http://www.mercurynews.com/2017/10/13/4819750/

Tesla fires hundreds after company-wide performance reviews
Company says it will replace most workers
By LOUIS HANSEN | lhansen@bayareanewsgroup.com | Bay Area News Group
PUBLISHED: October 13, 2017 at 4:00 pm | UPDATED: October 14, 2017 at 8:00 am

PALO ALTO – Tesla fired hundreds of workers this week, including engineers, managers and factory workers, even as the company struggles to expand its manufacturing and product line.

The dismissals come at a crucial point for the company, which is pushing to increase vehicle production five-fold and reach a broader market with its new Model 3 sedan. The electric vehicle maker missed targets for producing the lower-cost sedan, manufacturing only 260 last quarter despite a wait list of more than 450,000 customers.

The company said this week’s dismissals were the result of a company-wide annual review, and insisted they were not layoffs. Some workers received promotions and bonuses, and the company expects to hire for the “vast majority” of new vacancies, a spokesman said.

“As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” a spokesman said. “Tesla is continuing to grow and hire new employees around the world.”

In multiple interviews, former and current employees told this news organization little or no warning preceded the dismissals. The workers interviewed include trained engineers working on vehicle design and production, a supervisor and factory employees.

Workers estimated between 400 and 700 employees have been fired. Tesla refused to say how many employees were let go, although the company expects employee turnover to be similar to last year’s attrition.

The spokesman said most of the dismissals were administrative and sales positions, and outside of manufacturing. Tesla employs about 10,000 workers at its Fremont factory.

Workers spoke on the condition of anonymity because they feared reprisals from the company. Employees said the firings have lowered morale through many departments. Several said Model X, Model S and former SolarCity operations seemed to be targeted.

Juan Maldonado, a production worker, felt the tap on his shoulder on Thursday. He worked at Tesla for nearly four years, and said he heard about 60 other workers in his section of the factory were dismissed.

Maldonado, 48, said he ran late for work twice in recent months, but thought he had straightened things out with his supervisor. Now, he said, “I’m going to try to find a job.”

CEO Elon Musk said factory output will increase production to a half-million electric vehicles in 2018. The company expects to deliver about 100,000 vehicles this year.

Musk has told investors the company is focused on Model 3 production and expects to eventually build 10,000 cars a week. The manufacturing will become highly automated, but Musk told investors during the early ramp up he expected high overtime costs.

He also joked to employees they would be going through “production hell” to meet demand for the new car. The company said recently a manufacturing bottleneck caused it to fall far short of its goal to produce 1,500 Model 3s in the quarter.

The company has also started to cut some former SolarCity operations, which were acquired by Tesla last year. In August, Tesla told state regulators it would layoff 63 workers in Roseville, including sales and administrative staff. Tesla lost $336 million in the second quarter.

This week’s dismissals have not been reported to the state Employment Development Department, a spokeswoman said. The state generally requires companies to report layoffs of more than 50 employees in a 30-day period.

Tesla said the performance-based departures were not considered layoffs and not subject to state notifications. It also said the moves have generally boosted worker morale, as high-performing employees have been rewarded.

The clean energy company — maker of luxury electric vehicles, battery storage and solar roofs — has failed to post an annual profit even as its stock has soared on promises of revolutionary products. About 450,000 customers have placed $1,000 deposits for the Model 3.

Tesla has faced ongoing discontent from some factory workers, who have complained about work conditions and wages below the auto industry average.

Tesla has a hearing before the National Labor Relations Board in November for charges that company supervisors and security guards harassed workers distributing union literature. Tesla denied the accusations.

Openly pro-union workers were among those fired this week. Some believe they were targeted.

The company denied union activities played a role in the dismissals.

Michael Harley, managing editor at Kelley Blue Book and Autotrader, thought the dismissals could be an effort to improve vehicle production.

“It’s no secret that Tesla’s Model 3 development and ramp-up for production has been derailed,” Harley said. “A major change in staff – whether dismissal or layoff – is an indication that there is an upper level movement to put the train back on the tracks.”

It was all smooth sailing when Obama was pumping the company with taxpayers' money.

