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Tesla Firings Spark Protests at Company’s Fremont Plant

Recent firings could impact company's tax breaks in California.

by on Oct.26, 2017

Tesla's firing of hundreds of employees has instigated several employee protests and may have jeopardized tax breaks.

In its search for cash, Elon Musk’s Tesla Inc. has been able to count on the State of California and local communities for support in the form of tax breaks and other types of financial incentives that routinely accompany economic development around the United States.

But the dismissal of hundreds of Tesla employees both in Silicon Valley and in Fremont, California, on the east side of San Francisco Bay, may have put those benefits in jeopardy.

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While the company will not release a number on how many were terminated, estimates range from 700 to more than 1,000. The employees, according Tesla, were dismissed for “performance,” as opposed to laying people off, allows the company to sidestep complying with state law. 

The firings also triggered a protest in front of the big Fremont plant that is the home of the assembly lines that build the Tesla Model S, Tesla Model X and new Tesla Model 3. The protesters, which included former Tesla workers, were joined by local elected officials and clergy members, and carried pro-union signs through the factory parking lot.

“Today we are calling on Tesla, a major employer in our county, to consider the impact that firing hundreds of people has on our community,” said Alameda County Supervisor Richard Valle.

(Tesla raises an additional $500M in cash. For the story, Click Here.)

“These people are not numbers on a spreadsheet – they are our mothers and fathers and neighbors. They deserve to be treated with dignity that honors them as working Americans. We are concerned that workers who raised their voices are among those fired, and we believe they should be reinstated.”

Labor councils of Alameda, San Francisco, San Mateo and South Bay, and the California Labor Federation, East Bay Alliance for a Stronger Economy, Silicon Valley Rising and Working Partnerships USA also have sent letters to Musk protesting the firings and the dismissal of pro-union union employees from the Fremont plant where the United Auto Workers has begun an organizing drive earlier this year.

“After working hard for this company for five years, I was fired without any explanation,” said Mike Williams, a former Production Associate. “I have my most recent performance review, and it says that I was ‘consistently strong.’ I have had no write-ups, no complaints against me. I do not believe I was fired for performance.”

(Click Here for more about Tesla firing “hundreds” of employees.)

Besides factory workers in Fremont, the firings also included engineers at the Palo Alto headquarters and come at a crucial time for Tesla, which is gearing up to produce the Model 3 sedans. Tesla has about 450,000 reservations for what will be the company’s most affordable, all-electric car.

The company also continues to struggle financially, having lost $336 million in the second quarter. Tesla stock dipped in the last week, but is still near record highs.

Tesla could report a $3 per share, according to some analysts. For the year so far, Tesla has lost a total of about $4 per share. The company is also burning through billions in cash as it ramps up production of its Model 3 sedan.

(More Tesla trouble as electric semi-truck delayed again to focus on Model 3 problems. For more, Click Here.)

But the stock price in 2017 has laughed off these losses: it’s up 57%, and at times has surged toward $400 – it’s now trading at $337 per share — Tesla’s market cap, at just south of $60 billion, is larger than Fiat Chrysler Automobiles and Ford, and neck-and-neck with General Motors.

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