Tesla Exploiting Cheap Labor To Make Its Factories?

H

HardOCP News

[H] News
Joined
Dec 31, 1969
Messages
0
How in the world does stuff like this happen and no one takes the blame? Visa violations aside, I find it hard to believe Tesla didn't know they were only paying $5 an hour to the more than a hundred people that were upgrading one of its plants when the average wage in the area is 10x that.

The unemployed electrician had no qualifications to oversee American workers and spoke only a sentence or two of English. He never set foot in South Carolina. The companies that arranged his questionable visa instead sent Lesnik to a menial job in Silicon Valley. He earned the equivalent of $5 an hour to expand the plant for one of the world’s most sophisticated companies, Tesla Motors.
 
If they sell this over priced shit in America, at least hire Americans to build the thing.
 
This sure makes for good headlines but Tesla is not at fault here.

They used a contractor that ended up having shady practices. Is it really on Tesla to vet them completely? That defeats the purpose of contracting anyone. At that point they'd need another HR arm to hire for that kind of labor which which is exactly why they contract out.

They get a list of companies that bid for business and choose what looks good on paper based on price/time lines.
 
SvenBent said:
Ah i see . The perfect it happens every where so its OK argument.
I guess rape and murder is OK too then? happens everywhere right ?
Click to expand...

No where in his post did he say it was OK. This does happen all the time and everywhere.
 
SvenBent said:
Ah i see . The perfect it happens every where so its OK argument.
I guess rape and murder is OK too then? happens everywhere right ?
Click to expand...
Only if the rapists and murderers lobby Congress to change the laws to make it OK.

acairman said:
No where in his post did he say it was OK. This does happen all the time and everywhere.
Click to expand...
It certainly looked implied to me. As in this is so commonplace it doesn't even warrant attention and we should just accept it.
 
I don't think Tesla is at fault here for this specific chain of events. That being said, they can still do something about it if the legalities allow them to drop the specific contractor.
 
Sonicks said:
This sure makes for good headlines but Tesla is not at fault here.

They used a contractor that ended up having shady practices. Is it really on Tesla to vet them completely? That defeats the purpose of contracting anyone. At that point they'd need another HR arm to hire for that kind of labor which which is exactly why they contract out.

They get a list of companies that bid for business and choose what looks good on paper based on price/time lines.
Click to expand...
Because when a bid comes in so low that it seems outrageous, it should be thrown out. Happens all the time with companies that are a "bit" more honest. You really believe Tesla did not know about this? Get real..... When you are spending money for this stuff, you know where its going.
 
Pretty shitty of Engadget to use a headline that blames this on Tesla. The only thing they're guilty of is picking a contractor who subcontracted out to a shitbag company.
 
doz said:
Because when a bid comes in so low that it seems outrageous, it should be thrown out. Happens all the time with companies that are a "bit" more honest. You really believe Tesla did not know about this? Get real..... When you are spending money for this stuff, you know where its going.
Click to expand...

I can see that you have no idea how this contracting works.

Tesla pays the contractor XXXX amount of dollars, then they go hire people to fill the jobs for however cheap they can get them. The contractors rake in all the money and the workers get screwed. A local contracting house near me for GM was getting paid ~$25/hr per worker they brought in but only paying the workers $18/hr or so. GM sees the cost of $25/hr not the lower wage.
 
tetris42 said:
Only if the rapists and murderers lobby Congress to change the laws to make it OK.

It certainly looked implied to me. As in this is so commonplace it doesn't even warrant attention and we should just accept it.
Click to expand...
I don't see where I implied anything. Are we reading the same English?
 
Time2Kill said:
I can see that you have no idea how this contracting works.

Tesla pays the contractor XXXX amount of dollars, then they go hire people to fill the jobs for however cheap they can get them. The contractors rake in all the money and the workers get screwed. A local contracting house near me for GM was getting paid ~$25/hr per worker they brought in but only paying the workers $18/hr or so. GM sees the cost of $25/hr not the lower wage.
Click to expand...

I've had this happen to me and the way I found out about it was because a document was printed out by HR and they accidentally sent it to my work printer. I pick it up seeing my name on it and see that while I was getting paid $14 an hour for my work at the time, they were paying out closer to $23 for me. This was simply pay for me specifically, in addition to what they paid the contracting firm. I was a tad peeved to say the least.
 
infinitywulfy said:
I've had this happen to me and the way I found out about it was because a document was printed out by HR and they accidentally sent it to my work printer. I pick it up seeing my name on it and see that while I was getting paid $14 an hour for my work at the time, they were paying out closer to $23 for me. This was simply pay for me specifically, in addition to what they paid the contracting firm. I was a tad peeved to say the least.
Click to expand...

