Tesla Motors Inc. (TSLA) Responds To Report Guest Workers Were Allegedly Brought To US To Expand Factory

Tesla Motors often says it pays the highest wages in the U.S. automotive industry, but an investigative report in the San Jose Mercury News accuses the electric car company of using foreign guest workers, earning as little as $5 an hour, to expand the company’s factory in Fremont, California.

The story, which ran Sunday, elicited both a denial from the company that it was aware of any such thing going on, and a promise to “do right” by the workers highlighted in the report.

“We do not condone people coming to work at a Tesla facility, whether they work for us, one of our contractors or even a subcontractor, under the circumstances described in the article,” Tesla said in a response posted on its website. “Creating a new car company is extremely difficult and fraught with risk, but we will never be a company that by our action does, or by our inaction allows, the wrong thing to happen just to save money.”

According to the Mercury News, Gregor Lesnik, a 42-year-old Slovenian electrician, was among about 140 workers brought to the United States under visas designed for business travel, known as B-1 and B-2 visas. Neither visa is designed to bring in laborers like Lesnik.

Recruited by ISM Vuzem, a small Slovenian company, and employed by Eisenmann, a German-based manufacturer that was hired by Tesla to build the paint shop at the factory, these workers were paid as little as $5 an hour for jobs that local workers would typically demand 10 times the amount to do, the newspaper said.

Lesnik, who was injured in an accident at the site, was brought to the U.S. for months at a time. He lived in communal housing with his co-workers and worked six or seven days a week. Tesla denies it was aware that Eisenmann had retained the workers hired by ISM Vuzem.

An electrician like Lesnik would fall under a visa category known as H-2B for laborers like welders and electricians. The visa is difficult to acquire because there’s an annual limit on the number that can be issued.

Labor rights advocates have long argued that the government isn’t vetting these visa applications closely enough, which allows recruiters and intermediaries to game the system to bring in cheaper labor. Tesla is investing $1.75 billion this year on numerous projects, including expanding the capacity of its factory production.