Elon Musk vows to look into reports of ‘unfair’ bonus cuts at Tesla’s Shanghai factory

By Laura He, CNN

Tesla CEO Elon Musk has promised to look into reports that workers at the company’s factory in Shanghai have been subjected to “unfair” reductions in their performance-related pay.

Social media posts published over the weekend by people who say they work at the factory — the company’s main export hub — expressed anger over recently announced cuts in their monthly bonus pay. They said they were given news of the “significant” and “malicious” cuts after a fatal accident occurred at the Tesla facility in February.

According to the posts, factory managers apparently cited the need to pay compensation related to the accident as the reason for reducing workers’ bonuses.

“This is incredibly unfair,” said a person with the user name of “Er Gou” in a post on popular Chinese platform Zhihu. “This safety incident happened in the factory. It is not because of workers’ personal [shortcomings].”

“Workers should not be penalized with pay deductions because of the company’s liability problems,” according to the social media user, who claims to be a regular factory worker.

The person said the cuts amounted to more than 2,000 yuan ($291) a month, which they characterized as a “huge amount” to many.

The amount is equivalent to just under half of the monthly base salary -— about 5,340 yuan or $777 — at the Shanghai facility for junior workers, according to Reuters. On the top of the base salary, workers could be eligible for over time pay and regular bonuses linked to performance.

Last May, Musk touted the work ethic of Chinese employees, praising them for burning “the 3 a.m. oil” in an interview with the Financial Times. At the time, Shanghai was in the midst of a two-month Covid lockdown.

Just six months later, in November, the Shanghai factory set a fresh monthly delivery record of more than 100,000 vehicles. All this was achieved after Covid restrictions caused the plant to temporarily suspend production.

Asking Musk to investigate

Some upset employees appear to have even bypassed mainland China’s strict internet controls to post on Twitter, urging Musk to intervene.

“Please pay attention to the performance of frontline workers at Tesla’s Shanghai factory being arbitrarily deducted,” said a Twitter user with the handle “AFeiywu” in a post from an IP address located in Shanghai. Musk and Tesla Asia were both tagged.

Musk responded on Tuesday morning Hong Kong time.

“Was alerted this weekend. Looking into it,” he commented on Twitter.

Twitter is blocked in mainland China. But many people circumvent restrictions to use it.

CNN has reached out to Tesla and the authors of the posts for comments, but didn’t immediately get any response.

According to a statement published by the Pudong district government in Shanghai last week, a “mechanical accident” occurred at a welding workshop at Tesla’s factory in February, killing one person. An investigation published by the government blamed the deceased worker, his coworker and the company for the accident.

The Shanghai Gigafactory, which began operating in 2019, is the company’s biggest car manufacturing plant outside the United States, employing about 20,000 people.

In 2022, Tesla delivered 1.31 million vehicles globally, more than half of which were from Shanghai, according to the company’s financial results. That figure was up 40% from 2021.

Earlier this month, Tesla announced it would build a large battery plant near its first facility, doubling down its investment in China.

Tesla is slated to report its first-quarter results on Wednesday.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.