Yea, a couple of my uncles were laid off from GM then rehired back into GM by contractors that did this. They worked like that for 5 or 6 years, all while the contractor was making $8 or so per hour that they worked that entire time. Not a bad gig at all for the contractor.
 
Just thinking out loud here, but;

The practices let those contractors finish crucial factory work at a fraction of the cost of using American labor, which could cost as much as $52 per hour for similar tasks.
Click to expand...
Not I did a little math, $52 an hour is the equivalent of a $100 a year salary. Now to be fair, the quote did say "the average wage in the area is 10x that, (sic $5 an hour)." But, I have seen that exact plant in San Jose and the area is full of medical and IT workers. I was taking a Comptia boot camp. So I am thinking to myself, what do construction workers make in California?

Now I started out by taking my current salary as an IT guy making $75K and found that if I moved to San Jose I'd need to make $140K. It always helps to have a reference point.
Then I checked locally and in San Jose for salaries for construction workers.

By this site, construction workers in Tucson, AZ make $32K a year, which is 15% lower than average Construction Worker salaries for job postings nationwide.
The same site lists San Jose as $54K, 41% higher than average Construction Worker salaries for job postings nationwide.

By my figures, a construction worker in Tucson on average earns $16.50 an hour. Now this is lower than the national average and it's just an estimate but it works for comparison purposes.

Best I can tell, San Jose is way over priced so I can fully understand why a company would contract out their labor.
Still, even underpaid construction workers across the country earn three times the $5 reported in this article.

Now putting this into an international context as a Net Income dollar amount.
Construction Sector Average Salary Income - International Comparison

USA $ 2,584
UK $ 2,738
Germany $ 2,166
Italy $ 1,616
Czech $ 497
Poland $ 414
Slavakia $ 350

I've seen this before. It sure sounds bad to a point but, you should also keep in mind, 5$ an hour is $800 a month and that is almost double what people in some of those countries make.

How many of you accept work in another country for double your current salary even if you knew people in that country get paid 5 times that amount?

Tesla contracted to have their plant expanded and a General Contracting company had to bid for that work, and they had a sub-contractor, who in turn bid as well for their position on the contract. At least this is the normal way these things go.

Does anyone see where things happened differently on this construction work? Did Tesla not have the worked bid on as is normal?
 
doz said:
Because when a bid comes in so low that it seems outrageous, it should be thrown out. Happens all the time with companies that are a "bit" more honest. You really believe Tesla did not know about this? Get real..... When you are spending money for this stuff, you know where its going.
Click to expand...

Not entirely.

You would need a detailed list of expenditures to know how much of the contracted work was funded this way. The General Contractor usually bids the subs out, meaning he has plumbers, electricians, foundation work, brick work, air conditioning, etc, all subed out usually to different companies. So it comes down to this one subcontractor who used foreign labor on the job and what percentage of the costs are tied to this labor. We would need much more detail to show that this actually added up to a large amount of cost savings. I don't see those details available here.
 
You think this company came in with a close bid? Really? Well aware of how bidding works.... What I am saying is during the bid process, I would bet you money this contractor was low, way low. They knew what they were doing and what they were going to pay so they buy the job cheap and use cheap labor. Plenty of bids are thrown out everyday due to this as a company knows how much someone should roughly cost to build after pulling quotes and numbers. But then again, why put Tesla on the hook for anything?
 
Hypergreatthing said:
I don't see where I implied anything. Are we reading the same English?
Click to expand...
Well feel free to correct me then. You said "It's a business. This happens all the time everywhere." I read that as this is 100% normal and is so commonplace it's not even worth paying attention to. While it is unfortunately very prevalent, I still think it's good when attention is called to it.

I mean if you're intent wasn't that this is so commonplace as to be unremarkable, what was your intent in saying that?
 
