Were CNBC Sources — “Tesla Employees” — Funded By TSLAQ?

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CNBC recently published an article claiming that Tesla workers said they took shortcuts while working in harsh conditions in order to meet Model 3 production goals. CNBC references two named sources and several unnamed sources. The two named sources are husband and wife, Carlos and Maggie Aranda. Tesla has responded thoroughly to the claims, yet we have not seen most of those responses published by CNBC or elsewhere.

The article painted a bleak picture, which prompted a little bit of digging by several Tesla supporters on Twitter. The screenshots I have taken below show a series of tweets that slowly uncover some interesting notes regarding the main named source that CNBC used. This source, Carlos Aranda, claims in a tweet posted on April 7, 2019, that he received a generous donation from “$TSLAQ.” According to the CNBC article, Aranda did not resign from Tesla until June 24.

The $TSLAQ Twitter tag is a stock market reference to a hypothetically bankrupted Tesla. Tesla [TSLA] short sellers generally use it when criticizing Tesla or discussing pessimistic/bearish forecasts for the company. It was surprising to us to see that someone employed at Tesla received funding from “the $TSLAQ community” and then was used as the main named source of a CNBC article.

There’s more, though. In another screenshot, there is a Twitter exchange between Carlos Aranda and Lora Kolodny, the author of the CNBC article in question. Carlos says he is grateful for the “TSLAQ family” and also thanked Lora for introducing him to them. He also mentioned a GoFundMe campaign. Lora seemed confused and in the tweet exchange claimed Carlos must have had her confused with someone else, but that her door was open.

Tesla’s Response

In a broad statement about the article from a Tesla spokesperson, Tesla has responded in this way:

“The anecdotes reported by CNBC from a few unnamed sources are misleading and do not reflect our manufacturing practices or what it’s like to work at Tesla.

“As we’ve said before, our goal is to produce a perfect car for every customer. In order to ensure the highest quality, we review every vehicle for even the smallest refinement before it leaves the factory. Dedicated inspection teams track every car throughout every shop in the assembly line, and every vehicle is then subjected to an additional quality control process towards the end of line. And all of this happens before a vehicle leaves the factory and is delivered to a customer. This applies to all areas of the factory, including our operations at GA4, and it’s why Tesla is able to build the safest and best-performing cars available today.

“We work hard to create a work environment that is as safe, fair and fun as possible, and it is incredibly important to us that employees look forward to coming to work every day. In fact, we have a large number of employees who request to work on GA4 based on what they hear from colleagues and what they have seen first-hand.”

However, far beyond that statement (which was included in the CNBC article after it was published), Tesla had essentially line-by-line responses to the various claims in the article.

Tesla’s Responses to the CNBC Claims

In addition to the above, the following is a detailed response by a Tesla spokesperson to many of the claims of CNBC’s article. Summaries of CNBC’s claims are highlighted in italics and Tesla’s responses are in quotations and indented.

Several current and former employees told CNBC about how vehicle assembly is done in GA4. Among other things, they described pressure to take shortcuts building the new cars, and exposure to the elements and pests there – which can make the work of Model 3 assembly there more physically challenging than on other lines.

“This is not true, nor is it our practice to encourage shortcuts in production. If it were, Tesla would not have been voted the most satisfying car on the road nor would we have outsold some of the most popular cars in the U.S. like the Toyota Camry and Honda Accord. In addition, quality is also reaching record highs, with the best first pass yield ever out of Fremont.”

In response to the CNBC claims that work in GA4 is done with conveyors, lifts, power and manual tools but none of the sophisticated robotics used in the indoor Model 3 lines, Tesla’s spokesperson replied:

“Tesla has previously discussed how GA4 was designed and operates, and this has been reported on in the past:

“From our Q2 earnings call:

• Deepak: ‘We just wanted to create an assembly line that would be very easy and very straightforward. So it’s a straight line. Very simple. Car enters at one point and it’s finished at the other end. Very simple access on all sides, very simple tooling that we reused for most of — actually, nearly all of it is systems and tools that we discarded from previous S and X all for Model 3.’
• Elon: ‘Especially Model 3. Like it was probably like we got 2 weeks to solve this problem, which is like quite the impossible. So we actually didn’t have time to order new equipment because it would have taken too long to arrive. So we took the conveyors that we discarded from the GA 3 line, which didn’t work. Or it was way too complex to actually move our products.’
• Deepak: ‘And we simplified, repurposed them, make them sturdy for what was needed. … And the quality of the cars that come out of this structure is at least as good as — and we make all the performance cars on this particular line and they seem to be doing quite well. So this is a very pleasant surprise. And the associates seems to be very happy and engaged in that particular area. So this may be a model of how we may want to start general assembly for future vehicles, at least start. And we can always add further automation and complexity.’
• Elon: ‘And the stress of sort of 24/7 robotics, technicians that are constantly trying to make the machines have uptime, that’s very expensive. And so when we think about not having some to maintain all these robotic systems, that’s a big cost savings as well. And now we’re going to gradually be adding simple automation into GA 4 to make it easier to build a car and that are sort of labor saving devices. It’s fundamental. It’s already at an efficiency level greater than GA 3, which is pretty impressive.’

