The visibility on Tesla’s Model 3 production ramp-up took on some new dimensions this week, as U.S. national morning news program CBS This Morning aired a segment featuring Tesla auto workers expressing concerns about on the job safety.
Supply Chain Matters has featured several prior blog commentaries regarding the both the supply chain and actual production ramp-up challenges for the new Model 3 sedan. The reality remains that Tesla must ramp-up its annual production from the current rate of 84,000 to 500,000 vehicles per year over the next two years. 
Tesla initiated pilot production of the soon to be mass-produced for the masses Model 3 in February, to coincide with company’s annual report to stockholders. In a letter to shareholders, CEO Elon Musk declared that Model 3 product development, supply chain and manufacturing are on-track to support volume deliveries in the second-half of this year, while installation of manufacturing equipment was underway at both the Fremont California and the Nevada based Gigafactory. The company expects to invest somewhere between $2 billion and $2.5 billion in capital expenditures ahead of the start of Model 3 production and by our lens, there is little tolerance for missteps in engineering and process design. Initial reports of strains in the workforce came after the final quarter of 2016 when production workers were called upon to make-up production time for some supply-chain snafus. Additional reports of worker fatigue came prior to Tesla’s February formal reporting of both Q4 and 2016 performance.
This week’s televised report adds yet another dimension, that of a production workforce that continues to express concerns related to excessive work hours leading to added workplace accidents.
The CBS News report cites data from advocacy group Worksafe that released Tesla safety data to back-up worker concerns. A Tesla production worker, on the advice of the United Auto Workers labor union, obtained three years of worker injury reports. A reported independent analysis of the numbers pointed to a 31 percent higher than industry average rate of serious injuries, that resulted in either days away from work or restricted duty.
The segment also features video of Tesla’s HR Manager and three production managers all indicating that the company maintains worker safety as a top priority. Ongoing efforts to prepare for the addition of Model 3 production include ergonomics experts being brought in and the addition of an extra third-shift, to replace two 12-hour shifts, to mitigate worker fatigue and burnout.
To be balanced, the CBS News report does provide an undertone of an effort by the four interviewed production workers to seek other safeguards. The other backdrop is that the United Auto Workers is possibly marshaling a labor union representation campaign. That adds another dimension of ongoing challenges for Tesla
In either case, as this news report implies in video, Tesla will need to re-double efforts to make the majority of its production workers feel more optimistic that the full ramp-up will not be perceived to be at the expense of worker safety and burnout.
No one, including production workers, seems to be disputing the engineering and design features of the Model 3. But, something compelled a small group of production workers to go public and voice concerns, and that adds a more visible dimension to Tesla’s supply chain and manufacturing ramp-up.
© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
