Will Our 'Green Jobs' Dollars Help a Ritzy Car Company Open a Toxic Manufacturing Plant?

Financial aid from various levels of government is driving Tesla Motors Inc. to expand its production of jazzy electric cars and parts. But will the company make their clean-emission vehicles at a site that some say is unsafe?

Currently, Tesla finalizes assembly of 1,000 electric Roadster models annually in San Carlos, California, said Tesla spokesperson Ricardo Reyes. Tesla Roadsters are not cars for the masses. At least not yet. Roadsters sell for $110,000. They can drive 244 miles on a single battery charge with zero tailpipe emissions. Well-heeled buyers can see these autos at showrooms in the Golden State’s Silicon Valley and Los Angeles, and in London, Munich and Monaco. Away from these showrooms, though, issues of private wealth and the public power it shapes are clashing in Tesla’s bid to grow.          

Tesla Gets Welfare

In June, the federal Department of Energy awarded a two-part loan totaling $465 million to Tesla. The loans came from the DOE’s Advanced Technology Vehicles Manufacturing Loan Program to help “automobile manufacturers and component suppliers to pay the cost of re-equipping, expanding, or establishing a manufacturing facility in the United States to produce qualifying advanced technology vehicles; or qualifying components; and, engineering integration performed in the United States of qualifying vehicles and qualifying components.” With the loan, Tesla plans to assemble its new Model S electric car; a sedan that would sell for $49,900 after a $7,500 federal tax credit and will be capable of driving 300 miles on a single battery charge. The company also plans to make electric auto parts at a site in northern California. The parts include batteries and power train components.  

Asked about the ATVM loan conditions and the hourly pay of the Tesla work force, Julie Offner, a spokesperson for the ATVM loan program, said: "All of the loan applicants must agree to pay prevailing wages as determined by the Secretary of Labor.” In other words, Tesla must pay wages not lower than those prevailing at similar work sites locally. Here’s a challenge to that provision. There is only a single car factory in California operating now: the New United Motor Manufacturing Inc. plant in Fremont. This union employer (United Auto Workers Local 2244) is a former GM-Toyota joint venture. The plant is set to close April 1, the date both car makers have chosen to end their 25-year alliance. NUMMI is located across the San Francisco Bay from Tesla’s headquarters in San Carlos. There, the non-union employer has a global payroll of less than 500 employees, Reyes said.

The federal government is not alone in giving financial assistance to Tesla. The state of California aids the company, too. In late October, State Treasurer Bill Lockyer announced an agreement between Tesla and the California Alternative Energy and Advanced Transportation Financing Authority, which he chairs. The pact saves Tesla from paying just over 9 percent in state sales tax on $320 million in purchases of electric-car equipment from 2009 - 2011.

We turn from the federal and state help for Tesla to what’s on tap at the local level. In Los Angeles County the city of Downey is courting Tesla to manufacture electric cars at Downey Studios, a former site of Boeing and NASA operations. In late November, the Downey City Council approved a memorandum of understanding for $8.7 million in “economic development incentives” to the Industrial Realty Group, which Stuart Lichter owns, to attract Tesla’s electric-car making plant. Asked for the details of these incentives, Scott Pomrehn, a city spokesman, said the city is waiving $6.9 million of IRG’s future rent payments on 20 acres of property it leases from the city at the Downey Studios site.