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December 08, 2020 12:54 AM

Why Tesla faces recruitment problems at its new German factory

Burkhard Riering
Automobilwoche
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    Reuters

    So far, Tesla has found only a fraction of the engineers it needs for its new European factory near Berlin.

    Tesla CEO Elon Musk is trying as hard as he can to show that his company is an attractive employer as the electric-car maker struggles to find employees for its new European plant near Berlin.

    But as the summer 2021 opening date approaches, Musk is finding the task of finding willing workers more difficult than expected.

    Tesla must hire up to 7,000 employees quickly because the first cars are scheduled to roll off the assembly line at the plant in Gruenheide as early as next July. By the end of 2022, another 5,000 employees must be added to ramp up production.

    However, about eight months before the planned production start, 5,000 of the 7,000 production workers still need to be recruited, people familiar with Tesla's recruitment efforts told Automobilwoche, a German language sister publication of Automotive News Europe.

    In addition, Tesla still needs to hire more than 100 engineers.

    As time runs out, Tesla representatives have mounted a global search for suitable staff. And when Musk visited Berlin to receive the Axel-Springer-Award for innovation last month, he pulled out all the stops to accelerate the recruitment process. He conducted job interviews personally and went on a publicity blitz, signing autographs and posing for selfies.

    Earlier this year Musk thought it would be easy to find workers for Tesla's first European plant. After all in the rest of the world, people beat a path to Tesla's doors. "They all want some of Tesla's pixie dust," Musk said in an interview with Automobilwoche in August.

    But Germany reacts differently, as Musk is currently learning.

    Negative media reports about rude manners, Tesla's "hire-and-fire" system and the overbearing presence of the boss could be putting off potential candidates. So far, only a fraction of the engineers needed for vehicle manufacturing have been hired.

    Accounts from people already working at Gruenheide are not helping the situation. The working climate is frosty, the organization confused, and chaos reigns in many places, they say. The mood in the current team and among the companies working on the site is low.

    The pressure on employees is extreme. "The most important qualities needed to work at Tesla are resilience and flexibility. An important criterion is the willingness to go the extra mile during work peaks," an official from the local goverment employment agency told Automobilwoche.

    In some cases, people are reaching their limits. Managers have already left Gruenheide in a hurry or were fired by Musk. A few weeks ago, the executive overseeing the plant's construction, Evan Horetsky, had to leave because he contradicted Musk in meetings, something that is not tolerated.

    Tesla has also already lost the manager of the casting unit and another construction department manager. Ten engineers who were hired to help build the plant chose to quit when their probation period was completed, Automobilwoche has learned. More than other 10 managers are being personally monitored by Musk himself.

    In 2018, Wired magazine wrote in an article headlined "Dr Elon and Mr Musk" that when Musk is in a bad mood, he likes to fire people.

    According to a survey conducted by the Berlin-based pollsters Civey for Automobilwoche, 36 percent of those surveyed consider Tesla an attractive employer, but 32 percent think the opposite. A surprisingly high proportion of almost a third did not want to answer.

    Reuters

    Musk: "As far as my management style is concerned, Tesla is worth twice as much as the rest of the U.S. auto industry put together. I think it's fair to say that I must be doing something right."

    Skilled worker shortage

    The German press has been quick to cheer the thousands of jobs that Tesla is bringing to eastern Germany, which fell behind the western part of the country during Communist rule, even printing interview tips and the email address for applications. The head of the Frankfurt/Oder government employment agency was reported as saying that starting salaries for unskilled workers at the plant are "fantastic."

    One reason for Tesla's recruitment problem is that workers with the skills the company needs do not have any trouble finding work elsewhere.

    "It is still not easy to find digitally-savvy specialists. Anyone who wants a job already has a job -- even in the coronavirus crisis," said Jan Mueller, from the Korn Ferry personnel consultancy. "Why should someone who has a 35-hour week, 30 days vacation and a good salary at BMW switch to Tesla, where they have to work 80 hours for less salary and less vacation?"

    Tesla is not bound in Germany by collective bargaining agreements and the big automaking union, IG Metall, wants to change that. The 2.3 million-member union is on a collision course with Musk, Bloomberg reported.

    Brandenburg's Economy Minister, Joerg Steinbach, who was instrumental in luring Tesla to Germany, also has said that the company should accept collective bargaining, something Musk is not keen on. Musk has already had this dispute with unions at the automaker's Nevada plant in the U.S.

    As of Dec. 1, Tesla was offering 304 positions at the new plant, from global supply manager to site reliability engineer.

    "As far as my management style is concerned, Tesla is worth twice as much as the rest of the U.S. auto industry put together. I think it's fair to say that I must be doing something right," Musk told Automobilwoche in August.

    Tesla's German Gigafactory
    • When the plant is running at full capacity in 2022, it will employ about 12,000 people in Gruenheide, a community of just 8,000 people southeast of Berlin, not counting jobs linked indirectly to the project.
    • In the same year, 500,000 cars will roll off the assembly line, initially mainly Model Y SUVs.
    • A large battery factory will also be built. Tesla plans to produce large numbers of XL 4680 battery cells there for the first time. Initially, the capacity will be 20 gigawatt hours per year. Gruenheide will "possibly" one day become the world's largest battery cell factory, Musk said in November.
    25 top guns

    Musk is setting up a task force at Gruenheide with 25 trusted executives who report directly to him. The task force's name is "25 Guns."

    Tesla has apparently found a plant manager in Rene Reif, former head of the Mercedes-Benz plant in Berlin.

    Construction companies that are linked to the plant are under pressure. Architect firm Assmann has been fired, according to reports. Assman "neither confirmed nor denied" this when asked by Automobilwoche.

    The construction company currently building the plant, Max Boegl, says construction is fully on schedule.

    Musk is currently riding a wave of success with Tesla. The automaker's stock market value has exceeded the 500-billion-dollar mark, making it the most valuable car company in the world, by far.

    This year the company will be included in the Standard & Poor's 500 leading index. Major shareholder Musk has now risen to become the second richest person in the world, ahead of Microsoft founder Bill Gates.

    Tesla, which had always made losses since it was established, has now broken even for five quarters in a row. The net profit for the quarter just ended was $331 million. However, the profit was partly achieved only by selling CO2 emission credits to other automakers such as Fiat Chrysler Automobiles.

    For Musk, nothing is as important as completing construction of the new plant by next summer. Tesla is well known for putting up factories in record time. The company has estimated Grunheide will take just over a year. In Shanghai, Tesla built its gigafactory in 11 months.

    But Germany does not have a managed economy like China. In a worst-case scenario, company insiders have estimated that completion of the factory could be delayed by three to six months due to planning issues and a lack of personnel.

    But one insider disagrees: "Musk will not allow that to happen. Somehow or other, a finished car will roll out of the plant in July 2021, no matter how it was built."

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