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Elon Musk Pushes Back Against Reports That Tesla Paid Workers $5 An Hour

After initially expressing concern, today the CEO took a more aggressive stance, asserting that his company paid workers $55 an hour.

[Photo: Flickr user Samferdselsdepartementet]

Tesla founder and CEO Elon Musk is forcefully disputing an explosive story that alleged that 140 Eastern European workers were paid $5 an hour to build a paint shop for the Model 3 sedan in California.

When the story, "The Hidden Workforce Expanding Tesla’s Factory," first ran in the San Jose Mercury News on Sunday, Musk initially expressed concern, tweeting: "Sounds like the wrong thing happened on many levels. Will investigate and make it right." The next day, Tesla issued a statement claiming that it acted legally, but added that "mistakes were made" and vowed to "put in place additional oversight to ensure that are workplace rules are followed even by sub-subcontractors to prevent such a thing from happening again."

In a tough editorial on Wednesday, the Mercury News called the "betrayal" by Tesla "disappointing" and noted that federal regulators were interested in reviewing the case for possible wage and immigration violations.

But by Wednesday afternoon, Musk had changed his tune and was aggressively pushing back against the allegation, tweeting that "less & less of the Merc story appears to be true." He insisted that Tesla had paid an hourly rate of $55 an hour and teased the paper for allegedly missing a digit in its reporting of employee wages. He also tweeted a letter from the counsel for one of Tesla’s contractors to the newspaper, repeating the $55 an hour rate and disputing some allegations made about the foreign laborer’s visas.

When questioned by Jordan Golson from the Verge, Musk conceded that it’s possible the subcontractor ISM Vuzem only paid its workers $5 an hour and pocketed the $50 per hour difference. A representative from Vuzem USA in South Carolina was not available for comment when contacted by Fast Company.

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