Tesla Labor Battle Over “Fair and Responsible Workplace” Could Affect Taxpayer Rebates

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In California, if you want to take advantage of thousands of dollars of rebates when you purchase an electric vehicle, your automaker must adhere to the state’s labor practices. A Tesla labor battle is now underway with two California agencies, as they want the all-electric automaker’s Fremont factory to be certified as a “fair and responsible workplace.” That designation is part of language that allows customers to be eligible for taxpayer-backed state electric vehicle rebates. Tesla isn’t happy and has filed a 16-page response fighting the rule.

Tesla labor battle

California Governor Jerry Brown has called for the state to build to at least 5 million zero-emission vehicles on state roads by 2030. Rebates are built-in incentives to meet that goal.

The Clean Vehicle Rebate Project (CVRP), which comes from the California Air Resources Board (CARB), is designed to promote the purchase of battery electric, plug-in hybrid electric, and fuel cell electric vehicles. Rebates of up to $7,000 per light-duty vehicle are available for individuals, nonprofits, government entities, and business owners who purchase or lease an eligible vehicle.

Tesla Labor Battle over CARB and Labor and Workforce Development Agency

The Budget Act of 2017, as amended by Assembly Bill (AB) 134 (Committee on Budget, Chapter 254, Statutes of 2017), appropriated funds to CARB for CVRP and directed CARB and the Labor and Workforce Development Agency (LWDA) to develop procedures to certify vehicle manufacturers as fair and responsible in their treatment of workers:

“The State Air Resources Board shall work with the Labor and Workforce Development Agency to develop procedures for certifying manufacturers of vehicles included in the Clean Vehicle Rebate Project as being fair and responsible in the treatment of their workers. It is the intent of the Legislature that beginning in 2018-19 fiscal year, the Labor Secretary shall first certify manufacturers as fair and responsible in the treatment of their workers before their vehicles are included in any rebate program funded with state funds.”

California lawmakers called for the confluence of CVRP and LWDA in a provision they placed in the state budget a year ago, a move that was perceived as giving United Auto Workers and the California Labor Federation a lift in their efforts to unionize Tesla’s plant in Fremont.

Tesla labor battle

Tesla’s Stand on Unionizing in Opposition to the Labor Federation

Tesla, which is the only large-scale car manufacturer in California, insists that doing business in California is already rife with obstacles, and Tesla’s labor battle against organizations that want to unionize its Fremont plant complicates an already difficult production climate. It argues that the “state is targeting” the automaker and that other car manufacturers avoid operating in California because they view it “as a competitive disadvantage.”

“The goals of a clean environment and a thriving middle class are inseparable for the labor movement and we are committed to achieving both,” Angie Wei, a lobbyist for the Labor Federation, said in a letter supporting the rule. The rule could take effect as early as next month, opening Tesla to additional scrutiny from the LWDA and CARB.

The state also released a concept paper on May 23, 2018, that describes broadly how the agencies might enforce the rule. Automakers would attest that their plants manufacture CVRP-eligible vehicles, they comply with applicable labor laws and labor-related commitment, they submit all documentation about their labor-related practices, and they cooperate in regards to their application.

“The conceptual procedures discussed here would establish a two-phase certification process for manufacturers of CVRP-eligible vehicles (CVRP manufacturers). LWDA’s procedures would specify the certification process; CARB’s procedures would adjust CVRP’s implementation to respond to LWDA certification decisions.”

The rule would give companies 2 years to more or less self-certify as “fair and responsible workplaces” before bringing in more oversight. It asks that companies report on workplace injuries, labor complaints, and non-discrimination standards.

Tesla labor battle

Constituent Comments, Revisions Ahead

The state labor agency and CARB have had discussions with car companies, unions, and environmental groups. They plan to revise the document based on comments on the concept paper. Wei said unions intend to ask the legislature to put the certification process into law after the agencies review feedback and release a revised plan.

The United Auto Workers (UAW) wants to represent Tesla’s workforce, just as it did for employees of New United Motor Manufacturing, Inc. — a joint venture by Toyota and General Motors that closed in 2010. Tesla’s main manufacturing facility is in the former NUMMI plant. Tesla has claimed that the UAW has been engaged in a handful of underhanded, disingenuous efforts to smear the company and push for unionization. Furthermore, Tesla CEO Elon Musk has highlighted the fact that Tesla couldn’t stop unionization if employees wanted it, that they don’t want it, and that it wouldn’t be good for them.

Tesla declined to comment to CleanTechnica beyond its letter to the air board.

“I’ve never stopped a union vote nor removed a union,” Musk tweeted on May 23, 2018. “UAW abandoned this factory. Tesla arrived & gave people back their jobs. They haven’t forgotten UAW betrayed them. That’s why UAW can’t even get people to attend a free BBQ, let alone enough [signatures] for a vote.”

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Carolyn Fortuna

Carolyn Fortuna, PhD, is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavey Foundation. Carolyn is a small-time investor in Tesla and an owner of a 2022 Tesla Model Y as well as a 2017 Chevy Bolt. Please follow Carolyn on Substack: https://carolynfortuna.substack.com/.

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