All is not well in the non-GAAP paradise known as Tesla's Gigafactory, where labor tensions are suddenly running high.
According to Bloomberg, at least 100 workers at the construction site for Tesla's massive (and taxpayer subsidized) battery factory near Reno, Nevada, walked off the job Monday to protest use of workers from other states, a union official said.
It used to be that workers were upset when foreigners were brought in; now it's workers from out of state.
Local labor leaders are upset that Tesla contractor Brycon Corp. is bringing in workers from Arizona and New Mexico, said Todd Koch (no relation to the billionaire family by the same name) president of the Building and Construction Trades Council of Northern Nevada.
The escalation in interstate labor tensions mirrors the fragmentation of Europe, where with an imminent collapse of the Schengen customs union, members of the neighboring EU countries will soon revolt when working side by side. Perhaps it only makes sense that with globalization now running in reverse, and with Europe falling apart at the seams, that the US will follow suit by defederalizing.
The local union's the soundbites certainly indicate that "out-of-state workers are clearly not welcome."
"It’s a slap in the face to Nevada workers to walk through the parking lot at the job site and see all these license plates from Arizona and New Mexico,” Koch said in an interview. Those who walked out were among the hundreds on the site, he said.
Construction work at the $5 billion, 10-million-square-foot factory has been proceeding ahead of schedule. Tesla said in an e-mailed statement that the nonunion contractor involved in the dispute Monday, which it didn’t identify by name, is using more than 50 percent Nevada workers and that more than 75 percent of the factory workforce is residents of that state. Tesla didn’t say how the walkout is affecting work at the site.
Of course, the only reason for that is because otherwise the generous subsidies provided to Elon Musk by Nevada taxpayers would be voided. As a reminder, in September 2014, Musk and Nevada Governor Brian Sandoval announced a deal that included as much as $1.25 billion in tax breaks over 20 years and a requirement that half the so-called gigafactory’s expected 6,500 permanent positions go to Nevada residents.
It said nothing about where the other 3,250 should come from, although it appears that to local labor unions, anything short of 100% "local" is increasingly unacceptable. Furthermore, it is unclear just what sparked the workers' anger if indeed at least 75% of the Gigafactory's worker are local.
“Today’s activity stems from the local Carpenters Union protesting against one of the third-party construction contractors that Tesla is using," the automaker said. “Their issue is not with how Tesla treats its workers."
And Tesla will continue treating it workers well as long as it is ultimately taxpayers who foot their paycheck. Once that changes, pink slips will galore, for both in and out of state workers alike.
In the meantime, we can't wait to see what happens if Uber's Gigafactorians stage a Megastrike.
Finally, while we would like to take Musk at his word, one wonders what the real reason for this quasi-labor strike truly is and if next quarter Tesla, whose GAAP vs non-GAAP revenue and EPS looks something like this..
... won't include a "strike-adjusted" non-cash flow metric to go with the rest of its income statement gibberish.