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Musk urges 'barnacle' purge of Tesla contractors at struggling factory

Musk urges 'barnacle' purge of Tesla contractors at struggling factory
Inside Tesla's Fremont, Calif., auto assembly plant (Russ Mitchell / Los Angeles Times)

Tesla was set to begin scraping "barnacles" on Monday.

Barnacle is Tesla Chief Executive Elon Musk's word for temporary workers whose job performance is not up to snuff. Scraping and scrubbing are his words for firing them, a purge the billionaire apparently believes is crucial to getting his Model 3 sedan production back on track at its Fremont factory.

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In an email sent to managers late last week, Musk told them to send a note to human resources by Monday "justifying the excellence, necessity, and trustworthiness" of temporary employees. "Anyone who does not have a Tesla employee putting their reputation on the line for them will be denied access to our facilities and networks on Monday morning."

The dictate apparently covers white collar employees as well as factory workers. "This applies worldwide," he said. Musk's email was forwarded or sent directly to Elektrek, a website focused on electric vehicles.

Musk also talked about unproductive contract workers on an earnings call with analysts last Wednesday. "We've got barnacles on barnacles," he said. "So there's going to be a lot of barnacle removal."

At midday Monday, it looked like business as usual at Tesla's auto assembly plant in Fremont, Calif. — except that the usually packed parking lot had more parking spaces available than usual.

Tesla employs a large number of temporary workers at its auto, solar energy and battery storage factories, although the approximate number, or the proportion of total workers, remains a company secret. The company employed about 37,500 total workers at the end of 2017. The United Auto Workers is attempting to organize workers at the Fremont plant, which employs about 10,000.

Tesla tends to hire line workers through several different staffing agencies. At some point, ranging from weeks to years, it will hire those it prefers as full-time employees and let contracts expire on the others.

While nearly all large companies use temporary workers, making them the entry point for factory jobs is unheard of at major automakers, said an executive at a global auto industry consulting company. (He asked that his name not be used to avoid creating conflict with his clients.)

In his email, Musk indicated that beyond individual temp workers, staffing agencies also are up for review.

Three agencies that work with Tesla were asked by The Times for their response to the "barnacles" accusation. None were willing to do that or discuss their strategy for communicating with their workers about Musk's directive.

A representative for Aerotek said "I'm not able to comment on that story."

A representative from West Valley Staffing Group did not return a telephone call.

A representative from Balance Staffing responded "Did you say the Los Angeles Times? The newspaper? No thanks, not interested" and immediately hung up the phone.

Tesla's media relations department was asked to comment, but did not respond.

Musk is under more pressure than ever to fix production problems on what the company has called its "mass market" Model 3 compact electric sedan. The car currently sells for a base price of $50,000. The company promises a cheaper version is in the works.

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The success of the Model 3 could determine the success or failure of Tesla itself. Musk had led investors to believe that Model 3 production would hit an annual rate of about 400,000 by the end of 2017. At this point, the company said, the car is being turned out at a rate of about 104,000 a year, although Musk has told investors he's aiming for a far higher figure as production problems are solved.

Musk, who once said that one effect of automating the Fremont plant would be fewer parking headaches there, recently acknowledged he was over-aggressive with spending on automation.

While Musk is ridding Tesla of what it deems to be its under-performing temporary workers, he said it will be hiring 400 workers a week at its factories for several weeks.

Online job sites are flooded with open Tesla positions, including a job category called "Car Enthusiast" for "work in the diagnosis, repair, and service of Tesla electric vehicles just manufactured in our Fremont factory." The position requires the successful candidate to "operate a variety of hand, power, and shop tools."

Twitter: @russ1mitchell

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