U.S. Markets open in 1 hr 15 mins

Tesla Must Hire About 360 People at N.Y. Plant to Avoid Fine

Brian Eckhouse

(Bloomberg) -- Tesla Inc. needs to hire about 360 more workers at its massive solar factory in Western New York if the company is going to meet a state employment quota and avoid paying a penalty.

There are more than 1,100 workers at the plant in Buffalo, according to the city’s mayor and a member of the state Assembly who recently toured the state-subsidized complex. The company’s deal with New York includes an April deadline to hire 1,460 workers or pay a $41.2 million penalty.

It’s a goal that Buffalo Mayor Byron Brown still thinks is attainable. “From the tour I took, it certainly looked like Tesla was in a position to honor its commitment,” he said in a phone interview Thursday.

The success of the plant, called Gigafactory New York, is crucial to the future of Tesla’s solar business. The sleek photovoltaic shingles it produces to form solar rooftops were a key piece of Chief Executive Officer Elon Musk’s push to acquire debt-ridden SolarCity Corp. in 2016. But the factory has been slow to ramp up since output began in late 2017, with just a single production line running a year later.

In early 2019, Musk announced the plant was moving toward mass production, saying that it would be the “year of the solar roof.” But the glass tiles have yet to capture a significant piece of the market.

New York bet heavily on Tesla’s factory, committing $750 million to build the 1.2-million-square-foot plant. When Assemblyman Sean Ryan, whose district includes Buffalo, toured it about 15 months ago, there was so much vacant space that “you could’ve played tennis,” he said.

Now that’s changing.

“It’s an amazingly different visual now,” said Ryan, referring to the ramp-up in manufacturing that has occurred inside the plant. In addition to solar roof tiles, the factory produces energy-storage and supercharger components.

Tesla didn’t respond to a request for comment. In a filing Thursday, the company said it is anticipating “meeting the remaining obligations through our operations at this facility and other operations within the State of New York.”

(Adds details about factory output in penultimate paragraph)

--With assistance from Dana Hull.

To contact the reporter on this story: Brian Eckhouse in New York at beckhouse@bloomberg.net

To contact the editors responsible for this story: Joe Ryan at jryan173@bloomberg.net, Reg Gale

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.