By Stas Margaronis, RBTUS
Elon Musk’s disrespectful response to financial analysts’ questions about Tesla’s financial viability, last week, was a shock to people used to his adept communications skills.
Musk Defensive Response To Capital Spending Questions
The sudden inability to tolerate mild questioning may worry those who have applauded Musk’s re-establishment of U.S. manufacturing and competitiveness building new rocket technology at Space X, cheaper and more powerful batteries for homes and for leading-edge Tesla electric cars.
Analysts are particularly worried that Tesla is burning through its cash while failing to meet production goals for its new Model 3 cars. They worry the company may need a new cash infusion in order to survive.
Musk’s response was disquieting.
During the analysts’ conference call, Tesla’s chief financial officer Deepak Ahuja was asked about Tesla’s capital spending when Musk interrupted, saying: “Excuse me. Next. Next. Next. Boring bonehead questions are not cool. Next.”[1]
Charges Tesla Is Anti-Worker
Musk’s impatience with analysts’ focus on capital spending comes at a time when Tesla is facing growing criticism that also is not handling its employee relations very well. Tesla’s problem achieving production targets for Model 3 cars is happening at the same time as growing complaints by employees and outside observers that the company is anti-worker and that its anti-union attitude is in tune with union busters of the 1930s.
Attempts to contact Tesla were unsuccessful.
Do Silicon Valley Companies Place Code Before People?
Silicon Valley’s progressive, innovative, renewable energy, next generation image is being contradicted by an ugly other side: allegation of anti-unionism at Tesla, allegations of indiscriminate privacy exploitation at Facebook and allegations of driver mistreatment as well as sexual harassment at Uber.[2]
Innovative software applications helped make Musk rich and propelled success at Space X and Tesla. Innovative software also propelled Zuckerberg’s success at Facebook and supported Kalanick’s success at Uber.
However, the culture of placing code before people has begun to backfire.
The high reliance on software driven robotics for car manufacturing seems to have blinded Tesla management to the need for more workers in the production process, a situation Musk now concedes.
Tesla Conflict With Labor May Hurt Productivity
In addition, there are allegations that Musk and Tesla tolerated unsafe working conditions at Tesla’s Fremont, CA plant and may have fired workers seeking representation by the United Autoworkers (UAW) contributing to the company’s the production crisis of the Model 3 car.
The result is that worker complaints have prompted the UAW to organize workers at Tesla creating a conflict between labor and management just as the company struggles with productivity issues and would seem to need workers cooperation the most.[3]
A Tesla worker, Jose Moran, wrote: “Injuries, poor morale, unfair promotions, high turnover and other issues aren’t just bad for workers — they also impact the quality and speed of production…They can’t be resolved without workers having a voice and being included in the process.”[4]
If these assertions are correct, then Tesla’s challenge in meeting its target for the Model 3 car production may rely on changing the way Tesla treats its employees.
So, the cash burn, that financial analysts are worrying about, may not be the fundamental issue.
Musk may need to change the narrative by addressing employee complaints and giving workers a stake in this fight, including recognition of the UAW as their union representative.
Unions May Not Be ‘So Yesterday’
Younger people reading these lines may not agree. Unions may seem outmoded and ‘so yesterday.’ However, the success of unions in the 1930s helped boost wages and benefits for millions of workers, pull the United States out of the Great Depression by generating greater buying power and propelled working people into the middle class as car owners and homeowners.
Unionization may seem to be an outmoded idea in 2018, but at Tesla it is an idea that seems to be making a comeback.
[1] https://www.ft.com/content/2239a0c0-4e65-11e8-a7a9-37318e776bab
[2] https://www.theguardian.com/us-news/2017/jun/17/uber-drivers-homeless-assault-travis-kalanick
[3] http://www.autonews.com/article/20180318/OEM01/180319753/uaw-tesla-relations-turning-point
[4] http://www.autonews.com/article/20170209/OEM01/170209795/tesla-plant-unionizing-effort-gains-momentum-in-calif.