Meet (Elon Musk) the New Boss, Same as the Old

AP Photo/Richard Drew

Tesla Motors CEO Elon Musk is interviewed on the Fox Business Network

Jose Moran worked at the Fremont Tesla factory for four years before he decided to go public about the things he had witnessed. In February 2017, Moran published a blog post on Medium detailing what it was like to work on Elon Musk’s factory floor, and how some of his co-workers were hurting but were “too afraid to report it for fear of being labeled as a complainer or bad worker by management.” 

The decision to go public with his exposé only came after “a long build-up,” Moran told the Prospect. He’d spent his first few years at Tesla “watching a lot of people get hurt” and suffered an injury to his left shoulder himself.

“I thought it could’ve been preventable if management would have listened to our concerns regarding safety and processes in our work area,” he explained. “So I decided to write something and expose the working conditions at Tesla and try to bring attention to that.” 

Underneath the sleek exterior of Tesla is the ongoing struggle of its workers’ fight for safer conditions, better pay, and union representation. The United Auto Workers’ (UAW), along with a number of Tesla employees, have been trying to organize Tesla factory workers since 2016, much to Musk’s dismay. In the wake of report after report of poor working conditions, and responding to an aptly timed tweet that asked about unions, CEO Musk took to Twitter to broadcast his anti-union beliefs. Since then, Musk’s labor policies have been increasingly scrutinized, even to the point of viral parody

In response to accusations of union suppression in May of this year, Musk tweeted his defense: “[Tesla workers] can form a union whenever they want & there’s nothing I can do to stop them. California is a very pro-union state. They just don’t want to.” One day later he claimed that workers could vote on a union “tomorrow if they wanted. But why pay union dues & give up stock options for nothing?” 

Confronted with press accounts of how rolling out the Model 3 Tesla car on schedule required “pushing workers to the limit,” Musk even offered Bloomberg Businessweek a chance to walk around the factory unescorted to speak with workers about factory conditions—which led to still more revelations of previously unreported injuries and the pressure felt by employees to meet production requirements. 

Tesla was able to reach its previously announced production rate of 5,000 Model 3s per week by the last week of June. However, an analyst from the independent investment research firm CFRA Research deemed that production rate not “operationally or financially sustainable”—a troubling judgment considering that the company’s goal for the end of the year is 10,000 cars per week.

An official complaint against Tesla’s labor policies was filed by the National Labor Relations Board (NLRB) in August 2017, after the UAW and three Tesla employees separately submitted complaints to the board in April. Tesla has responded that the charges have no merit, while the NLRB has filed additional complaints in the following months. Most recently, Tesla’s anti-union behavior has reportedly reached new heights: In June, the NLRB amended an existing complaint, claiming that Musk had personally discouraged workers in the Fremont factory from unionizing. The board commenced its hearings on the case in June, but has yet to reach a decision. 

The history of high-profile industrialists like Musk fighting the unionizing efforts of their workers has been long and tumultuous. Like America’s railroad and factory barons between the end of the Civil War and the start of World War II, Musk has taken his place in the long line of wealthy capitalists who feel unions pose a threat to the very existence of their industry.

Musk’s reactionary labor policies, however, can be obscured by the patina of forward-looking environmental progressivism. If autos no longer burn fossil fuels, if electric vehicles become mainstream, oil consumption could be cut by 21 million barrels per day, and carbon emissions could be cut by 3.2 billion tons a year by 2040. If he’s a narcissist, Musk himself has said, at least he’s a useful one. What he seems not to have realized is that, given the massive federal and state subsidies to promote electric cars, and given the extraordinary efforts his employees have put in to produce them, he’s not in this alone. 

 

THE STRETCH OF Northern California between Oakland and San Jose, where Tesla’s Fremont factory is situated, was once a bastion of union activity. Fifty years ago, there were at least five unionized auto plants in the region, one of them NUMMI—a joint unionized venture of both General Motors and Toyota—whose Fremont factory is now Tesla’s. The old Fremont union building was even bought by Tesla in 2014. 