“From our Q2 2018 deliveries release:

• ‘Our Model 3 weekly production rate also more than doubled during the quarter, and we did so without compromising quality. GA4, our new General Assembly line for Model 3, was responsible for roughly 20% of Model 3s produced last week, with quality from that line being as good as our regular GA3 line. We expect that GA3 alone can reach a production rate of 5,000 Model 3s per week soon, but GA4 helped to get us there faster and will also help to exceed that rate.'”

When it’s too cold out, some plastic parts can break at a higher rate in GA4 than they would indoors during Model 3 assembly.

“This is not true and there is no evidence that parts are breaking at GA4 due to cold temperatures.”

Some workers were taught to make quick fixes to Model 3s using electrical tape in GA4.

“This is not a practice that we follow or what we instruct our employees to do. I would also refer you back to our statement, which talks about how dedicated inspection teams track every car throughout every shop in the assembly line and every vehicle is then subjected to an additional quality control process towards the end of line.

“Many of the cables and white brackets we use in Model 3 come with electrical tape already on them from our supplier. So the suggestion that the use of electrical tape in our cars is somehow improper is a mischaracterization, given that some parts of the car intentionally come this way. Tesla provided CNBC with photos from GA4 of cables and brackets from our supplier, which are designed with tape and are the same brackets referenced in their story.

“We have not been able to find any evidence of electrical tape being used to make repairs in GA4, and this is not something we practice or condone.

“Finally, when a customer receives their vehicle – regardless of what production line is used – there is literally no difference in the quality of the vehicle that they receive. GA4 is treated the same way in terms of quality and production as any other production line at Fremont. Every car we build goes through rigorous quality checks and must meet exacting specifications, and no car leaves the factory unless that is the case.”

Workers said Tesla stopped requiring water tests on Model 3s late last year. A GA4 worker can request a water test, but many hesitate to do so out of concern they’ll slow down production. (Water tests can take around 10 minutes.)

“Water tests are done on a sampling basis, and they continue to occur at GA4. We are not aware of any instance where someone has been told a water test should not be done because it may slow production. In fact, we encourage all our employees to identify opportunities for improvement and engage the appropriate teams to evaluate potential risks and identify possible solutions.”

Workers have taken cars out of factory mode, which limits speed to 10 mph currently, to zip them from GA4 over to far-away points at the Fremont factory. It’s a fire-able offense to do this. But some do it to save time, anyway. Keeping to that slow driving speed is especially important at night, in part, because there aren’t a lot of street lights around the Fremont plant, including where workers may walk from GA4 to the break room.

“Again, this is not a practice we instruct employees to follow, and an employee would be appropriately disciplined if found breaking safety protocols. When issues are identified, we will obviously take the appropriate steps to address them.”

Very cold, and very hot temperatures are just a reality in GA4. Tesla put in big fans to help circulate air, but workers said those aren’t very effective and they aren’t always turned on.

“Tesla’s Environmental Health & Safety team regularly monitors temperatures in Fremont, including at GA4, to ensure we are maintaining a temperature well-within a comfortable working environment for the safety of employees and our production equipment and parts. We monitor the temperature, airflow and humidity at the hottest time of the day, and we provide temperature controls such as cool fans, hydration, rest breaks, and heat stress awareness training”

Rain can seep into the tents. Workers shared photos of this with CNBC.

“As mentioned above, our Environmental Health & Safety team regularly monitors the working environment at the factory to ensure it is safe and comfortable, and we have and will continue to take all appropriate measures to ensure that is the case. We have established a number of water mitigation activities to reduce and prevent this as much as possible, including sand bags, civil modifications, and other improvements to prevent this.”

Facilities gave some workers in tents space heaters. But they couldn’t keep using them because of precipitation.