It's a contracting company, so Tesla pays the contracting company, for example, $25-$30/hour and assumes that the workers get half that. There's no reason for them to think that anyone would make below minimum wage (isn't that illegal?)


lcpiper said:
How many of you accept work in another country for double your current salary even if you knew people in that country get paid 5 times that amount?
Click to expand...
Depends on the cost of living. That said, the issue here is that minimum wage is 50% over what the contractor paid. So far, I don't think Tesla has done anything wrong, but unless labor laws allow construction workers to be paid below minimum wage, the contracting company should be fined within an inch of bankruptcy and the workers compensated at the going rate for past work.
 
doz said:
Because when a bid comes in so low that it seems outrageous, it should be thrown out. Happens all the time with companies that are a "bit" more honest. You really believe Tesla did not know about this? Get real..... When you are spending money for this stuff, you know where its going.
Click to expand...

Why does everyone believe the bid was so low? In contacting situations, the paying company typically has no idea what the contracting agenc(ies) is/are paying this guy. It just as easily could have been a competitive bid where the contracting agencies profit heavily while paying the guy pennies. Everyone just assumes that since Tesla benefited from it, they clearly did something wrong here. I'm not saying they're innocent, I'm simply saying declaring them guilty after one internet video is ludicrous and forces assumptions to replace unknown facts.
 
Hypergreatthing said:
I don't see where I implied anything. Are we reading the same English?
Click to expand...

If that was not the implied conclusion om sorry for my comment to you. It seemed that way with the structure of your sentence.

But if we have to be all to the rule lawyers then you are again in the wrong it doesn't happen EVERYWHERE and ALL the times. Those words a pretty big absolutes, and plenty of places it doesn't happen. So if we are reading the same english, can you agree with me that some kind of "translation" of what you wrote had to take place. It just didn't fall in the way you intended it to go?
 
ccmfreak2 said:
Why does everyone believe the bid was so low? In contacting situations, the paying company typically has no idea what the contracting agenc(ies) is/are paying this guy. It just as easily could have been a competitive bid where the contracting agencies profit heavily while paying the guy pennies. Everyone just assumes that since Tesla benefited from it, they clearly did something wrong here. I'm not saying they're innocent, I'm simply saying declaring them guilty after one internet video is ludicrous and forces assumptions to replace unknown facts.
Click to expand...

Just ignore him, being a troll and/or has no idea what he's talking about.
 
Tesla could've asked for worker wages to be broken down with the bid and/or other requirements to be met. This way it is pretty easy to work through the bids and understand how the numbers were constructed.

However too many companies turn a blind eye on this way to implement safeguards and rather claim ignorance.
 
SvenBent said:
Ah i see . The perfect it happens every where so its OK argument.
I guess rape and murder is OK too then? happens everywhere right ?
Click to expand...

Apparently so, if you have diplomatic immunity.

There is a catch for everything.

Wanna buy a bridge in the Ukraine?
 
Low bidder wins contract.
Low bidder wants to make money.
Who gets the shit end of the stick?

Americans pay less for their cars, do you think they give a shit about the laborers.

Why is this different than Apple who builds shit in China so they can make shit-tons on their iPhone?
 
magoo said:
Low bidder wins contract.
Low bidder wants to make money.
Who gets the shit end of the stick?

Americans pay less for their cars, do you think they give a shit about the laborers.

Why is this different than Apple who builds shit in China so they can make shit-tons on their iPhone?
Click to expand...

Apple isn't breaking any laws. This video is trying to claim Tesla did.
 
doz said:
You think this company came in with a close bid? Really? Well aware of how bidding works.... What I am saying is during the bid process, I would bet you money this contractor was low, way low. They knew what they were doing and what they were going to pay so they buy the job cheap and use cheap labor. Plenty of bids are thrown out everyday due to this as a company knows how much someone should roughly cost to build after pulling quotes and numbers. But then again, why put Tesla on the hook for anything?
Click to expand...

Well it obviously wasn't so bad that the Feds see something illegal with it.

Problem is this, without numbers we can't say anything at all significant. You have an already huge building being expanded on. It's going to cost a bunch of money. Now it's kind of misleading to quote construction labor costs for San Jose when San Jose is 41% higher than the national average, almost double. At the same time, if they were paying $5 an hour as reported, that's a third of the price if you were paying a crew in Tucson which is 14% below national average. Labor costs only make up so much of the overall price tag. Obviously someone is going to bring in outside labor when local labor is so high. The only real question is who's outside labor and at what price.

Do you want to back up this reporter's claims, dig into the actual cost of the expansion job, try and find out what the subcontractor bid, how much in labor, then figure out how many men he had hired at what rates. And then you can figure out what the real impact was of this one company hiring foreign labor on this specific job?

