automaker paid $55 per hour through the subcontractor:
Tesla is located in Silicon Valley, not in Michigan or Tennessee, and it shows in the way it operates. The long history of automotive culture doesn’t have as much as an impact on the company’s environment. Its mission is also unlike any other automaker. Tesla wants to accelerate the transition to sustainable transportation – the key word being ‘accelerate’. As in as fast as possible.
Tesla employees (and former employees) who comment on our posts often say that they love the company but the hours are long. The starting salary on Tesla’s production floor is $17/hour (but that can grow quickly in addition to the equity) and the typical hours have been described as 12 hours a day – 5 days a week.
We asked Tesla about the long hours employees have to do, something that could likely attract the attention of a union, and a Tesla spokesperson spoke openly about the company’s expectations:
“There is no doubt that Tesla employees work harder than most. Changing the world is not a 9-5 job. We make this very clear to all candidates when they apply to work at Tesla.At times, during heavy production ramp, some shops in the factory may have to work on Saturdays. We give everyone advance notice when this is required to ensure they can plan their schedules accordingly. We also provide alternate work schedules for many of our production shops that include compressed work weeks allowing for more flexibility and schedule predictability.”
Part of disrupting the auto industry is making changes to the “business as usual” mindset that has dominated the 100+ year old industry for most of its history. Just like unions, Tesla has eschewed the third-party dealership model that has pervaded the industry for years, subtracting the additional layer of middlemen that don’t benefit for the consumer or the automaker.
Whether unions are a similar ‘extraneous’ entity that Tesla can bypass for the good of its mission may be up for debate, but the UAW isn’t nearly as embedded in the auto industry as dealerships. The question is more about its potential impact on said mission versus its usefulness to workers.
Tesla feels justified to expect so much of its employees because they truly believe the mission is worth it, but also by making the expectations clear before bringing anyone on-board. This feeling of meaningfulness is obviously difficult to quantify but it seems to have a clear impact on employees as shown in a recent PayScale report based on data obtained from 33,500 workers in the tech industry.
The automaker scored 89% in the ‘high job meaning’ category, more by a wide margin than most other tech companies like Facebook with 78%, Apple with 74% and Google with 72%. The only tech firm to have scored better than Tesla in the category was Musk’s other firm SpaceX with 92%.
The meaningfulness of a job could arguably be considered the most important factor for satisfaction, but it obviously has to be balanced with good working conditions, which Tesla appears to be providing aside from long hours – and as the spokesperson said: “changing the world is not a 9-5 job.”