Union-busting trial of Tesla may be a challenge to Silicon Valley

While unions are generally weak in the U.S., in the auto sector there are still strong unions. Tesla is an auto maker but also a key tech firm. The tech sector and Silicon Valley firms are almost free of unions except for a few contract workers.

Car makers have unions but tech companies do not

Musk has always run Tesla as a tech company. Tesla has done a complete redesign of cars and also of the factory workflow. There have been sudden changes in the firm and lots of investment but so far no profit. The cars themselves are high tech. The company can push over the air updates to the software in the car and totally change how it works. Unfortunately, they are also hackable. But they are still basically cars and are used just as conventional fossil-fuel powered cars are,

Tech companies are anti-union

The co-founder of Intel said that remaining non-union was essential for the survival of most tech companies. Companies often paid well and provided employees with perks and benefit packages designed to keep workers happy and feeling they were perhaps better off without a union. Kevin Roose wrote in 2013 the difference between Noyes and present tech entrepreneurs is that at present tech bosses think that unions should not exist anywhere: " When it comes to supporting traditional, UAW-style unions, though, the truth is that Silicon Valley is probably beyond reach. This generation’s tech moguls have gone far beyond Noyce’s claim that the technology industry should be free of those kinds of slow-moving, collective-bargaining organizations. Frequently, they now think every industry should be."

Several prominent venture capitalists have criticized unions. Steve Jobs maintained that the problem with modern schools were teachers' unions. Tech industry space billionaire Jeff Bezos and Amazon head Elon Musk both operate large tech companies that employ large relatively unskilled labor forces. Amazon showed its workers a 45 minute anti-union video part of which said: “We do not believe unions are in the best interest of our customers, our shareholders, or most importantly, our associates. Our business model is built upon speed, innovation, and customer obsession—things that are generally not associated with union. When we lose sight of those critical focus areas we jeopardize everyone’s job security: yours, mine, and the associates’.”

Auto manufacturers have long been unionized

Car companies in the US and elsewhere have been unionized for ages as a New York Times article put it: "Prodded by its once-powerful and socially conscious union, the auto industry served as the 20th-century trailblazer in spreading prosperity to millions of workers and their families and fostering middle-class security through higher wages and company-sponsored benefits.."

The United Auto Workers was formed way back in 1935. GM has been unionized since 1937, Ford since 1941. While union strength has dwindled as foreign competitors challenged the big three and union power generally was weakened in the US with the rise of globalization, unions still prevail in the auto manufacturing area even in the US. The auto workers union has been trying for years to organize at Tesla as it is after all a company that makes cars however high tech they are.

Tesla and Elon Musk resist unionization

In 2017 Tesla factory worker Jose Moran posted on Medium that long hours of work at Tesla stressed the bodies of workers. He also pointed out that Tesla pay was lower than that of other auto manufacturers. He urged workers to unionize. He also claimed that a confidentiality policy workers were required to sign frightened people and quashed unionization. Musk answered in an email claiming that the UAW did not share the Tesla mission. He said that the true allegiance of the UAW would not be to Tesla but the giant automakers from whom the union derived much more in dues than they would ever get from Tesla workers. One wonders then why the UAW would bother trying to unionize Tesla at all.

There is strong evidence of Musk's anti-union stance in some of his tweets. In May he tweeted: “Why pay union dues & give up stock options for nothing?” The UAW complained to the National Labor Relations Board (NLRB) the next day.

Tesla is accused of breaking federal law to restrict organizing, as well as retaliating against pro-union workers. The trial started in June but ran only a few days before a gap, The trial was based upon an August 2017 complaint by the NLRB that Tesla was involved in illegal union busting. NLRB lawyers contend that one worker was fired and another warned after union involvement,

At the trial in Oakland California Moran testified that Musk told both him and a co-worker that representation from the UAW would mean that they would not really have a voice that only the UAW not the workers would have a voice. The next day there was testimony to the effect that the head of Tesla's human resources, Gaby Toledano was sent emails that discussed promoting Moran and a second union supporter so they could not continue working to unionize staff. Toledano has since left Tesla. The following day Tesla manager Josh Hedges testified that the company would not hire people who would not sign a confidentiality agreement as the company feared leaks. The NLRB claims that this illegally restricts workers' rights. Hedges is also leaving the company as of October 5. If found guilty no doubt Tesla will appeal.

Tech workers have expressed anger at how their products are used

Some tech workers have complained not so much as to their everyday working conditions but about their lack of control over how what they produce is used. 3,000 workers at Google signed a letter protesting the company's involvement in processing drone imagery for the Pentagon. Another 1,400 Googlers protested a possible censored search engine for China. More than 100 Microsoft employees signed a letter protesting the company's work with the US Immigration and Customs enforcement.

