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Tesla Metal Spill Follows Safety Fine

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The latest in a spate of bad news for Tesla Motors, Inc. (TSLA) is the revelation that the factory which recently witnessed a hot metal spill had earlier been fined for a safety violation which had resulted in an injury. According to media reports, a state official disclosed that the Fremont factory had been fined $2,700 by the California Division of Occupational Safety and Health last year.

The fine was imposed after an accident investigation revealed that a hydraulic power press at the factory lacked a proper stop control. Another factory of Tesla in a different location was also fined two years ago for an accident. A worker was injured in the incident.

Although these incidents are not related to the recent metal spill incident, they might raise concerns about the safety measures employed in Tesla’s factories.

The latest accident was caused by failure of a low-pressure aluminum casting press, which resulted in the spilling of hot metal that injured three employees. One of them suffered serious burns on the chest and upper body. The other two suffered minor injuries. All three employees were admitted to Santa Clara Valley Medical Center in San Jose with second-degree burns. However, one of them was released on Wednesday.

The California Division of Occupational Safety and Health will look into the incident to see if safety specifications were met by the factory. The government body will interview witnesses and examine training documents and manuals.

The factory was formerly jointly-owned by General Motors Company (GM) and Toyota Motor Corporation (TM). It was taken over by Tesla four years ago and was transformed into a state-of-the-art facility.

The incident follows three incidents of Model S electric car catching fire in five weeks. Consequently, Tesla’s stock has suffered significant losses in the last few weeks.

Tesla currently carries a Zacks Rank #3 (Hold). Another automaker Ford Motor Co. (F) is worth considering at present, with a Zacks Rank #1 (Strong Buy).

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