Now, not smooth sailing, huh Musk? I'm so sorry you're having to learn on the fly how to run a company on its own ability to make a profit without government assistance.

Will his ventures in space travel and home-based energy storage be next?


Elon Musk's growing empire is fueled by $4.9 billion in government subsidies L.A. Times Article

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he's built those companies with the help of billions in government subsidies.

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.

"He definitely goes where there is government money," said Dan Dolev, an analyst at Jefferies Equity Research. "That's a great strategy, but the government will cut you off one day."

The figure compiled by The Times comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.

One reason Tesla cares so much about California's air
The electric automaker Tesla has a side business. It's called environmental credits.
A looming question is whether the companies are moving toward self-sufficiency — as Dolev believes — and whether they can slash development costs before the public largesse ends.

Tesla and SolarCity continue to report net losses after a decade in business, but the stocks of both companies have soared on their potential; Musk's stake in the firms alone is worth about $10 billion. (SpaceX, a private company, does not publicly report financial performance.)

Musk and his companies' investors enjoy most of the financial upside of the government support, while taxpayers shoulder the cost.

The payoff for the public would come in the form of major pollution reductions, but only if solar panels and electric cars break through as viable mass-market products. For now, both remain niche products for mostly well-heeled customers.

Musk declined repeated requests for an interview through Tesla spokespeople, and officials at all three companies declined to comment.

The subsidies have generally been disclosed in public records and company filings. But the full scope of the public assistance hasn't been tallied because it has been granted over time from different levels of government.

New York state is spending $750 million to build a solar panel factory in Buffalo for SolarCity. The San Mateo, Calif.-based company will lease the plant for $1 a year. It will not pay property taxes for a decade, which would otherwise total an estimated $260 million.

The federal government also provides grants or tax credits to cover 30% of the cost of solar installations. SolarCity reported receiving $497.5 million in direct grants from the Treasury Department.

That figure, however, doesn't capture the full value of the government's support.

Since 2006, SolarCity has installed systems for 217,595 customers, according to a corporate filing. If each paid the current average price for a residential system — about $23,000, according to the Union of Concerned Scientists — the cost to the government would total about $1.5 billion, which would include the Treasury grants paid to SolarCity.

Nevada has agreed to provide Tesla with $1.3 billion in incentives to help build a massive battery factory near Reno.

The Palo Alto company has also collected more than $517 million from competing automakers by selling environmental credits. In a regulatory system pioneered by California and adopted by nine other states, automakers must buy the credits if they fail to sell enough zero-emissions cars to meet mandates. The tally also includes some federal environmental credits.

On a smaller scale, SpaceX, Musk's rocket company, cut a deal for about $20 million in economic development subsidies from Texas to construct a launch facility there. (Separate from incentives, SpaceX has won more than $5.5 billion in government contracts from NASA and the U.S. Air Force.)

Subsidies are handed out in all kinds of industries, with U.S. corporations collecting tens of billions of dollars each year, according to Good Jobs First, a nonprofit that tracks government subsidies. And the incentives for solar panels and electric cars are available to all companies that sell them.

Musk and his investors have also put large sums of private capital into the companies.

But public subsidies for Musk's companies stand out both for the amount, relative to the size of the companies, and for their dependence on them.

"Government support is a theme of all three of these companies, and without it none of them would be around," said Mark Spiegel, a hedge fund manager for Stanphyl Capital Partners who is shorting Tesla's stock, a bet that pays off if Tesla shares fall.

Tesla stock has risen 157%, to $250.80 as of Friday's close, over the last two years.

Musk has proved so adept at landing incentives that states now compete to give him money, said Ashlee Vance, author of "Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future," a recently published biography.

"As his star has risen, every state wants a piece of Elon Musk," Vance said.

Before his current ventures, he made a substantial sum from EBay Inc.'s $1.5-billion purchase of PayPal, the electronic payment system in which Musk held an 11% stake.

Soon after, he founded SpaceX in 2002 with money from that sale, and he made major investments and took leadership posts at Tesla and Solar City.