“As a policy, our facility team does not issue space heaters as they can be a fire hazard and therefore are not permissible. If found in use, our facility team would request it is no longer used and remove it from the site.”

Workers built Model 3s even during the smoky days after the Camp Fire in November 2018. It took days to get air filter masks and distribute them to GA4 workers.

“It’s wrong to say it took ‘days to get air filter masks’. Based on a review of internal documentation, which we have tracked and verified, we immediately offered air filter masks to those who wanted them at a number of Tesla sites. Our safety team monitored the air quality nearly every hour, held regular check-ins with employees on-site, and provided face masks every day as a precautionary measure. In fact, we established proactive site monitoring and utilized real-time devices that enabled us to evaluate the air quality at our California locations.”

Tesla used to give GA4 workers big red coats, but eliminated those as a cost-cutting measure.

“It’s inaccurate to say this practice has been ‘eliminated as a cost-cutting measure.’ We recently we gave out blue coats, and that while it’s the summertime and coats aren’t necessary, they are still allocated to hires.”

GA4 workers sometimes have to deal with pests including mice and bugs. Some have gotten flea bites at work. There’s a no food and only water rule in GA4.

“This is misleading to report. We are not aware of any significant issue involving pests at GA4 or anywhere at Fremont, nor have we received a number of complaints about it from employees. After reviewing clinic documentation from the last 12 months, there has not been a single employee visit to the clinic involving flea bites at GA4.

“No food is permitted at any production line at Fremont, and this is a standard operating practice whether at GA4 or any other manufacturing area in the factory. Water, along with other non-alcoholic beverages, are obviously permitted.

“We have onsite cleaning crews and facility management teams that manage and maintain the cleanliness of all of our facilities, including GA4. They are able to immediately respond to and address any concerns raised as needed.”

One couple – Maggie Aranda and Carlos Aranda – both experienced injuries working in GA4. Carlos was on medical leave for months before he resigned in June 2019. Maggie was fired within a month of being injured in May 2019. She says she was fired for using her phone during a shift to book health appointments.

“These claims have been previously reported and refuted on the record by Tesla. Here’s the response we provided previously to The Guardian:

‘Carlos was terminated following a post he made on Twitter that went against our Workplace Violence Policy, which is in place to protect the safety of our workplace and employees. Posts like this are taken extremely seriously and Tesla is very consistent in not tolerating any possible threat to our company or employees.

‘Maggie consistently took personal phone calls from the factory floor or left her workstation during shift without notifying her Supervisor, which is a significant safety risk and goes against our Environmental Health & Safety policies which are in place to keep employees and their colleagues safe every day. Despite several conversations with her Supervisor and HR about the importance of following these policies and notifying her Supervisor before leaving or needing to take a call, her behavior continued and she was terminated as a result.'”

Current and former Tesla employees said pressure to hit numbers, and to complete a process in just a few minutes in GA4, led them to sometimes skip installation of certain lugs, nuts or bolts in haste. Even if they “missed shots,” they’d move their cars down the line because they didn’t want to be a bottleneck to production.

“Like we said before this is not true, nor would we ever condone or encourage shortcuts in production. Tesla has a robust quality assurance team that reviews each vehicle at the end of the GA4 assembly line to ensure every car was built correctly and is perfect before it leaves our factory to go to customers. CNBC failed to provide sufficient evidence to support this claim and chose to publish these allegations based on a few unnamed sources.”

Some Reflections from the Editor

So, not only did Tesla respond with a couple of blanket denials, but as you can see, it had abundant and thorough responses denying the claims of essentially one known source — a married couple. We have no idea who any other sources were.

It seems that without a doubt Tesla tried to correct incorrect or misleading claims before the CNBC article was published. You can check out the article yourself to see if there’s any sign of that in the original piece.

Furthermore, the fact that the core source thought he got connected to $TSLAQ through the reporter is odd. The fact the he was, according to his own claims on Twitter and reporting by CNBC, funded by $TSLAQ while he was still employed at Tesla is also odd — or seems odd to us at least.

Did CNBC do a thorough analysis of the situation, as one would expect of one of the largest business media agencies in the world? Or did it take some claims sent its way via people funded in part by Tesla short sellers and then mostly run with those claims without noting the disagreements and specific details Tesla had on the topic? Did the reporter really connect the source for the article with $TSLAQ people on Twitter? Or did he misremember? We don’t know, but the whole story is hazy and it’s hard to not come to the conclusion it’s lacking important information to the extent that it’s immensely misleading. But what do we know?