Tesla fires hundreds on Model 3 stall


The maker of the Model S this week dismissed between 400 and 700 employees, including engineers, managers and factory workers, the San Jose Mercury News reported on October 13, citing unidentified current and former workers. Tesla says it plans on filling a "vast majority" of the vacancies with new hires. Elon Musk prefers to work long hours as he serves as CEO of Tesla and SpaceX simultaneously. The company expects to deliver about 100,000 vehicles this year.

The terminations come as Tesla is trying to ramp up production on its Model 3 sedan, which has a customer backlog of 450,000 cars, according to CBS News. The manufacturing will become highly automated, but Musk told investors during the early ramp up he expected high overtime costs. It had hoped to be producing 1,500 a month by September and is well behind that target.

The launch of InsureMyTesla in the U.S. comes after CEO Elon Musk took issue with reports earlier this year that insurer AAA was raising rates to insure Tesla vehicles in some markets, citing high claim frequencies and costs. The state generally requires companies to report layoffs of more than 50 employees in a 30-day period. Unlike Ford, Tesla still hasn't posted an annual profit yet. Yet, in a report from the Wall Street Journal, it is said that some Model 3 parts are being made by hand by workers at the Fremont facility, thanks to an assembly line that is not yet fully operational. Tesla has a hearing before the National Labor Relations Board in November for charges that company supervisors and security guards harassed workers distributing union literature.

Openly pro-union workers were among those fired this week.

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The company denied union activities played a role in the dismissals.

Quoted by the Mercury News, Michael Harley, managing editor at Kelley Blue Book and Autotrader, thought the dismissals could be an effort to improve vehicle production.

The company noted that there are "no fundamental issues with the Model 3 production or supply chain" and said that company officials understand "what needs to be fixed".