Electric car maker Tesla Fires Hundreds of Workers

Electric car maker Tesla Fires Hundreds of Workers

FILE PHOTO: First production model of Tesla Model 3 out the assembly line in Fremont, California , U.S. is seen in this undated handout photo from Tesla Motors obtained by Reuters July 10, 2017. Tesla Motors/Handout via REUTERS

DETROIT — The electric-car maker Tesla fired hundreds of workers this week after a series of performance reviews conducted during the biggest expansion in the company’s history.

Tesla said Friday that the dismissals were not out of the ordinary, even though they came as the automaker tries to increase the production of its first mass-market vehicle, the Model 3 sedan.

The company has been criticized for the slow pace of its early production of the new model, which has generated hundreds of thousands of deposits from prospective buyers.

Tesla built about 25,000 vehicles in the three months that ended Sept. 30, but only 260 of those were Model 3s — considerably fewer than the 1,500 it had projected. The automaker has attributed the low production rate of the new car to unexpected bottlenecks in its manufacturing system.

Tesla’s chief executive, Elon Musk, has set aggressive targets for the expansion of its plant in Fremont, Calif., including increasing annual production volume to 500,000 vehicles from 100,000.

 But the firings, which were first reported by The Mercury News, of San Jose, Calif., could indicate that personnel problems have contributed to the early troubles in manufacturing the Model 3.

Tesla said in a statement that it regularly conducts annual performance reviews that often result in promotions or bonuses, as well as dismissals.

“As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” the company said. “Tesla is continuing to grow and hire new employees around the world.”

Although Tesla confirmed the dismissals, it did not reveal the exact number of employees who were fired after the reviews.

The introduction of the Model 3 is considered a critical turning point in Tesla’s long-term growth plans. Although the company has steadily built a market for its Model S luxury sedan and Model X sport utility vehicle, the Model 3 is expected to broaden its sales considerably.

With a sticker price starting about $35,000, the new car is designed to compete with many mainstream, gasoline-powered sedans, as well as electric vehicles produced by much larger automakers such as General Motors and Nissan.

A Tesla representative said that the recent dismissals would not have an effect on Model 3 production, and that a “vast majority” of the vacant positions would be filled with new hires.

The overall attrition rate of employees will be about the same as last year, the company said.

Mr. Musk has described the introduction of the Model 3 as “production hell.” But Tesla said in its recent third-quarter production report that it was capable of resolving the issues that had stalled the Model 3. “We understand what needs to be fixed,” the company said.

By Bill Vlasic