I don't want to dig into all that any further than I already have. They got paid one third of what a crew from Tucson would have gotten for a job here in AZ. Guys in San Jose are making three times when the guys in Tucson are getting paid. Anyone want to guess if Tucson is the lowest in the country or what the lowest pay scale is in the US? I do not know where that is myself.

So while ccmfreak points out that Tesla may not have actually been the real beneficiary of this cheap labor, I put forth that unless you have the actual numbers, you have no real idea what the actual impact of this cheap labor really comes to.

But I do know one thing. That even if some people want to think that these guys were getting payed 1/10th of what a crew from San Jose would have charged, they also were only paid 1/3rd of what a Tucson crew would have charged. Still, minimum wage should be coming into someone's mind at some point.
 
Hypergreatthing said:
It's a business. This happens all the time everywhere.
Click to expand...

magoo said:
Low bidder wins contract.
Low bidder wants to make money.
Who gets the shit end of the stick?

Americans pay less for their cars, do you think they give a shit about the laborers.

Why is this different than Apple who builds shit in China so they can make shit-tons on their iPhone?
Click to expand...

Yup, standard world wide business practice. This is why you gotta research and oversee contractors. UNION FTW
 
Time2Kill said:
Apple isn't breaking any laws. This video is trying to claim Tesla did.
Click to expand...

Feds already said Tesla didn't break any US laws.

Maybe the video is just garbage stuck online by San Jose workers pissed off they didn't win the bid at their $52 an hour.
 
Sonicks said:
This sure makes for good headlines but Tesla is not at fault here.

They used a contractor that ended up having shady practices. Is it really on Tesla to vet them completely? That defeats the purpose of contracting anyone. At that point they'd need another HR arm to hire for that kind of labor which which is exactly why they contract out.

They get a list of companies that bid for business and choose what looks good on paper based on price/time lines.
Click to expand...

Like Apple, after the Foxconn scandal, they should have an audit and accountability report.
 
Time2Kill said:
I can see that you have no idea how this contracting works.

Tesla pays the contractor XXXX amount of dollars, then they go hire people to fill the jobs for however cheap they can get them. The contractors rake in all the money and the workers get screwed. A local contracting house near me for GM was getting paid ~$25/hr per worker they brought in but only paying the workers $18/hr or so. GM sees the cost of $25/hr not the lower wage.
Click to expand...

Yes, but Tesla should have an accountability report when hiring personnel (contract or not) It's part of being an ethical business.

Hershey did pretty much the same thing. They sent contracting recruiters to colleges in Europe to hire kids promising them jobs in America. After room and board was deducted, they hardly made squat. It became a scandal, and if I remember correctly, a lawsuit....found the article. The students won.

Hershey Student Guest Workers Win $200,000 In Back Pay After Claims Of Abusive Conditions
 
DigitalGriffin said:
Like Apple, after the Foxconn scandal, they should have an audit and accountability report.
Click to expand...


Why?

Why is this in Tesla's lap and not the sub-contractor company alone? Not that anyone actually broke the law or did anything wrong in the eyes of the law.

I am kind of thinking you should have at least a law broken or something first before you go on a witch hunt.
 
Probably because US Labor is greatly overvalued while requiring qualifications that are far beyond what is necessary for the work. When you need an associate degree or better for secretary work there is a major issue. We also have all these feel good regulations that have no practical effect other than raising the cost of labor and the product. This is what happens when the metric used by politicians is how many laws / regulations they passed over a given time.
 
Everybody but me is overvalued, there is no reason to pay a person that is not me more than any worker in the Punjab would get.

This is entitlement, plain and simple. People that are not me are just leaches.
 
Without "low paying" jobs, those workers would likely be on welfare or out on the street. the "low paying job" provides them with productivity and income and forward opportunity that they can not get in their home country. They would not migrate here if the under-the-table market (which where the real free market is driven because feel good nonsense labor and wage regulations) was not better for them then what they have at home. If the low wage was not better than their homeland, they would be in their homeland. If the pious moral high ground economic dolts would open their eyes they would realize that they would have to boycott every large company on the planet, as they all rely on workers at the subcontracted level who are paid less than minimum wage.
 
I've been told for years that "they're just doing jobs Americans won't do".

Government and business have been in a perpetual 69 for decades.
 
You must log in or register to reply here.
Back
Top