Musk is now the chief executive of both Tesla and SpaceX and the chairman of SolarCity, and holds big stakes in all three, including 27% of Tesla and 23% of SolarCity, according to recent regulatory filings. The ventures employ about 23,000 people nationwide, and they operate or are building factories and facilities in California, Michigan, New York, Nevada and Texas.

The $1.3 billion in benefits for Tesla's Nevada battery factory resulted from a year of hardball negotiations.

Late in 2013, Tesla summoned economic development officials from seven states to its auto factory in Fremont, Calif. After a tour, they gathered in a conference room, where Tesla executives explained their plan to build the biggest lithium-ion battery factory in the world — then asked the states to bid for the project.

Nevada at first offered its standard package of incentives, in this case worth $600 million to $700 million, said Steve Hill, Nevada's executive director of the Governor's Office of Economic Development.

Tesla negotiators wanted far more. The automaker at first sought a $500-million upfront payment, among other enticements, Hill said. Nevada pushed back, in sometimes tense talks punctuated by raised voices.

"It would have amounted to Nevada writing a series of checks during the first couple of years," said Hill, calling it an unacceptable risk.

With the deal imperiled, Hill flew to Palo Alto in August to meet with Tesla's business development chief, Diarmuid O'Connell, a former State Department official who is the automaker's lead negotiator.

They shored up the deal with an agreement to give Tesla $195 million in transferable tax credits, which the automaker could sell for upfront cash. To make room in its budget, Nevada reduced incentives for filming in the state and killed a tax break for insurance companies.

Nevada Gov. Brian Sandoval and Musk sealed the agreement in a Labor Day phone conversation. Hill said it was worth it, pointing to the 6,000 jobs he expects the factory to eventually create.

The state commissioned an analysis estimating the economic impact from the project at $100 billion over two decades, but some economists called that figure deeply flawed. It counted every Tesla employee as if they would otherwise have been unemployed, for instance, and it made no allowance for increased government spending to serve the influx of thousands of local residents.

Musk has similar success with getting subsidies for a SolarCity plant in Buffalo, N.Y. The company currently buys many of its solar panels from China, but it will soon become its own supplier with a new and heavily subsidized factory.

An affiliate of New York's College of Nanoscale Science and Engineering in Albany will spend $750 million to build a solar panel factory on state land. SolarCity estimated in a corporate filing that it will spend an additional $150 million to get the factory operating.

When finished in 2017, the 1.2-million-square-foot facility will be the largest solar panel factory in the Western Hemisphere. New York officials see the subsidy as a worthy investment because they expect that it will create 3,000 jobs. The plant will replace a long-closed steel factory.

"The SolarCity facility will bring extensive benefits and value to this formerly dormant brownfield that provided zero benefit to the city and region," said Peter Cutler, spokesman for Empire State Development, New York's economic development agency.

SpaceX, though it depends far more on government contracts than subsidies, received an incentive package in Texas for a commercial rocket launch facility. The state put up more than $15 million in subsidies and infrastructure spending to help SpaceX build a launch pad in rural Cameron County at the southern tip of Texas. Local governments contributed an additional $5 million.

Included in the local subsidies is a 15-year property tax break from the local school district worth $3.1 million to SpaceX. Officials say the development still will bring in about $5 million more over that period than the local school district otherwise would have collected.

"That's $5 million more than we have ever seen from that property," said Dr. Lisa Garcia, superintendent of the Point Isabel Independent School District. "It is remote.... It is just sand dunes."

The public money for Tesla and SolarCity factories is crucial to both companies' efforts to lower development and manufacturing costs.

The task is made more urgent by the impending expiration of some of their biggest subsidies. The federal government's 30% tax credit for solar installations gets slashed to 10% in 2017 for commercial customers and ends completely for homeowners.

Tesla buyers also get a $7,500 federal income tax credit and a $2,500 rebate from the state of California. The federal government has capped the $7,500 credit at a total of 200,000 vehicles per manufacturer; Tesla is about a quarter of the way to that limit. In all, Tesla buyers have qualified for an estimated $284 million in federal tax incentives and collected more than $38 million in California rebates.

