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Live from Tesla's Gigafactory — Company towns and the things they breed

This Week in Elon
Live from Tesla's Gigafactory — Company towns and the things they breed
By Elizabeth Lopatto • Issue #16 • View online
Welcome to This Week in Elon. Quick reminder: we are off next week for Thanksgiving. Enjoy the holiday!
This is Sean O’Kane, filling in for Liz, who is vacationing at an undisclosed location in the northern hemisphere and is (hopefully) very far away from her phone right now. I am also on the road this week for a story we’re working on about Tesla, so this newsletter is coming to you live from [drumroll] Reno, Nevada. Or, actually, Sparks, Nevada. Okay, technically, I’m publishing this from a van on a highway in northern California.
The point is, we went to the Gigafactory this week. It was the first time The Verge had been to the Gigafactory since the official opening in 2016. I won’t go too long on the experience here, since we’ll have a more in-depth look on the site in the coming weeks. (Suffice to say, it’s a big place! Who knew.)
But what struck me about Reno, Sparks, and the factory itself is how it is (and isn’t) like some other really famous company towns.
I have a mild obsession with company towns, and two in particular always jump to mind. One is the community Henry Ford built around the River Rouge plant in Michigan. River Rouge was a vertically integrated plant — Musk has said it was an inspiration for Tesla’s similar approach with the Gigafactory — and Ford applied this thinking to his workers, too.
Ford famously pioneered a $5 a day wage at his factories to allow (in part, at least) the company’s workers to be able to afford the cars they made.
More than just enabling them to buy the company’s cars, Ford had the company offer friendly loans for employees to buy houses, and in some cases provided housing for his workers. His desire to fully integrate his workers into the company vision ran so deep he even set up a school to teach English to his immigrant employees.
Ford, a noted racist, made graduates of that school dress in indigenous clothing, step into a giant “melting pot” prop on the stage, change into “American” suits and hats, and emerge — and this is according to the Henry Ford Museum — “waving American flags, having undergone a spiritual smelting process where the impurities of foreignness were burnt off as slag to be tossed away leaving a new 100% American.”
Ford didn’t stop there, either. The company had a “Sociological Department” that investigated whether employees were being “model Americans.” He also cleared a huge swath of the Brazilian rainforest in an attempt to build a rubber factory, and created an entire town for the workers, hospital and church included. It was called Fordlandia. There’s a whole book about it that I can’t recommend enough.
The other company town I always think about is the one called Lost Hills run by Wonderful, a major California farming company that also makes POM juice and Fiji water. Wonderful’s owners, a billionaire couple named Stewart and Lynda Resnick, have built trailer parks for field workers, and use dietitians and trainers to push employees to eat healthy and exercise more.
The story of Wonderful and Lost Hills was captured in this vivid California Sunday Magazine piece, which I also strongly endorse. The TL;DR is that Wonderful’s is a more nuanced situation than Ford’s Big Brother-ish approach to creating a company town. While there’s plenty of reason to bristle at the Resnick’s vision, or their approach, there’s definitely more room to argue they’re doing some good for their employees.
To be clear, I’m not saying Tesla is like either of these two examples. But after a few days in the Reno-Sparks area, it’s hard to deny that something is brewing. Browse a convenience store at the right time of day and you’re likely to spot a Gigafactory worker in a black Tesla baseball cap making a pit stop before or after their shift change. Model 3s, Ss, and Xs dot the highways, though not in the same overwhelming numbers close to the company’s Fremont, California factory. Tesla is an easy, even common topic of conversation at Reno restaurants, hotels, or even the Wal-Mart parking lot.
Beyond that, though, Tesla once offered temporary trailers to newly relocated employees. And it’s considering building a housing compound to accommodate a coming hiring boom. The Gigafactory already employs more than 10,000 workers (including the Panasonic employees), and housing in the area is stretched so thin that a few are living in their cars in various parking lots.
Tesla is also now firmly on the path to a global Gigafactory expansion, with a lease signed in China and a European location announcement on the horizon. These new Gigafactories will in turn employ thousands of new employees, in countries with different cultural norms and protections for workers. Whatever path Tesla takes as it moves forward, it’s worth keeping cases like Ford and Wonderful in mind along the way.

