Elon Musk and Tesla are scrambling to regain the moral high ground after a detailed and highly critical report this week alleged the company used subcontractors who were paid as little as $5 per hour to build a paint shop.
One employee of the subcontractor in particular, a 42-year-old man named Gregor Lesnik who left his pregnant girlfriend in Slovenia in search of work, was said to be “seriously injured” on the job.
Hours after the Mercury News report was published on Sunday, Musk promised on Twitter to “investigate” the claims and “make it right.”
[UPDATE: On Wednesday, Musk contested the original report, sharing documents on Twitter that claim the worker in question was paid $55 per hour, not $5.
“We still need to make sure that the injured person is taken care of,” Musk wrote, “but less & less of the Merc story appears to be true.”]
Tesla condemned the low pay in a blog poston Monday and pledged to help the injured contractor, while simultaneously asserting it had acted legally in its dealings with the subcontracting firm.
“This is not a legal issue, it is a moral issue,” Tesla explained in its statement. “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.”
The company added: “If Mr. Lesnik or his colleagues were really being paid $5 an hour, that is totally unacceptable.”
@margotroosevelt Only heard about this today. Sounds like the wrong thing happened on many levels. Will investigate and make it right.
Elon Musk (@elonmusk) May 16, 2016
The report and Tesla’s quick response to it highlight what can be a stark disconnect between the lofty ideals of prominent tech companies and the grittier labor dynamics that help fuel their fast growth.
Apple has been criticized for its reliance on workers in Chinese manufacturing centers who were said to be underpaid, overworked and dealing with unsafe conditions.
On-demand startups like Uber and Handy must balance their fast-rising valuations and lucrative stock options with the optics of profiting off of thousands of workers who are considered contractors rather than employees and sometimes struggle to do enough gigs to get by.
WeWork, a fast-growing rental office space startup, publicly clashed with comparatively low paid cleaners who were hired to clean those offices through a contractor. The cleaners were terminated by the contractor for trying to unionize, not WeWork, but as one report put it, the multi-billion-dollar startup struggled to represent itself as the “good guy” in the face of that labor dispute.
Tesla, a car company expanding its production goals so rapidly that its CEO claims to sleep in the factory on occasion, relied on a subcontractor named ISM Vuzem that was actually brought on by another firm it used to help construct what it describes as a “high-volume paint shop.”
In short, Tesla was multiple steps removed from the underpaid workers in question, which may insulate it from legal blame, but nonetheless raises concerns about the level of oversight when moving fast and tackling new areas (like paint shops) that it does not understand.
“We are taking action to address this individual’s situation,” Tesla wrote, “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.”
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