But for Tesla, all the auto companies that have opened factories in the United States in recent decades have located them in the anti-union South, where local elected officials and the civic establishment have aided the car companies’ successful campaigns to thwart their workers’ efforts to unionize. Josh Freeman, a CUNY labor historian, notes how unusual it is that Musk has thus far been able to bring Tesla’s non-union auto manufacturing model to the West Coast, where local officials and much of the civic establishment favor unionization. 

Moran worked in the unionized NUMMI plant for eight years, where he said he had more certainty over his future job security and benefits than he did while working at the Tesla plant. 

“It is a little bit different having a union and not having a union,” he said. “At Tesla you have that uncertainty of what is going to happen in the future, [with] your working hours, your work schedule.”

Before Moran’s Medium blog post, workers had been having conversations about their working conditions, but no one inside the plant, says Moran, knew the next steps to actually form a union. Soon after, workers reached out to the UAW in hopes of turning their conversations into action. 

But to Tesla’s younger employees, unions are an unknown commodity, and many of those workers are skeptical about what benefits a union can bring. 

“There’s a lot of younger [people in the] workforce,” said Moran of the current Tesla employees. “The biggest hurdle is educating the younger work force about the benefits of having a union.” Many of the benefits that come with a union—making sure that worker’s voices are heard in safety and scheduling issues, and making sure the company doesn’t have 100 percent of the power—are not recognized by employees who didn’t work at the unionized NUMMI factory years before, he adds. 

 

MUSK HAS BEEN described as a “futurist,” given the far-out projects that he pursues, like trying to make rocket travel affordable for the middle classcolonizing Mars, and developing transportation fueled by sustainable energy. But Musk’s popularity and/or notoriety is arguably due as much to his persona and self-promotion as they are to his inventions, some of which still remain to be invented. His Instagram is filled with videos and pictures of his latest creations, he makes flame throwers for fun, and his tweets come off as unfiltered as the president’s. Fanboys—usually younger, white men—defend him on Twitter like it’s their job, and Musk himself is prone to acting out when reporters publish unflattering stories. Musk’s latest debacle involved calling one of the Thai cave rescue divers a “pedo” on social media, in a now-deleted tweet for which he apologized.

For his fanboys, this cult of personality adds to Tesla’s image as a “progressive” company, a bold step toward sustainability that “disrupts” the status quo of manufacturing.

Yet Musk is repeating a story of American industrialists that has been told over and over again. A company that suppresses unions and rails at regulation while its CEO donates to the political party in power is anything but disruptive—it’s par for the course in America. 

“That is nothing new.” Ruth Milkman, a labor sociologist at the CUNY Graduate Center, told the Prospect. “[Musk] is no different than other employers, past and present. They don’t want anyone else telling them how to run the show.”

Anti-unionism is nothing if not old news among America’s legendary industrialists. Musk is most commonly compared—favorably—to Henry Ford, the great revolutionary of auto production. But Ford was also known to put unreasonable standards on his workers in order to maintain manufacturing output, and was famed for his squad of union-busting goons—many of them ex-cons—who both spied on union activists and periodically beat them up. 

In the 21st century, the great industrialists come in shiny new Silicon Valley packaging. There is a certain mindset that comes from Silicon Valley that can be transferred over to other industries—“aggressive and progressive,” as Nelson Lichtenstein, a historian at the University of California at Santa Barbara, called it. 

It’s no surprise that this happened with Tesla. Musk began in the tech industry, creating Zip2 with his brother, Kimbal, and X.com, which then later became PayPal. Musk simply “transfer[red] the Silicon Valley managerial mindset and outlook to the auto industry,” Lichtenstein told the Prospect. Musk’s adversarial relationship with unions and his libertarian worldview (he claims to have “gotten rich” without any government help, while also disavowing government subsidies to start businesses after his own loans were paid off) is part of the Silicon Valley mentality that elevates the entrepreneur—usually a white male—in the belief that because he’s created a successful breakthrough enterprise, he has the key to solving all the world’s problems (possibly by leaving this polluted world altogether, which is one of the objectives that Musk and Jeff Bezos tout for their respective space-travel ventures). 

