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Tesla paid $55 per hour to factory builders

Tesla paid $55 per hour to factory builders

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Tesla continues to push back on a story reporting that it used underpaid foreign labor to build an automotive paint shop at its Fremont, CA factory. Tesla CEO Elon Musk tweeted a letter from its primary contractor, Eisenmann, stating that Tesla paid ISM Vuzem, the subcontractor at the heart of the scandal, $55 per hour, per employee — that's far above the $5 per hour that The Mercury News said some employees were being paid to build the paint shop.

"This rate gave ISM Vuzem full opportunity to pay its workers appropriately," said Eisenmann president Mark West in the letter to Tesla. With regards to the accusations of visa violations, Eisenmann says it was not involved in the visa process at all and that it is investigating all the allegations from the article.

In a tweet, Musk wrote "we still need to make sure that the injured person is taken care of, but less and less of the Merc story appears to be true."

Musk also noted that Tesla did not take advantage of low-cost labor as Tesla paid $55 per hour for the sub-contracted workers. Though that $55 per hour does include added costs for workers like healthcare and other administrative fees, if ISM Vuzem paid its employees $5 per hour, it would appear that the subcontractor pocketed the difference.

The letter from Eisenmann says that it requires compliance with all "permits, fees, notices, and compliance with laws" in all its contracts, and that it is "committed tor our employees and business partners to offering fair and appropriate working conditions and salaries." Eisenmann also says that it is revising its procedures relating to how its suppliers deal with labor regulations and obligations, and promises "our comprehensive commitment and cooperation."

In a separate statement, Eisenmann said it was hiring auditing firm KPMG to determine whether or not the allegations are correct, and that ISM Vuzem has promised its full cooperation in the investigation. Eisenmann said that if the allegations are confirmed, it will end its business relationship with ISM Vuzem. Additionally, Eisenmann said it was examining all contracts with its suppliers for similar issues.

"We care about doing what's fair and just," Musk wrote in a tweet. "Don't always get it right, but intent is always there and we make amends when wrong."

Musk's tweet, with the full letter from Eisenmann:

Update 6:40PM ET: Added comment from Eisenmann.