Finance & MarketsWhat hinders Elon Musk's ambitious plans for Tesla gigafactory in Germany?

What hinders Elon Musk’s ambitious plans for Tesla gigafactory in Germany?

All Polish workers don't know German language.

Elon Musk called the factory of Tesla electric car near Berlin “gigafactory”, and his plans for it were grandiose but very quickly met reality. First with the German bureaucracy, and later with the Polish workers, or rather the lack of them.

The Tesla plant near the German capital was supposed to be the starting point for the electric car manufacturer’s major European expansion. The plan was to produce 500,000 vehicles a year, but since its opening in March, only 10 per cent of the originally planned volumes have been realized, notes the Polish edition of “Business Insider”.

In addition, many of the cars produced end up in repair shops – it turns out that they have a factory defect. As a result, as first reported in “Bild”, the plant closed its doors for two weeks in July – barely three months after it started operations – to refine production processes.

This is a big blow to the image of Elon Musk, who is considered one of the most talented and successful entrepreneurs in the world. The gigafactory near Berlin, which was high on the scale of his priorities, has become a source of headache for the multibillionaire, writes “Business Insider”.

What didn’t go right? At first glance, it is not difficult to understand why Musk chose Germany as the location of his European factory. It’s the heart of the global automotive industry, but why exactly the suburbs of Berlin? The answer to this question is a little more difficult. After all, the big German companies don’t have factories in this part of the country. Only BMW makes an exception, but only motorcycles of this brand are produced in Berlin.

If Musk wanted to “bribe” workers at the German auto giants to work for him, he should have built his gigafactory in other parts of Germany, according to Business Insider. For example, in Stuttgart, where the headquarters of “Mercedes” and “Porsche” is located. Moreover, such a “bribery” would also be a problem since Musk is paid less compared to the German car giants. One of the largest trade unions in the country, IG Metall, emphasized that what the workers in the Tesla gigafactory receive are about 20 per cent less than in the factories of the big German concerns.

The question arises as to why Musk has built a large plant far from the places where can he hire people and why are the salaries he offers lower than the competition? At first glance, it doesn’t make much sense, but if we look more closely at the map of the region, the billionaire’s decision may make sense, notes “Business Insider”. Grünheide is about an hour’s drive from the border with Poland, making the facility quicker to reach than some parts of the Berlin agglomeration. There are Polish cities like Szczecin and Gozów Wielkopolski whose residents can quickly commute to Tesla’s gigafactory by commuting every day without having to move to Germany. In addition, the remuneration at the Tesla plant is attractive to Poles, as they cannot count on similar wages in their homeland. There are many Poles working in Grünheide, and their number is increasing month by month.

However, Musk can’t fill the jobs. He wants to hire about 9,000 people, but so far, there are only 4,500. The Polish edition of “Business Insider” spoke to some workers at the factory, as well as people employed by companies that supply labour to “Tesla”. They usually speak highly of their work and remuneration. However, not everyone wants to talk about their salaries – their contracts oblige them not to divulge the details.

However, it is said that those working in production can receive a monthly salary of 4,500 euros gross. From a Polish perspective, this is a lot of money, but the workers are required to speak German. But not many Poles, including those working in production, have such a good command of the language, and this undoubtedly hinders the recruitment process.

The American company was forced to change the language proficiency requirements for those wishing to work in the gigafactory. Thus, Tesla once again incurred the wrath of German trade unions and civil servants, with whom Musk already has quite a few clashes. For example, the factory had to wait a long time for the relevant permits to start the plant. And accordingly, Musk is already aware that it is not an easy task to deal with the German bureaucracy, and perhaps it is preferable to encourage the Poles to learn German.

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