This has been one of the first relatively quiet weeks in a while in the world of Elon Musk, which obviously means that the minute I click send, some big news will assuredly drop. At least you can now plan your Fridays accordingly.
But seriously, though, what a wild few weeks! Tesla has a new chairwoman, who now overlooks a company facing a number of open investigations. We tried the newest feature that got added to Autopilot. Tesla had its first profitable quarter in two years, thanks in large part to the Model 3’s popularity (and the company finally being able to make — and deliver — enough to meet the demand). Also, the onsite health clinic at Tesla’s Fremont, California factory came under fire after a new report from Reveal and the Center for Investigative Reporting aired fresh claims of under-reported workplace injuries.
I don’t want to litigate that last one today — the director of the clinic spoke to me for this piece in response, and I think a lot more has to come to light before we can truly understand what is going on here. But it is certainly another example of how Tesla is evolving its relationship with its workers.
Anyway, to the rest of this week’s news!
Tesla’s profitable third quarter has, in a way, reinvigorated its critics, who now seem to be digging even deeper to try and find a reason to bet against the company. There is a vast well of information worth exploring in the company’s most recent SEC filings, though maybe things are actually mostly fine? That said, the news that the company just lost a longtime employee with a boatload of experience dealing with securities fraud seems like yet another case of bad timing, considering, you know, all the federal interest lately! Occam’s razor kind of cuts both ways here. Which side of the blade do you have?
Tesla short sellers continue to sow doubt, but the numbers back up earnings
Tesla Loses a High-Ranking Lawyer Just as SEC Tightens Grip - Bloomberg
Tesla, GM and Nissan are all part of a new coalition aiming to extend the EV tax credit – TechCrunch
At this point in time, you could set your watch to Steve Wozniak’s criticisms of Tesla. But Fred Lambert, who runs Tesla-boosting EV blog Electrek rarely shares a stiff word about the company. So when Lambert wrote about how his Model 3 is having some legit problems in cold weather, people took notice! And yeah, this does seem bad, to the point that I — no joke — had a dream last night that I was unable to open a Model 3 door in the winter. It was frustrating, though not so verifiable!
Apple co-founder Steve Wozniak: Tesla makes so many mistakes
Tesla Model 3 showing some important flaws in cold weather - Electrek
California wildfires: Musk ridiculed/thanked for help offer
The Tesla Quiz: How Well Do You Know Elon Musk's Carmaker?
That Bloomberg quiz is fun, and tough! I for sure got a couple wrong.
Longtime TWIE readers know Elon Musk wants to make a Tesla tequila called Teslaquila. You may or may not be surprised that the Tequila Regulatory Council (TRC) is not totally psyched about the idea! Elon Musk apparently doesn’t care, having tweeted “We will fight Big Tequila!” Honestly, the most 2018 way to end 2018 is a big legal battle between Musk and Big Tequila. Bring it on!
Elon Musk bought trucking companies to hasten Tesla Model 3 deliveries - Roadshow
Last but not least, to SpaceX, which successfully launched and landed another used rocket this week. Yawn.
Just kidding! It’s still exciting to watch. The company has now launched as many rockets as it did in all of 2017, and there’s still up to 4 on the books for the rest of this year. Meanwhile, SpaceX’s internet satellite project is moving apace, even after some reportedly sudden October firings.
SpaceX wants to fly some internet satellites closer to Earth - The Verge
SpaceX launched and landed another used Falcon 9 rocket - The Verge
Did you enjoy this issue?
Elizabeth Lopatto

This Week in Elon is a segment on The Vergecast hosted by Deputy Editor Elizabeth Lopatto and now available as a limited-run newsletter. If you want all of the dizzying news about Elon Musk and companies delivered to your inbox on Thursdays, subscribe!

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