Business

Tesla Gives German Workers A Raise After Firing Hundreds Of US Employees

Tesla and labor leaders at the automaker’s German facility agreed Wednesday to increase worker pay by 30 percent after the company fired hundreds of U.S. employees for poor performance.

The electric vehicle maker moved to increase pay raises at the facility to guarantee staff a “fair and competitive” salary. Tesla has come under fire for terminating nearly 700 manufacturing and sales positions elsewhere, as the company is struggling to produce the highly-touted Model 3.

“We will now get to a competitive wage level,” a spokesman for the German facility’s work council said in a statement after a meeting with Tesla Grohmann Automation, which employs about 650 workers. Many workers at the company’s California plant complain about being overworked and underpaid.

The new pay structure will include pay raises for apprentices, Tesla confirmed in a statement, without mentioning the percentage of the increase. The company promised in April a five year job guarantee for all Grohmann workers.

Tesla ousted the facility’s former executive, Klaus Grohmann, in March for not devoting his automation firm’s resources toward developing Tesla products.

The Silicon Valley electric automaker is counting on Grohmann Engineering to help ratchet up production on 500,000 vehicles by 2018. Tesla CEO Elon Musk demanded that the firm focus on Tesla projects instead of Grohmann’s other clients, such as Tesla’s chief rivals Daimler and BMW, sources told Reuters in April.

Tesla’s Model 3 is reportedly going through “production hell.” The automaker managed to build only 260 of the everyman vehicle between July and September, a number well below the 1,500 Tesla promised before the end of the fourth quarter. Total orders for the car tumbled to 455,000 from a high of 518,000.

Production on the highly touted vehicle was expected to expand from 100 cars in August to 1,500 in September, and plateau to 20,000 per month in December. CEO Elon Musk promised to eventually produce 20,000 cars per month. But the pay raises in Germany and the reduction in staff in other areas could be a sore spot for employees that argue Tesla is hobbling its workers.

One employee with the company wrote an editorial in February that claimed his colleagues at Tesla’s primary California facility were often faced with “excessive mandatory overtime” and earned paltry wages compared to the national average of $25.58 hourly for most autoworkers in the U.S. Tesla offers a $21 hourly wage.

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