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BUFFALO, NY – By Dan Telvock
In November, when Tesla invited the media to the Buffalo solar plant for the first time, the company announced that 800 employees were working there.
Tesla officials said the total number of employees was equally: 400 people were working at Tesla and 400 for his partner, Panasonic, which manufactures modules and solar cells in the same plant.
In February, two former licensed employees appeared on News 4 and questioned the employment figures published by Tesla..
The company has challenged their account.
"At the end of 2018, we explained to the media that Gigafactory 2 had about 800 employees on site, about half of Panasonic and half of Tesla, well above state requirements imposing a total of 500 on-site jobs . Figures released to the state for 2019 will be about 800 on the spot. "
But News 4 Investigates got a list of employees at the Tesla plant in South Buffalo for the month of December, which raises questions about whether the company actually employs so many workers. At that time, the list shows that Tesla employed fewer than 300 people in the factory. The source who provided the list of employees, who is familiar with the plant and its operations, requested anonymity for fear of reprisals.
Tesla disputes the number, and said the list obtained by News 4 does not give a complete picture of the job, but refused to provide any documentation to support.
But others are curious about how many people actually work in the factory.
"I've always had a lot of questions about the number of employees," said Linnea Brett, an organizer who assists Tesla employees during a union campaign.
"My assessment has always been that I can not imagine how many people there are in the institution and I am a little surprised that the state of New York has not actually verified this numbers."
State officials have announced that they will take steps to ensure that Tesla accurately communicates its employment figures and capital expenditures. Tesla's working report documents will be available in a few weeks, Empire State Development said.
In addition, News 4 Investigates learned that the state's largest tax authority had launched an audit of high-tech programs at Empire State Development and that it would include the Tesla at Riverbend project in its review.
This is good news for John Kaehny, from the Reinvent Albany government group.
"This deal has completely failed and it has become a fiasco for taxpayers," said Kaehny.
In addition, there is still some question as to why in 2015 the state made several amendments to the agreement with the solar panel manufacturer to reduce this year's employment targets by more than 40% and to exit for the solar panel company if changes were made to local, national or federal regulations or policies have a negative impact on the company.
The number of jobs is important as state taxpayers invested $ 750 million to build and equip the solar panel manufacturing plant as part of Governor Andrew Cuomo's Buffalo Billion initiative. The number of jobs is one of the only mechanisms of agreement which the state can hold Tesla accountable. If Tesla misses its goals, the state can recover $ 41.2 million a year.
"It will be a miracle that New York taxpayers recover their money from the $ 750 million spent on the Riverbend Tesla factory," said Kaehny.
Discrete amendments by the state
If all went to plan, the huge solar panel plant in South Buffalo would employ 900 people in the high-tech sector, a huge gain for a city that aspires to higher-paying jobs. The name on the taxpayer-funded building would have been "Silevo", and the Triex solar panels coming out of the facility were supposed to be more efficient and cheaper than any other on the market.
"It's bigger than anything we could imagine," Governor Cuomo said at a press conference in 2014.
But a lot has changed since the pen hit the paper on the initial 2014 agreement between the state and Silevo, a startup solar module company.
For starters, in 2014, Silevo was acquired by SolarCity, headed by President Elon Musk and his cousin and CEO, Lyndon Rive. They were going to commercialize Silevo's Triex solar technology, which the state considered "of crucial importance to the economic competitiveness and energy independence of the United States."
The agreement with the state required Silevo to create 900 high-tech jobs at the Buffalo plant by this year. This requirement will increase to 1,460 jobs in the high tech sector by April 2020, with Tesla expected to spend $ 5 billion in the region over the next 10 years.
However, in 2015, a non-profit state branch, the Fort Schuyler Development Corporation and the Research Foundation of the State University of New York, quietly began making concessions. to society without any information or public disclosure.
Critics say SolarCity had already begun to realize that Silevo's Triex technology was failing. Concerns were expressed about its ability to meet the 2019 employment commitments.
In October 2015, state officials agreed to reduce the goal of 900 jobs for the goal of 500 jobs. In addition, the state agreed to add an exit strategy for the manufacture of solar panels if changes to local, regional or federal regulations or policies were harming the business.
"It's a hedge," said Kaehny.
"This is an issue for Tesla if the federal subsidies for solar power generation disappeared and it allowed them to manage to move to New York State and taxpayers."
Two months later, another amendment was made to the agreement.
This time, the state agreed to remove "advanced technology" from the job description, thus allowing the company to save money by avoiding paying more wages employees, said critics. News 4 reported in December that the average salary at the Buffalo plant was $ 16.20 at the time.
"It's disappointing," said Senator Robert Ortt, R-Niagara, about Tesla's hourly wage.
"This is not what we were told."