California legislators recently passed a law, which has not yet taken effect, calling for income limits on electric car buyers seeking the state's $2,500 subsidy. Tesla owners have an average household income of about $320,000, according to Strategic Visions, an auto industry research firm.

Competition could also eat into Tesla's public support. If major automakers build more zero-emission cars, they won't have to buy as many government-awarded environmental credits from Tesla.

In the big picture, the government supports electric cars and solar panels in the hope of promoting widespread adoption and, ultimately, slashing carbon emissions. In the early days at Tesla — when the company first produced an expensive electric sports car, which it no longer sells — Musk promised more rapid development of electric cars for the masses.

In a 2008 blog post, Musk laid out a plan: After the sports car, Tesla would produce a sedan costing "half the $89k price point of the Tesla Roadster and the third model will be even more affordable."

In fact, the second model now typically sells for $100,000, and the much-delayed third model, the Model X sport utility, is expected to sell for a similar price. Timing on a less expensive model — maybe $35,000 or $40,000, after subsidies — remains uncertain.

"Some may question whether this actually does any good for the world," Musk wrote in 2008. "Are we really in need of another high-performance sports car? Will it actually make a difference to global carbon emissions? Well, the answers are no and not much.... When someone buys the Tesla Roadster sports car, they are actually helping to pay for the development of the low-cost family car."

Now Musk is moving into a new industry: energy storage. Last month, he starred in a typically dramatic announcement of Tesla Energy-branded batteries for homes and businesses. On a concert-like stage, backed by pulsating music, Musk declared that the batteries would someday render the world's energy grid obsolete.

"We are talking about trying to change the fundamental energy infrastructure of the world," he said.

Musk laid out a vision of affordable clean energy in the remote villages of underdeveloped countries and homeowners in industrial nations severing themselves from utility grids. The Nevada factory will churn out the batteries alongside those for Tesla cars.

What he didn't say: Tesla has already secured a commitment of $126 million in California subsidies to companies developing energy storage technology.

Tesla is the Hudson of our day.

Or Tucker?

Or DeLorean?

More like Nikola Tesla.

Tesla was a truly brilliant man, who is largely responsible for our modern electrified world thanks to his invention of alternating current. But he ended his days in a hotel room in New York City caring for and feeding pigeons, bankrupt, and supported solely by charitable gifts from the Westinghouse Company that were couched as a consulting fee.

One day, we'll hear of the event that causes Musk's downfall and the loss of his control over his various enterprises, the world will shake its head and say "Tut, tut." and he too will be largely ignored by history.

And unlike Mr. Tesla, Musk will not have personally invented much of anything.

quote:

Originally posted by OldMick:
Or DeLorean?

I don't think a Tesla has enough battery power to reach 88 miles per hour, even with a flux capacitor.

quote:

Originally posted by snoris:
I don't think a Tesla has enough battery power to reach 88 miles per hour, even with a flux capacitor.

Sure it does.

The first Tesla production model, the Roadster, has a top speed governed at 125 MPH (but without the governor has the potential for higher speeds), and goes 0-60 MPH in 3.9 seconds.

The Tesla Model S has a top speed governed at 155 MPH, with a 0-60 of 2.8 seconds.

The Model X has a top speed of 130 MPH, with a 0-60 of 6 seconds.

The Model 3 has a top speed of 140 MPH, with a 0-60 of 5.1 seconds.

I have no problem with Musk, Solar Power, private Space programs, big Batteries, Electric Vehicles, or the like, but I have a serious fucking problem with me and us paying for it.

I would end the totality of these and all similar subsidies in an instant, if I could.

And, "environmental credits" are fucking crazy.

Shut this shit down right fucking NOW.

Performance based review with the ability to fire? What a novel idea!

The fucking Government needs that, from the municipal to the Federal level.

Pronto.

quote:

Originally posted by Spokane228:
Or Tucker?

Please don't compare Tesla to Tucker. The Tucker was an amazing vehicle for its time, and was killed via the corrupt partnership between the big automakers and the government.

quote:

Originally posted by snoris:
I don't think a Tesla has enough battery power to reach 88 miles per hour, even with a flux capacitor.

