Monthly Archives: November 2016

The Unionizing Tesla

Some Tesla factory employees are turning to the United Auto Workers to help them improve pay, safety and workplace conditions at the company’s massive San Francisco Bay Area auto-assembly plant, according to a blog post by an individual identifying himself as one of those employees.

A move to unionize workers at the plant comes at a critical time, as Tesla targets exponential production increases with the rollout of its $35,000 Model 3 electric sedan starting late this year.

In a post on Medium.com titled “Time for Tesla to Listen,” Jose Moran said he’s been a “proud” team member at the Fremont, Calif., facility for four years, but that more needs to be done to improve circumstances at the fast-growing operation.

“Most of my 5,000-plus co-workers work well over 40 hours a week, including excessive mandatory overtime. The hard, manual labor we put in to make Tesla successful is done at great risk to our bodies,” Moran wrote. “Preventable injuries happen often.”

What’s more, hourly pay at the plant ranges between $17 and $21 – below a national average of $25.58 an hour – and doesn’t cover the cost of living in pricey Alameda County, Moran said.

A living wage in the area, home to Silicon Valley, “is more than $28 an hour for an adult and one child (I have two). Many of my coworkers are commuting one or two hours before and after those long shifts because they can’t afford to live closer to the plant.”

As a result, Moran said, “many of us have been talking about unionizing, and have reached out to the United Auto Workers for support.” While the company did offer to raise base wages in November, Moran said Tesla also began asking workers to sign a confidentiality agreement, attended to prevent them from publicly discussing wages and working conditions.

That move drew a letter from five members of the California Assembly members in January, asking Tesla to revise the language of its confidentiality policy, which the members said didn’t adhere to state and federal labor policy rules.

“We are concerned that the over-broad language in the confidentiality agreement violates these provisions and has resulted in a chilling effect on workers’ ability to engage in protected activity,” according to the letter from Assembly members Tony Thurmond, Bill Quirk, Kansen Chu, Rob Bonta and Ash Kalra.

Tesla didn’t directly comment on Moran’s post or his specific claims.

“As California’s largest manufacturing employer and a company that has created thousands of quality jobs here in the Bay Area, this is not the first time we have been the target of a professional union organizing effort such as this,” the company said in a statement. “The safety and job satisfaction of our employees here at Tesla has always been extremely important to us. We have a long history of engaging directly with our employees on the issues that matter to them, and we will continue to do so because it’s the right thing to do.”

CEO Elon Musk later responded more bluntly, telling website Gizmodo that Moran “doesn’t really” work for Tesla. He also defended Tesla’s pay policy for factory workers and said overtime hours are dropping at Fremont.

“Our understanding is that this guy was paid by the UAW to join Tesla and agitate for a union,” Musk said, via direct messages to Gizmodo. “He doesn’t really work for us, he works for the UAW.”

The plant is the only large-scale auto factory on the West Coast, and has been a source of pride for California since Tesla took it over in 2010. For most of its life, starting in the early 1960s as a General Motors plant and then from 1984 until 2009 as joint-venture factory New United Motor Manufacturing, or NUMMI, shared by GM and Toyota, the Fremont facility was a UAW factory.

In May 2010, at a joint press conference with Toyota President Akio Toyoda and then-California Governor Arnold Schwarzenegger announcing Tesla’s purchase of the plant, Musk was non-committal on whether employees would once again have union representation. In response to a press conference question at the time, he said only that such a decision would ultimately be up to plant workers.

In May 2016, UAW President Dennis Williams said the union was watching Tesla “very closely,”according to USA Today. “We just believe workers ought to have a voice in the workplace, and they ought to have collective bargaining rights.”

Musk told Gizmodo he finds Moran’s comments “morally outrageous.”

“Tesla is the last car company left in California, because costs are so high. The UAW killed NUMMI and abandoned the workers at our Fremont plant in 2010. They have no leg to stand on.”

Tesla is racing to ready both Fremont and its massive Gigafactory battery plant in Nevada to start production of Model 3 cars, along with the current Model S and Model X. By late 2018, Musk has said Tesla wants to be able to build as many as 500,000 vehicles annually, or more than five times what it made in 2016. By 2020, the goal is to achieve a production pace of 1 million electric vehicles annually.

In January, Tesla said it built about 84,000 of its premium electric vehicles in Fremont. The company will release its full-year and fourth-quarter results on February 22.

News Expedia Misses Earnings Expectations But In Recent Acquisitions, Orbitz And HomeAway, Are Starting To Pay Off

Expedia missed quarterly earnings expectations on Thursday but said its recent acquisitions of Orbitz and vacation rental platform HomeAway have begun to pad its bottom line.

Expedia, the parent of Hotels.com and Travelocity, reported profits of $183 million, or $1.17 per share, in its latest quarter. That missed analyst estimates of $1.36 by a wide margin. However, revenue increased 23% to $2.09 billion, just beating estimates of $2.07 billion.

Shares of the online travel giant ticked down 4% before recovering  to its market close price of $123.3 in after-hours trading.