There are several groups attempting to organize engineers so that they can advocate for change. The change they want is some control over what they make and who it is used by. While at present the anti-union forces may be in some disarray there seems a divergence of interests between those such as the engineers whose basic working conditions are well enough looked after and those less-skilled on assembly line type jobs whose pay is low and working conditions are poor.

A recent article concludes: "If Tesla’s tactics are found to be illegal, and the company is punished, the burgeoning union movement in tech will be strengthened; if the company’s tactics are okayed, that’s a blow to unionization elsewhere. Tesla might be a car company, but it’s also a tech company — and if its workers can unionize, tech workers elsewhere are bound to start getting ideas. Likely, the pro-union Whole Foods workers are watching the Tesla trial closely." Whole Foods is owned by Amazon.

What could help unionization in the tech area is if skilled relatively well off workers showed solidarity with the demands of unskilled workers whom tech companies have yet to treat as valuable assets to be given reasonable salaries and improved working conditions as are the engineers.

Previously published in Digital Journal

Vancouver Canada cheap city to set up a tech firm

A report by Commercial Real Estate Research(CBRE) found that of 50 US and Canadian markets, Vancouver was the cheapest city to start up a new tech company.

CBRE has a full time staff of about 30 researchers spread across Canada. A typical tech company setting up in Vancouver would cost about $24 million a year US to cover both employee salaries and rent in Vancouver. In contrast the same company in the San Francisco Bay area, the most expensive area, would cost $67 million more than twice as much.

CBRE, Research Director, Colin Yasukochi said that the lower start up costs in Vancouver are due in part to the lower-priced Canadian dollar, but also more favourable immigration policies, and lower rental rates than many major US tech centers play a significant role. Yasukochi said: "I think there's a better supply demand balance in Canada with regard to the account workforce and the demand for it."

The average salary of a tech worker in Vancouver is $79,402 a year which is $34,000 to $44,000 less than they would receive for similar work in Seattle or San Francisco. However, some BC tech firms are aiming to lure workers to the province due to fears among workers in some foreign countries that Trump will impose strict visa restrictions on them. Allison Rutherford, Executive Director of HR Tech Group, that conducts a yearly salary survey of the BC tech industry said: "Yes our salaries are lower, so that's attracting big anchor companies to come here, because A we've got quality talent, and B, it's a reasonable place to set up shop."

However, Nils Anderson, a game designer in Vancouver said the lower Canadian wages might attract companies but they also drove senior workers to US sites where the pay was better creating a brain drain. Anderson said: "It's how markets work. The market pays what the market pays, and if nobody else in town is going to increase the wages ... then that's the offer you get here. As soon as you want to start a family here in Vancouver, it's like okay, can you do that on $30,000 to $40,000 a year less. When the cost of living here is basically the same as San Francisco, that's not really an option." Anderson also pointed out that Vancouver had not yet attracted big anchor tech companies such as Microsoft, or Ubisoft. He said if they set up shop in Vancouver wages would improve.

However, both Yasukochi and Rutherford said they expect the low wages in Vancouver not to last and that as Vancouver's tech sector grew, salaries would also. Yasukochi said: "I believe that as more and more companies discover the high quality of tech talent in Vancouver, then the relative value of the wages will start to go up."

The US is moving to tighten policies for H1-B visas for skilled foreign workers. However, Canada is waiting for a new streamlined process for worker permits to come into effect. As a result some BC tech companies are taking advantage of the fear created by US policies to recruit workers to come to the province. Igor Fatelski, CEO of Mobify a tech company producing apps for retailers says: "This uncertainty is really dialing down enthusiasm, especially for travel to the U.S. for long-term career moves. We're seeing that change slowly happen. We're seeing more and more interest from around the world from potential employees that want to work in Canada because they're not certain what's going to happen in the U.S." US President Donald Trump has recently announced that his government plans to suspend expedited applications for the H1-B visas. Fatelski said that more interest was being shown in coming to BC. Fatelski himself is an immigrant from Russia coming when he was 15. He now employs more than 100 people and will need more.

Navdeep Bains, Canada's Minister of Innovation said the government would act quickly to fast track work permits in order to attract highly skilled workers from other countries."We're taking the processing time, which takes months, and reducing it to two weeks for immigration processing for individuals [who] need to come here to help companies grow and scale up. So this is a big deal. It's a game changer." The change is to come through the Global Talent Stream a new program.