Speed isn't Tesla's Achilles heal, range and the length of time to recharge is. Until Tesla (or some other company) comes up with a battery technology that is smaller, lighter, higher capacity, and quicker to recharge, these vehicles will continue to be nothing more than toys. And if Elon really has any hope whatsoever of the public at large buying into this concept, he might want to focus a bit on the items placing Tesla on the bottom of JD Power's ratings scale.

Very, very, expensive, taxpayer subsidized *toys*, that look cool and accelerate quickly. Cute little round-abouts/grocery-getters, for folks with extra loot to blow on superfluous gizmos, most of which is absolutely fine - except for the fact that everyone else is paying for them.

One day, no doubt, it will be a viable technology. But it needs to happen without the subsidies, and the current arguments regarding the environment or the evils or shortages of fossil fuels is overblown nonsense - or grossly overstated good intentions - at best.

Tesla was never really a businessman. He was more an inventor/engineer. George Westinghouse was the businessman. Eventually they got muscled aside by JP Morgan, who was backing Thomas Edison. This was back before the anti-trust ball got rolling.

quote:

Originally posted by Sig2340:
More like Nikola Tesla.

Tesla was a truly brilliant man, who is largely responsible for our modern electrified world thanks to his invention of alternating current. But he ended his days in a hotel room in New York City caring for and feeding pigeons, bankrupt, and supported solely by charitable gifts from the Westinghouse Company that were couched as a consulting fee.

One day, we'll hear of the event that causes Musk's downfall and the loss of his control over his various enterprises, the world will shake its head and say "Tut, tut." and he too will be largely ignored by history.

And unlike Mr. Tesla, Musk will not have personally invented much of anything.

quote:

a top speed governed at 125 MPH ..... and goes 0-60 MPH in 3.9 seconds.

The Tesla Model S has a top speed governed at 155 MPH, with a 0-60 of 2.8 seconds.

The Model X has a top speed of 130 MPH, with a 0-60 of 6 seconds.

The Model 3 has a top speed of 140 MPH, with a 0-60 of 5.1 seconds.

....oddly enough, in the last 50+ years of driving I've never once actually needed this potential capacity......

quote:

Originally posted by sigcrazy7:
Tesla is the Hudson of our day.

I don't really feel that it's fair to Hudson to say that. They had many years of excellent cars prior to the jet killing the company.

My cousin has a Model X one step below the "ludicrous" option. We went out on an empty industrial parking lot after he acquired it and I drove and rode passenger. No car ive ever seen has that kind of acceleration.

I have several acquaintances that either do business with Tesla at the factory or work there. Hope they are not affected by this. I'm not a direct shareholder I think it's a rediculous business model. Elon sure has gamed the system, legally it appears though.

quote:

Originally posted by RogueJSK:

quote:

Originally posted by snoris:
I don't think a Tesla has enough battery power to reach 88 miles per hour, even with a flux capacitor.

Sure it does.

The first Tesla production model, the Roadster, has a top speed governed at 125 MPH (but without the governor has the potential for higher speeds), and goes 0-60 MPH in 3.9 seconds.

The Tesla Model S has a top speed governed at 155 MPH, with a 0-60 of 2.8 seconds.

The Model X has a top speed of 130 MPH, with a 0-60 of 6 seconds.

The Model 3 has a top speed of 140 MPH, with a 0-60 of 5.1 seconds.

Hey, the cars are cool, no doubt about it, but what the fuck am I/you doing paying for it?

quote:

Originally posted by signewt:
....oddly enough, in the last 50+ years of driving I've never once actually needed this potential capacity......

Me either. But those specs were posted in response to the assertion that Teslas weren't powerful enough to reach 88 MPH.

"Tesla's Leaking Oil"



I don't get the thread title relative to the discussion?

With the basic Tesla SUV - the one with those spiffy 'hawk' doors - costing north of $150,000 here in yUK, you can be certain that there are not that many of them on the crowded roads hereabouts. Strangely, though, there are a surprising number of sedans, for reasons I have yet to figure out, even at $100,000+.

I've not seen one towing a van, or anything else though...

tac

This message has been edited. Last edited by: tacfoley,