Angry Tesla workers in Shanghai speak out to Elon Musk over bonus cuts

  • Posts about bonus cuts appear on Chinese social media, Twitter
  • Two workers say they were told cuts are linked to ‘security incident̵[ads1]7;
  • Fatal accident occurred at the Tesla factory in Shanghai in February – the government

SHANGHAI, April 17 (Reuters) – Tesla’s ( TSLA.O ) factory workers in Shanghai 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 of the posts said they believed the deductions were linked to a fatal accident earlier this year at the plant, the largest in the world, and criticized Tesla for the cuts.

The situation marks a rare outbreak of discontent at Tesla’s Shanghai factory, 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.

It comes as Tesla has cut prices in several markets, including China where demand has weakened, raising 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 at the billionaire, his mother Maye Musk and Tesla.

“Please note that the performance (bonus) of frontline workers at Tesla’s Shanghai factory is being deducted arbitrarily,” 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 factory, where Tesla employs about 20,000, told Reuters they were informed by their superiors over the weekend of a cut in their quarterly bonus payments, which are tied to the factory’s performance.

The workers said Tesla supervisors cited a “safety incident” when asked about the reasons for the bonus cut. They declined to be named out of concern for their jobs.

Several online posts claimed that workers at the Shanghai factory were unfairly punished for an incident this year at the factory in February in which one worker died.

According to a report published by the Pudong local government on April 12, a mechanical accident occurred in the welding workshop at Tesla’s Shanghai factory on February 4, killing a worker.

The local authority’s investigation concluded that an oversight in Tesla’s safety management indirectly contributed to the accident and said the deceased worker was directly responsible.

Tesla and Elon Musk did not immediately respond to requests for comment.

His mother, Maye Musk, is a model who has attracted a following in China. She recently completed a two-week tour of the country where she visited the Shanghai factory and promoted her memoir.


Some workers said in online posts that their quarterly bonuses were cut by about 2,000 yuan ($291.19).

Base wages at the Shanghai factory start at around 5,340 yuan per month, with additional income in some cases from overtime, shifts and annual and quarterly bonuses.

Before taxes, workers can earn about 110,000-120,000 yuan a year, including bonuses and overtime pay, according to a recruitment post on the official Wechat account of state-owned Lingang Group, which provides employment services for companies in the region. That wage level is in line with other international and Chinese producers in the region.

Aidan Chau, a researcher at the Hong Kong-based China Labor Bulletin, said it was not unusual for companies to punish employees after a workplace accident, but it usually came out of a safety bonus.

“Deducting the performance bonus, which is supposed to be related to the workers’ output and has nothing to do with job security, is even more unfair,” Chau said.

Tesla will report results for the first quarter on Wednesday. A central focus for investors and analysts will be how the round of price reductions on electric vehicles has cut into margins.

On Friday, it cut the prices of electric cars in Europe, Israel and Singapore, extending the discount it started in China in January.

Tesla CFO Zach Kirkhorn said last quarter that the company expected to maintain a 20% gross margin on cars, excluding leases and regulatory credits, with an average selling price of its electric cars globally above $47,000.

($1 = 6.8684 Chinese Yuan Renminbi)

Reporting by Zhang Yan, Zhuzhu Cui and Brenda Goh; Editing by Anne Marie Roantree; Tom Hogue and Sonali Paul

Our standards: Thomson Reuters Trust Principles.

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