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Tesla Cuts Executive Pay & Furloughs Workers — But Progress On Gigafactory Berlin Accelerates

Tesla says it will cut executive pay and furlough hourly workers while its factories are shut due to the coronavirus. Meanwhile, work is going forward on the new Gigafactory in Germany.

The coronavirus is slamming the auto industry hard. Almost all auto manufacturing in Europe and North America is shut down as infection peaks sweep across the globe. Tesla is not immune, unfortunately. It has shuttered its factories in Fremont and Buffalo while reducing production at Gigafactory 1 in Nevada.

Tesla Fremont Factory

In a company-wide email on April 8 seen by CNBC, Valerie Capers Workman of Tesla’s North America human resources office reportedly wrote:

Hi Everyone,

Thank you for your continued commitment to Tesla and our mission during this unprecedented time. We know that the uncertainty has not been easy, and we are doing everything we can to keep you safe and informed while also navigating the changes around the world.

While we are continuing to keep only minimum critical operations running, we expect to resume normal production at our U.S. facilities on May 4, barring any significant changes. Until that time, it is important we take action to ensure we remain on track to achieve our long-term plans.

Starting Monday, April 13, we are implementing the below actions as part of a broader effort to manage costs. This is a shared sacrifice across the company that will allow us to progress during these challenging times.

Pay will be temporarily reduced for salaried employees. For U.S. employees, these reductions are 30% for Vice Presidents and above, 20% for Directors and above, and 10% for everyone else. For non-U.S. employees, there will also be comparable reductions, of which the specifics will be communicated by the local leadership team in accordance with local laws and works-councils. These reductions are expected to be in place until the end of Q2.

Employees who cannot work at home and have not been assigned to critical work onsite will be furloughed. Under furlough, you remain an employee of Tesla (without pay) and retain your healthcare benefits. You will not report to work until the furlough ends and you are directed to return by management, which we expect to be May 4.

A furlough notice will be emailed to you in the coming days with additional instructions on how to apply for unemployment benefits through your state agency. For the vast majority of furloughed employees, unemployment benefits will be roughly equivalent to normal take home pay. Certain employees will be assigned to critical functions and they will continue to report onsite. Those employees will be communicated to directly by their manager or HR partner.

For the merit review cycle:

Salary and hourly rate adjustments will be put on hold.
Equity grants will be on hold as well.
If you would like to take a voluntary leave of absence, as some have reached out to request, please discuss with your manager and HR partner.

We continue to monitor the situation closely, and our top priority is to ensure the safety of our employees. As usual, for those who are onsite, if you are sick or are uncomfortable coming to work, please contact your manager and stay at home. We respect your decision and you will not be penalized. For HR-related questions, contact your HR partner or email [address redacted]

Thank you all so very much for everything you do to ensure the success of our company.

German Factory Moves Forward

The takeaway from that email is that Tesla plans to restart its manufacturing operations on May 2. But the production delay is not slowing down construction of the company’s first European factory in the German state of Brandenburg near Berlin. Twitter user Emil Senkel has visited the site and says the land has now been leveled after all the trees were removed.

According to German news source Bild, Tesla has filed an application to begin work on the factory itself ahead of schedule as it seeks to make up for lost time due to a local protest that centered on the tree clearing process in February and the effects of the coronavirus.

“The application has been received,” Frauke Zelt, a spokesperson for the environment ministry, said on Monday. According to Teslarati, moving the process along ahead of schedule has some possible drawbacks. If any environmental protests are successful at this point, Tesla could be required to return the land to its original state.

But the odds of that happening are quite low at this point. The factory is expected to provide up to 12,000 new jobs in the area, so local officials are very much in favor of seeing it completed. If all goes as planned, it will be turning out Tesla Model Y SUVs in a little over a year from now.

Photo © Kyle Field, CleanTechnica

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