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Tesla's New Factory Project Imported Foreign Laborers (mercurynews.com)
An anonymous reader writes: "Overseas contractors are shipping workers from impoverished countries to American factories, where they work long hours for low wages, in apparent violation of visa and labor laws," reports the Bay Area Newsgroup. For example, "About 140 workers from Eastern Europe, mostly from Croatia and Slovenia, built a new paint shop at Tesla's Fremont plant, a project vital to the flagship Silicon Valley automaker's plans to ramp up production of its highly anticipated Model 3 sedan..."
This "hidden workforce" arrives on B1/B2 visas, which federal authorities acknowledge are subject to "widespread abuse" in Silicon Valley. The newspaper reviewed visa, court, and payroll documents, and conducted dozens of interviews, identifying Tesla's small third-party Slovenian subcontractor ISM Vuzem as the company who ultimately recruited many of the workers.
While most of the imported workers were happy with their wages, one worker was earning the equivalent of $5 an hour while his American counterpart was earning as much as $52, and they worked 10-hour days -- without overtime -- up to seven days a week.
This "hidden workforce" arrives on B1/B2 visas, which federal authorities acknowledge are subject to "widespread abuse" in Silicon Valley. The newspaper reviewed visa, court, and payroll documents, and conducted dozens of interviews, identifying Tesla's small third-party Slovenian subcontractor ISM Vuzem as the company who ultimately recruited many of the workers.
While most of the imported workers were happy with their wages, one worker was earning the equivalent of $5 an hour while his American counterpart was earning as much as $52, and they worked 10-hour days -- without overtime -- up to seven days a week.
Well America is much better at efficiency than other countries. So one person and do a job of 10. So you hire one person at 5 times the foreign counterpart if they can do 10 times the work they are worth it.
While there is a lot of complaining about the US education system, most countries cheat on their statistics. Where say the average high school graduate in the foreign country will have A/B Grades on skills test while the US has C Grades on skill tests. Is often because these countries will kick out the underperforming students and put them in trade schools.
So the factory worker in the US with a High School degree, often has better Reading Writing and Critical Thinking skills than a cheaper worker who had been placed in Labor training after elementary school. Allowing them to work with less management, and oversight, as well being able to understand more complex instructions.
Do not count the US out just because of higher wages. Americans work hard, and they work smart as well. The trick is to show that to the businesses who make the decisions, because otherwise they just pick the Penny Wise and Pound foolish solution.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Ever eat at a grocery store? Guess what? You are eating products that were worked on by imported labor and I bet you aren't complaining about the lower prices. This is nothing unusual and I don't think less of Tesla for trying to get a better deal. As long as Tesla followed whatever regulations are in place for bringing in their workforce and paying them, I don't really see a problem here. If they broke some laws then appropriate and proportional punishment should follow. If the laws are allowing something they shouldn't then the answer is to change the laws. See some of the H1B abuse if you need an example of laws that are being abused.
While most of the imported workers were happy with their wages, one worker was earning the equivalent of $5 an hour while his American counterpart was earning as much as $52, and they worked 10-hour days -- without overtime -- up to seven days a week.
If someone is willing to pay the American worker $52/hour (roughly $100K/year with 8 hour work day) and gets good value for their money then where is the problem? On the other hand I cannot imagine paying $52/hour for that sort of work unless I had no alternative. Heck, my little company doesn't pay skilled trades $52/hour and we're a pimple on a gnat's ass in size compared with Tesla. I respect skilled trades immensely but Tesla would be nuts to pay that sort of labor rate if they could get the same work done for less. Just because this hypothetical American skilled trade worker is asking $52/hour doesn't mean Tesla or anybody else should be prohibited from looking for a better deal. Would you pay 10X the cost for work on your house solely because the worker is a US citizen and not because they do any better work? If you say yes I'm going to call you a liar.
If I need a job done, I look for whomever can do it on time, correctly, and inexpensively; the latter generally being the least important. Upon settling upon a particular vendor, I may do some vetting, but exactly how much am I supposed to do? Particularly knowing there are already laws and enforcement bureaus in place to handle transgressions, I'm not likely to conduct my own deep investigation.
So Tesla hires Eisenmann to do a job, build a paint shop. That company, and at least one (ISM Vuzem), possibly more, position themselves to maximize the profit from the money Tesla is paying by hiring skilled workers made cheap through exploiting the visa system, and run afoul of the law. How much of that blame are we supposed to lay at Tesla's feet?
The the article mentions Tesla's name 39 times, including the title, 14 times in the first 16 paragraphs. Eisenmann is mentioned twice in the same space, and only in paragraphs 14 and 15 (13 overall). Vuzem is only mentioned once in that opening space (22 overall).
It looks like the Mercury News is intentionally bashing Tesla to grab headlines, particularly by front-loading the name. They could have just as easily reported that there is a huge problem in the United States with contractors hiring overseas workers under false pretenses, and Tesla was the latest victim.
I'm sorry, but your opinion seems to be wrong.
It's more of a shock that anyone is still paid well considering hype literal billions of cheap labor outside America.
Try trillions of cheap labor. We have this deluded notion that we can have both the highest labor costs in the world AND keep labor intensive work. That does not and cannot work over the long term. China has 4 people for every 1 in the US. That means all other things being equal, labor costs in China will be 1/4 that in the US on average. There is no reason China cannot have productivity equal to that of the US. Therefore it is illogical to continue to believe that the US can continue to have exceptionally high wages in the face of competition with a clear labor cost advantage.
