Tesla's tough week: overworked employees, sexist culture, and a stock downgrade

March 1, 2017

Tesla's week hasn't been as rough as Uber's, but still, CEO Elon Musk is probably looking forward to Saturday. 

1. Things began simmering over last Thursday, when Musk responded to allegations that the company's workers in Fremont, California are overworked and underpaid. In an email to employees, he said the claims were "disingenuous and outright false".

He also used the opportunity to argue against unionization, which Fremont workers have been trying to do for some time. He claimed that such a move would have a seriously negative impact on Tesla's productivity.

2. On Monday, things got worse when David Tamberrino, an analyst at Goldman Sachs, downgraded his rating for Tesla stock to "sell". Share prices have fallen some 10 percent since the announcement. 

Why would Tamberrino downgrade such a high-profile company? He offered at least three reasons:

  • The purchase of SolarCity, which could become a distraction for Tesla at a time when it needs to be focused on becoming a leading manufacturer of electric cars. 
  • The upcoming Tesla Model 3, which Tamberrino fears will experience production and delivery delays like those of other Tesla models
  • Tesla's plans to build as many as three more Gigafactories, which would likely force the automaker to sell more shares and dilute the value of existing stock.

3. Then yesterday, the world learned of AJ Vandermeyden, a female engineer at Tesla who's suing the company for sex discrimination. She says that Tesla fails to pay women as much as men; that the automaker doesn't promote female employees as quickly as their male counterparts; and that Tesla has fostered a hostile work environment in which women are harassed and humiliated. 

Tesla has since responded to those allegations, noting that the company hired an outside firm to investigate Vandermeyden's claims last year. According to Tesla, that investigation showed that Vandermeyden's "claims of gender discrimination, harassment, and retaliation have not been substantiated."

Vandermeyden and her lawyer disagree with the investigation's findings and have since filed suit.

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