A Tesla sign in Taipei, Taiwan, on Aug. 11, 2017.TYRONE SIU/Reuters
Tesla’s Shanghai factory workers took to social media to appeal to Elon Musk and the Chinese public after being told at the weekend about cuts to their performance bonuses, according to online posts and employees who spoke to Reuters.
Several posts said they believed the deductions were linked to a fatal accident earlier this year at the plant, its biggest worldwide, and criticized Tesla TSLA-Q for the cuts.
The situation marks a rare outburst of discontent at Tesla’s Shanghai plant, whose workers Musk praised last year for burning “the 3 a.m. oil” to keep operations running during the city’s two-month COVID lockdown.
Musk said in a tweet that he was alerted about the issue over the weekend and was looking into the matter.
It comes as Tesla has been slashing prices in multiple markets, including China where demand has been weakening, which has raised concerns about its industry-leading profit margin.
The posts began appearing on forums such as Baidu Tieba late last week. Some took to Twitter, owned by Musk and blocked in China, to tweet to the billionaire, his mother Maye Musk, and Tesla.
“Please pay attention to the performance (bonus) of front line workers at Tesla’s Shanghai factory being arbitrarily deducted,” said a person with the handle @AFeiywu on Twitter in a tweet directed at Elon Musk and Tesla’s Asia unit.
Two workers at the plant, where Tesla employs around 20,000, told Reuters they were informed by their supervisors over the weekend about a cut to their quarterly bonus payout, which is linked to the factory’s performance.
The workers said Tesla supervisors mentioned a “safety incident” when they were asked about reasons for the bonus cut. They declined to be named out of concern for their jobs.
Several online posts claimed workers at the Shanghai plant were being unfairly penalized for an incident this year at the factory in February where one worker died.
According to a report published by the local Pudong government on April 12, there was a mechanical accident in the welding workshop at Tesla’s Shanghai plant on Feb. 4 that killed one worker.
The local government’s investigation concluded an oversight in Tesla’s safety management indirectly contributed to the accident and said the deceased worker was directly responsible.
His mother, Maye Musk is a model who has attracted a following in China. She recently completed a two-week tour in the country during which she visited the Shanghai factory and promoted her memoir.
Tesla did not immediately respond to request for comment.
Some workers said in online posts their quarterly bonuses had been cut by around 2,000 yuan ($291.19).
Base salaries at the Shanghai plant start from around 5,340 yuan per month, with additional income in some cases coming from over-time work, shifts and annual and quarterly bonuses.
Before tax, workers can earn around 110,000-120,000 yuan a year, including bonuses and overtime pay, according to a recruitment post on state-owned Lingang Group’s official Wechat account, which provides hiring services for companies in the region. That level of pay is in line with other international and Chinese manufacturers in the region.
Aidan Chau, a researcher at Hong Kong-based China Labour Bulletin, said it wasn’t uncommon for companies to penalize employees after a work accident but that it usually came out of a safety bonus.
“Deducting the performance bonus, which should be related to workers’ output and has nothing to do with work safety, is even more unfair,” said Chau.
Tesla is set to report first-quarter results on Wednesday. A key focus for investors and analysts will be how its round of price reductions on its electric vehicles have cut into its margins.
On Friday, it slashed electric vehicle prices in Europe, Israel and Singapore, expanding the discount drive it began in China in January.
Tesla Chief Financial Officer Zach Kirkhorn said last quarter that the company expected to sustain a gross margin of 20 per cent on autos, excluding leases and regulatory credits, with an average-sale price for its EVs globally above $47,000.