Sure, we could fix the visa problem, but if companies are forced to use expensive (globally speaking) labor, they'll just leave the country.
Some will, some won't. If they get good value for money they'll stay. If the work can be done comparably well for less elsewhere then they'll leave. Honestly we should expect US wages to experience some form of reversion to the mean. If you want to have the highest wages in the world you should expect labor intensive work to go elsewhere. That's just Economics 101.
I suggest everyone start saving their money, because the gravy train is ending.
If the US wants to stay ahead then we will need to stop spending money on stupid things (wars, oversized military, interest on national debt) and start spending money on R&D, education, infrastructure and an efficient health care system. You know, things that will actually improve quality of life and incomes and productivity. Failure to do this will eventually result in the US experiencing a reversion to the mean in GDP per capita.
As much as I'm not a Trump fan, one of the things he's right about is that visa abuse is rampant. The original intent of the H-1B program is good; our company is a multinational and we bring lots of very smart, talented employees to the US to work with us. The huge loophole is the body shops and IT service providers who just use it as a relief valve to earn more margin on IT outsourcing deals. The thing I don't like seeing is companies who just decide they don't want a 25-year veteran employee anymore, call up Tata or Infosys, and have a less-skilled replacement shipped in next week (that the veteran has to train to get his severance package.) I don't know how many more stories like that will have to be written before people realize this is not a good way to conduct business.
The problem with the visa abuse, the trade deals, etc. is that to make a dent, every company across the board needs to be affected equally and immediately. The only way to do that is to take away the visa programs for everybody, or unilaterally cancel a trade deal overnight. This would be the only way to ensure no company still had an advantage. One of the reasons companies offshore IT or import cheap H-1B workers from a body shop is because their competitors are doing it. If they don't, their IT costs are higher even if the quality is better. If, all at once, every company suddenly lost access to the loopholes they were exploiting, or that their "IT service partner" were exploiting, the incentive to offshore because everyone else is doing it would disappear.
Americans today are horrendous at efficiency because their government made them absolutely inefficient.
Don't let a little thing like actual facts contradict your ideological rant. Sadly for your argument the US is among the most efficient and productive workforces in the world. (#3 in GDP per capita behind only Norway and Luxembourg) The notion that the US government has made the US hugely inefficient is not supported by any actual evidence.
As to what makes a person efficient - capital savings and investment into labour saving devices.
Which as it turns out the US economy is impressively good at. What do you think the computer you are typing this on is but a labor saving device? The US leads the world in utilization of many forms of automation.
Tesla hired a German contractor, Eisenmann, to build a paint shop.
Eisenmann then hired ISM Vuzem, a Slovenian company, who then hired the said Slovenian electrician.
Who then had an accident, ended up in a hospital and who is now suing all three for following reasons:
From TFA:
Eisenmann USA wrote letters to the U.S. Embassy on behalf of Lesnik and as many as 200 foreign workers stating they would supervise employees at a U.S. auto plant.
Most of the Vuzem workers were nonsupervisory laborers and tradesmen.
Tesla issued company security badges to the foreign workers, recorded their time on site and shared responsibility for setting safety conditions.
Vuzem required foreign employees to regularly work between 60 and 70 hours a week.
Vuzem paid Lesnik an average of 800 euros per month, or about $900, for a rate of less than $5 per hour. Lesnik was promised an equal amount when he returned home, but the company never paid the balance.
The companies violated wage and employment laws and benefitted from the cheap labor of foreign workers.
Workers were promised $12.70 an hour based on a standard workweek.
The suit estimates they are due $2.6 million in overtime and premium pay.
All in all, Tesla is the least responsible party in this case.
In fact, they could probably sue Eisenmann USA for failing to meet their requirements "to hire and pay their workers appropriately", as they claim is their practice.
That is, unless it turns out they were simply turning a blind eye and just looking at the bottom line.
Like everyone else.
More from TFA:
Vuzem provides teams of Eastern European workers to build manufacturing plants in Europe and the U.S. It counts Mercedes-Benz, Toyota, Volkswagen, Ford and Saab as clients, according to its website.
In 2003, an Alabama sheet metal workers union protested Eisenmann hiring a contractor that brought in Polish workers to complete a Mercedes-Benz paint shop.
The company was cleared of any wrongdoing by Immigration and Customs Enforcement.
Officials with the agency declined to answer questions about the investigation and denied a Freedom of Information Act request for materials related to the probe.
Eisenmann declined to respond to written questions about the case.
Ten years later, ICE fined Infosys a record $34 million for circumventing H-1B and B1 regulations and unlawfully using visa holders for skilled work around the country, among other offenses, according to a court settlement.
This month, Bitmicro Networks Inc. of Fremont was fined about $168,000 for giving substandard wages to workers brought in from the Philippines.
It's not a case of Tesla or emigrants or cheap labor.
It's just another example of corporations in the US being subsidized at the expense of US citizens.
Everyone does it, everyone pretends it is not an issue... until they get sued.
Mit der Dummheit kämpfen Götter selbst vergebens
Hell, even their CEO is a foreign worker!