Empire State Development, the state's economic development agency, said it was neither part of nor involved in negotiating the amendments to the agreement. These decisions were left to a non-profit government branch headed by Alain Kaloyeros, who is serving a three-and-a-half-year prison sentence for spending hundreds of millions of dollars on developer contracts, including LP Ciminello of Buffalo , who donated to the group. governor's campaign.
"The recipient company has undergone significant changes in its business structure, business model and industrial environment since the beginning of the project," said a spokeswoman for EDD.
"These changes, along with other events such as the imposition of international tariffs and Tesla's decision to partner with Panasonic on the site, all affected the nature of the products, the production structure, the distribution strategy and the employment profile of the project, which continue to be felt. evolve. "
The EDD also said that "the overall commitment of 1,460 jobs … has not been reduced".
In 2016, Tesla, led by Musk, acquired the company of its cousin, SolarCity, for $ 2.6 billion. The agreement angered some shareholders who filed a class action suit against Musk and the company's board of directors alleging breach of fiduciary duties.
In December 2016, Tesla entered into a partnership with Panasonic and Silevo's Triex technology finally seems to have reached its goal.
Since then, Tesla has continued to struggle financially.
He announced a loss of $ 702 million for the first quarter of this year, as sales of his electric cars collapsed and the buildup of the solar roof manufactured in Buffalo was again delayed.
In addition, Tesla has announced more bad news regarding its solar installations. which dropped 38% over last year. A senior analyst at Wood Mackenzie Power & Renewables believes the slowdown will take Tesla third in the residential solar installer market.
Earlier this week, Tesla announced in a New York Times article that it was reducing the cost of its solar panels, while asking customers to buy the products directly on their website. Tesla also announced Thursday its intention to raise $ 2 billion of capital by selling common shares and convertible notes, although Musk noted during its call for results last week that he did not think that mobilizing more capital should replace Tesla's increased operations. effectively.
Nevertheless, Musk has kept a good overview of the prospects for the Buffalo plant and solar roofing technology when announcing April 24 results for the first quarter. He added that Tesla is in its third version of the solar roof design and continues to test its durability.
"The speed at which you can iterate on Solar Roof is necessarily slowed down by the accelerated rate of aging on the roof and we want the installation process to be simple and easy," said Musk.
"I was actually at the Tesla Buffalo plant a few weeks ago. I have been very impressed by the team and we are looking forward to stepping it up considerably for the rest of the current year. "
Target of employment
Tesla has achieved its target of 500 employees very well this year, but neither the company nor the state has ever provided supporting documentation.
The only official employment data that News 4 has been able to obtain from the State goes back to the end of 2017, when Tesla employed 188 workers and Panasonic employed 279 workers at the site.
The list of employees obtained by News 4 indicates the names of the factory workers in December 2018 – before Tesla laid off about 50 employees – and the number of workers in each of his four positions.
Even less is known about the number of workers on the Panasonic side. The state has no agreement with Panasonic and Tesla reports the total jobs of this company. Panasonic officials did not return any comments emails.
Musk's promising prospects for the Buffalo plant at last week's press conference do not take into account the huge challenge that Tesla will have to meet next year to reach the target of 1,460 employees of the company. state and slow progress of its highly anticipated solar roof.
"How can we check the numbers?" Said Ortt.
"So, when you see these numbers, I would just like to know where these figures come from."
Ortt and the state taxpayers might soon know it.
The audit by the State Comptroller's Office will look closely at the Riverbend project.
In addition, Empire State Development (ESD) has stated that it will exercise due diligence to verify the data on the jobs provided by Tesla in the coming weeks.
For example, ESD has a memorandum of understanding with its State Labor Department to request actual employment data from the unemployment insurance program, which is confidential information. ESD can then internally use the confidential data to check the totals of the declared jobs.
ESD also stated that "through ongoing visits and active work with Tesla and Panasonic, the state will continue to monitor Tesla to verify its efforts to achieve its employment goals."
Cuomo, and his lieutenant governor Kathy Hochul, said this month that the state would recover $ 41.2 million in fines if employment goals are not met.
Some critics have already thrown in the towel.
"The public really should not expect much at this stage because this deal is concluded," said Kaehny.
"We are the losers here, and the people of Buffalo are the losers here because this money could have been spent on foolproof solutions."
Tesla's full statement to WIVB:
"In January, when WIVB first raised the question of Tesla membership, we were transparent and shared our workforce for the period in question (December 2018). At the time, we had about 400 employees on site, in addition to Panasonic employees. We had a lot more jobs in December than they claim, and we plan to meet our hiring requirements at the state level when we communicate. the number of our jobs in the coming weeks. Despite the repeated presentation of the facts about our membership in Buffalo, WIVB knowingly reports information to the public that it admitted to Tesla is incomplete. It is clear that WIVB is not interested in reporting the facts to the viewers, it is apparently apparently intent on publishing something that is patently false. "
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