During the quarter, travelers spent $16.1 billion on bookings (up 8% from the same quarter last year) and stayed 15% longer in the hotel rooms they booked. Investments in mobile have driven part of this growth, with app users returning to the site twice as many times as the average user. Nearly 1 in 3 transactions booked last year occurred on a mobile device and 45% of online traffic was on mobile.

Expedia’s recent history has been marked by a series of acquisitions of big names in travel, including Orbitz Worldwide and vacation rental marketplace HomeAway. These new subsidiaries contributed $764 million and $689 million in revenue, respectively, last fiscal year.

Trivago, which Expedia IPO’d in December and maintains a 65% stake in, finished 2016 strong with revenue increasing 65% from the same quarter the year prior. Trivago’s stock was up 17% to $13 in after-hours trading on Thursday.

Hotels still make up the bulk of Expedia’s business and accounted for 61% of worldwide revenue last year. Yet, its packages and tours arm has been growing quickly, up 35% in bookings. This was followed by flights and car reservations, which  grew in bookings 32% and 30% last year, respectively.

Expedia is the largest online travel company by bookings and accounts for 13% of the total U.S. travel market. It has operations in Europe, Asia and Latin America and competes mainly with Priceline and TripAdvisor.

The company shelled out $436 million for four million shares last year as part of its buyback program.

Now Travelers Should Care That Trump Is Inclined To Privatize Air Traffic

Top airline executives got a sympathetic hearing from Donald Trump on Thursday when they met with the new president at the White House to discuss issues of concern to the air travel and air cargo industry. But as with every other issue into which Trump dips a toe, offense soon followed.

This time it is the Federal Aviation Administration whose feelings were hurt when the president characterized the air space through which 2 million people move every day of the year, as “totally out of whack” — and he did not stop there.

“Is the gentleman who’s the head of the FAA right now not a pilot?” he asked referring to Michael P. Huerta, whose term as administrator of the FAA ends in 2018.  “I’d like to find out because I think it maybe would be good to have a pilot — like a really good pilot that knows what’s going on.”

To the criticism both veiled (should Administrator Huerta go) and obvious, (the FAA had totally screwed up modernizing the nation’s air traffic control system) the public information office shot back a few hours later.

In a brief but unmistakable defense of its work, the FAA recounted how it had spent $7 billion over the last seven years to incorporate new technology known as NextGen, into the control of the nation’s airspace.

“NextGen is one of the most ambitious infrastructure and modernization projects in U.S. history,” the FAA’s spokeswoman Laura Brown said.

Airlines and other air space users have been participating in the decision-making, so, I think what Brown is saying is, if the introduction of all that fancy-pants technology has been difficult, there’s plenty of blame to go around.

“The FAA invited airline stakeholders to help develop the blueprint for NextGen and they continue to have a seat at the table in setting NextGen priorities and investments through the NextGen Advisory Committee,” Brown said.

The airlines, with the exception of Delta Air Lines, are agitating with Trump and anyone else who will listen, for the privatization of the nation’s air traffic control system which has been a federal government responsibility since it was founded in the thirties.

Air traffic control keeps airplanes separated from each other in the sky as well as coordinating planes on the ground and not just the airliners with which we are most familiar but business jets, emergency medical aviation and Sunday flyers.

Info Qatar Airways Ditches Plans For New Saudi Airline

Qatar Airways has dropped plans to launch a domestic airline in Saudi Arabia, in the latest upset for the Saudi aviation market.

According to an interview with Qatar Airways CEO Akbar Al Baker in the latest issue of Arabian Aerospace magazine, the plans for the airline have been quietly dropped. The interview quotes Al Baker as saying  “Yes I’m disappointed we were not able to launch that airline. We hope we will have another opportunity.”

In some ways, the development is simply a confirmation of what was already apparent. Qatar Airways gained initial approval from the Saudi aviation regulator, the General Authority of Civil Aviation (GACA), to launch Al Maha Airways in 2013. At the same time, GACA gave approval to another new airline called SaudiGulf Airlines, backed by the local Al Qahtani Group. However, while SaudiGulf launched its services in October 2016, there have been persistent delays to Al Maha receiving final approval and launch dates have come and gone without any activity.

Al Maha was to be based in Jeddah and has had a large recruitment drive over recent years. Airbus has also delivered a number of planes to Qatar Airways in Al Maha colours which have been used by the parent airline on some regional routes.

Even as Al Maha struggled to get off the ground, the country’s national carrier Saudi Arabian Airlines (Saudia) announced in Aprilthat it was setting up a new budget carrier called Flyadeal, also to be based in Jeddah. As yet it has not launched any services, but is due to receive its first leased planes from Airbus later this year.

Flyadeal is the fifth new airline to be announced in Saudi Arabia in less than a decade, but the success rate among them has not been encouraging. Budget carrier FlyNAS has done well since it started flying in 2007. In mid-January it signed an agreement for 60 A320neo planes from Airbus. However, another airline launched in 2007, Sama Airlines, was shuttered in 2010 with huge debts.

Qatar Airways has been performing more strongly than its regional rivals, Etihad and Emirates, over the past year, with strong passenger growth through its hub in Doha.