The libertarian, Randian belief in the brilliant entrepreneur who’s only hampered by government and lesser mortals, Freeman says, is especially common for first-generation entrepreneurs: They want to be the sole person in charge and prove that they can make a revolutionary company all by themselves. Committed as Musk is to this libertarian framework and egocentric perspective, he may well view unions as an economic, moral, and even existential threat, Freeman says. 

As well, Musk had entered the auto industry at a time when it had decreasing union numbers, and when no new auto plant had gone union in decades, Lichtenstein explains. No wonder Musk responded to his critics by asking, in effect, “Why are you picking on me when no one else is unionized?” CEOs already see unions as a threat to the purity of the free market, and if the competitive advantage of not having a union outweighs the benefits, their downward spiral only accelerates. And even with these declining numbers, executives continue to see unions as a mortal threat. “Unions will be denounced as too powerful even when there’s only three left in the whole country,” Lichtenstein says. 

 

WHILE MUSK'S LIBERTARIAN mindset may contributes to his union antipathy, Tesla began with a loan from the Obama administration’s Department of Energy for $451.8 million, and the sale of the cars themselves are subsidized with government rebates. 

At the federal level, there is a tax credit incentive up to $7,500 provided to anyone who buys an electric vehicle. At the state level, various rebates and subsidies apply, with California having some of the largest incentives in place for people to buy electric vehicles, given Governor Jerry Brown's goal of having five million zero-emission cars in use by 2030

But while governments back Tesla’s manufacturing in the name of going green, the subsidies for electric-car purchasers flow disproportionately to the affluent. A 2015 study by the Energy Institute at the Haas School of Business at the University of California at Berkeley found that 90 percent of EV tax credits went to the top 20 percent of income-earners in the United States. The most recent data on Tesla drivers specifically is from 2013, showing a median household income of $293,000 for Tesla buyers.

This income disparity has been highlighted by the California Labor Federation in its push for protections for the lower-income workers in the electric vehicle manufacturing business. It was one of the arguments that unions advanced in the successful campaign to have the legislature include in the California Budget Act of 2017 the provisions of Assembly Bill 134, which requires manufacturers of electric vehicles to be “fair and responsible in the treatment of their workers” in order to qualify for the state’s electric vehicle rebate program. 

“The goals of a clean environment and a thriving middle class are inseparable for the labor movement and we are committed to achieving both,” said Angie Wei, the California Labor Federation’s chief of staff, in a statement supporting that provision. While the enforcement specifics of this provision have yet to be finalized, it is a step toward making sure that the subsidies that Tesla receives don’t come at the expense of taxpayers or workers. 

 

NEITHER THE UAW nor the workers themselves can comment on what a positive decision in the NLRB case against Tesla may mean, but hearings will begin again in September, with a judge likely to make a ruling that month.

If Tesla is to live up to its promise of “changing the world,” it needs to change its way of doing business. This week, Musk has tweeted that he may take the company private, chiefly to avoid the shorting of Tesla stock and the hectoring of company critics who note how the company has failed to meet the goals Musk set for it. 

But changing the world, assuming Musk means for the better, also requires creating a secure workforce that enlarges the middle class—not to mention, the electric-car-buying public. Henry Ford understood that dynamic when he doubled workers’ wages in 1914. Tesla could look to unions as a source of strength, rather than an existential evil threatening the libertarian ethos—many unionized factories have efficient production lines and copious amounts of experience, while Tesla is falling constantly behind in its production goals

“I believe in their statement,” says Moran, referring to Tesla’s stated mission of bringing sustainable cars to the mass public. “But Elon Musk has to respect and give their workers the quality of life they need.”

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