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I flatly do not believe that Tesla did not know what was going on. The bid being as low as it was means that the savings were coming from somewhere. Presumably the materials used all had specifications so hard to cut corners there. That leaves labor. Come on, maybe they aren't legally responsible but morally and ethically they made a choice here.

It's hard to believe that Tesla didn't become aware of this after a few months. Just like farmers who can't hire american people to pick their crop with backbreaking labor and low wages and who hides from hiring undocumented workers from mexico, they are morally responsible for treating the workers well.

US politicians should address this situation by working to eliminate b1 visa fraud. If it turns out not to be illegal to do this kind of job, we should change the laws to disallow it.

The other way to fix this is to allow liability for labor law and health code violations to pass all the way up the contracting chain. The only reason Tesla doesn't care is they can insulate themselves from liability via the outsourcing relationship; were Tesla liable for law violations, they'd make sure everything was aboveboard. viz labor board ruling McDonalds is jointly liable for wage violations of franchisees. McDonalds will have a newfound interesting in making sure every person working at McDonalds is correctly paid. [1]

[1] http://www.franchisetimes.com/news/NLRB-McDonalds-Joint-Empl...

Not entirely. Many companies who bid out projects during "off times" would receive preferential bids. In colder climates, if your construction begins in the colder months, construction companies will bid lower since there is less work and do their best to make little to no profit on the job.

That's fairly standard. The downside, most construction companies will have many COs (Change Order)to supplement the work.

Just because a bid is lower doesn't mean the subcontractor is hiring illegal labor.

Parent company that accepts bid isn't morally responsible to check on their subcontractors. If parent company is responsible, imagine the possibilities? Ever subcontractor would then blame the parent company for just about everything since they're not held responsible.

Did Tesla realize that labor wasn't "legal" during the process? Probably...but what now? Stop building the factory? They have investors that don't care about morals or ethics.

>Parent company that accepts bid isn't morally responsible to check on their subcontractors. If parent company is responsible, imagine the possibilities? Ever subcontractor would then blame the parent company for just about everything since they're not held responsible.

What absolves them of responsibility? Exchanging money? If the parent company isn't responsible then imagine what happens: every parent company blames subcontractors for everything as the parent could never be responsible since they only commissioned the project.

You are saying the customer is responsible for how a company achieves something. (Tesla is a customer of the contractor.)

By that procedure of blame shifting, we could basically blame every Volkswagen customer for the diesel emissions scandal because they should have done their due diligence and realized that an engine couldn't perform that well without cutting corners.

VW customers should have realized that.

Just playing devils advocate:

When you go to the grocery store to pick up bananas and coffee and you go for the cheapest of each you can pretty much guarantee that you're purchasing something produced by mistreating workers, spraying of carcinogens, destroying rain forests, etc.

Even if you're not producing it you are supporting it. You might go for the the second cheapest banana, and still not know if it's "good" or "bad", but at least the answer goes from "definitely bad" to "possibly okay".

I understand the realities we live with, but blankly accepting the status quo without at least questioning it shouldn't be defended. Why shouldn't companies be held at least morally/ethically responsible in the same way grocery store customers are, even if none are held legally accountable?

>When you go to the grocery store to pick up bananas and coffee and you go for the cheapest of each you can pretty much guarantee that you're purchasing something produced by mistreating workers, spraying of carcinogens, destroying rain forests, etc.

But I don't know that. I don't follow the latest on the sourcing for the banana markets, cucumber markets, whatever. It's ridiculous to expect that everyone could. What about the mushrooms you bought? The cheese? Depending on the location, the cheapest item could easily be an ethically sourced one.

>You might go for the the second cheapest banana, and still not know if it's "good" or "bad", but at least the answer goes from "definitely bad" to "possibly okay".

Not even close. Second cheapest could just as likely be a more inefficient operation of the cheapest abusive one. Transportation/storage of fruits/veggies is one of the highest components of the cost. The price you end up paying in the store is much less related to abuse than you think.

Consider that people pay a premium for 'local' and/or 'organic'. Either of those could have the most abusive labor practices in the industry and you would be paying more for them than the non-local/non-organic fruit while feeling pretty good about yourself at the same time.

Do you think that Tesla, with all their engineering, job costing, materials science, and cost accounting talent, is unable to estimate the work needed to install the paint shop mentioned in the article?

There is no "magic pixie dust" that Eisenmann had, that they used to sprinkle over their materials that would make installation of the mechanical systems any less labor-intensive than their competitors.

Either Tesla knew (but chose wilful blindness) or Tesla is incompetent. Which is it?

Tesla was just ok with Eisenmann exploiting global wage differences - they didn't necessarily know how low their employees' wages would actually be.

Read their statement in the article

> "Tesla enters into contractual agreements with its general contractors, which allow them to select the resources they need for the job while also requiring them to hire and _pay_ their workers appropriately."

Do you think they did a good job in enforcing their own stated requirement?

Any client who permits people to work in their premises providing them with badges and security passes does minimal background checks. Now tell me what minimal background check would not have found their Visa Status and hence Visa fraud on the basis of B1 Visa person doing hands on job?

Do you still think Tesla was ignorant or closed their eyes purposefully?

>Therefore, Eisenmann is responsible and Tesla should not be held accountable.

Why not? Otherwise, follow the logic: sub-contractor after sub-contractor until you reach the bottom and you've got some fly-by-night operation that you can't hold accountable.

Everyone involved shares the blame, including Tesla

>Why not?

Because its govt's job to enforce labor laws not Tesla's .

Maybe Tesla is responsible from a moral pov .

Because a customer shouldn't be held accountable for another company's actions. The government's job is to enforce labor laws and it should do just that. Then we don't have this gross attempt to just find the biggest bank account to blame.

Blame has to stop somewhere. By that logic, why stop at Tesla? Perhaps we should blame Tesla's individual investors? Or all the consumers who placed a deposit down for a Model 3? Or the City of Freemont? Or the Californian government? Or the US government?

Belgium, proud of it's social protection and security, has the same problem. Delhaize Belgium bought it's chickens from an industrial farm. That farm hired a company who brought in workers for help during the harvest. The workers were from Bulgaria, standard of living there's much lower than Slovenia. Member states of the European Union adhere to the free trade of goods and labor principle. Which meant in this case those Bulgarian workers fell under Bulgarian labor laws. It's really a complex matter because civil servants accused this company of illegaly employing staff to dodge taxes and cheat social security. The Labour Appellate Tribunal of Gent imposed severe fines which would have impoverished everyone related, also "normal" workers, to the industrial farm. The court of cassation ( highest instance court in Belgium ) judged that the court of Gent was wrong. So the process had to be redone. The Labour Appelate Tribunal of Antwerp judged that the defendants, Delhaize and that chicken farm, didn't breach the law so they were not guilty. Case closed.

Start rant

I' m wondering if Tesla's case will grab headlines in the European "left"press. If so that indicates that populism uses facts to give you the sentiment that you're a victim of capitalism instead of realising the complexity of postmodern times End rant

It's similar to the Apple-Foxconn situation. Foxconn was abusing its workers and not Apple, but people felt that Apple was at least partly to blame for the situation and had a responsibility to call for improvements.

Given the other stories this article brings up, it seems Eisenmann has a history of this kind of thing.

It is simple; Tesla should have a supervisor at the construction site that made sure everything was according to their specifications, be it construction or worker issues. It wouldn't be very difficult for the supervisor to tell that people who don't even speak English aren't legit workers.

As for the solution, place huge fines for all companies involved. That would give motive to Tesla to both inspect their construction and include protection clauses in their contracts.

> It wouldn't be very difficult for the supervisor to tell that people who don't even speak English aren't legit workers.

Have you worked in construction before? Non-English speaking employees (especially in California) aren't necessarily an indication that anything is amiss.

Supervision may have made a difference, but I'm not sure. The onus is on the contracted company to do things the right way.

I'm surprised that California building, OSHA , and employment inspectors didn't catch this. If they visited the site as I expect they would have multiple times through construction, and didn't find anything out of the ordinary, it tells you something about the inspections themselves and the degree that the required employment documents were misrepresented.

>What would be a good solution for this problem of H1-B workers being used for cheap labor which in term is stealing Americans jobs?

Review and proper enforcement of 'prevailing wage' requirements.

People in this article were not using H1B though.

>Tesla proudly employs nearly 6,000 American workers from the Bay Area

And for everything else we use subcontractors. Fucking disgusting.

good 'ole friend Plausible Deniability.

except, s/plausible/voluntary

> And for everything else we use subcontractors. Fucking disgusting.

That's a very strong sentiment, sprinkled with ignorance.

I work in hospitality industry and seen the underbelly of food production and construction of QSR locations. I speak from experience.

Sure, everyone wants contracted, union labor and hire Americans but no one is willing to pay for it.

Subcontracting is "Fucking Disgusting"? Okay, how would you like to pay 30% more for your food, clothing, and electronics? Doesn't sound so appealing? Well that's unfortunate.

This isn't a complex problem - the economics doesn't work; American labor isn't hired because American's don't want to pay more for products.

> Review and proper enforcement of 'prevailing wage' requirements.

That is so simple to write...our HR department has to check every employee against many different services to ensure that they're legally allowed to work and are not felons, while constantly hiring. They're over worked and do not have adequate resources. Hiring more folks for HR is out of the question because the business has to be profitable...because...that's how the world works.

However, if we raise prices, we could "Review and proper enforcement of 'prevailing wage' requirements" but then we would be out of business because no one would purchase our product since it would be too expensive.

Statements are easy to make, solutions are tough.

I was talking about govt enforcing prevailing wage requirements that are already in place for H1B. This is one of the many loopholes that shady employers take advantage of.

With all due respect, government isn't able to enforce it since they just don't have enough folks to the job. It will fall on the business, which will include hiring more folks.

It's a never ending carousel of responsibility and cost increase (taxes or COGS - cost of goods sold).

>With all due respect, government isn't able to enforce it since they just don't have enough folks to the job.

H1B visa fees generates over a billion dollars. After spending in on various generic projects like biometric scanning , 911 responder the rest goes into treasury .

If the govt doesn't want to spend the money on enforcement then what can anyone do.