Construction workers at Tesla site walk off the job in protest

CARSON CITY — Some construction workers at Tesla’s massive battery factory east of Reno walked off the job Monday, claiming a contractor has been bringing in lower-paid workers from out of state.

Todd Koch, president of the Building and Construction Trades Council of Northern Nevada, said the protest is against Brycon Corp., a New Mexico-based company hired by Tesla.

“They’ve been giving Brycon more and more of the work, and Nevada’s construction workers finally said, ‘We’ve had enough,’” Koch told the Review-Journal.

“We know they’re working for Brycon, and driving around the job site we see a lot of license plates from Arizona and New Mexico,” he said.

An estimated 300 workers set up a picket line around dawn on Electric Avenue, a four-lane divided road that leads to the gated Tesla site, Koch said. The demonstrators had disbanded by midday. It was unknown whether they would return to work Tuesday or continue their walkout.

Phil Casaus, chief financial officer for Brycon, said the company is under a nondisclosure agreement with Tesla and could not comment on its work at the factory.

Tesla characterized the discourse as a struggle between union versus nonunion contractors.

“Today’s activity stems from the local Carpenters Union protesting against one of the third party construction contractors that Tesla is using at the gigafactory,” a Tesla spokesperson said in a statement. “Their issue is that of the many third party contractors that are involved in the construction of the gigafactory, many are union but the one at issue is not.

“The union is also claiming that this contractor is somehow favoring out of state workers. In reality, more than 50 percent of the workers used by this contractor and more than 75 percent of the entire gigafactory workforce are Nevada residents, demonstrating the project’s strong commitment to Nevada,” Tesla said.

Nevada lawmakers in September 2014 approved $1.3 billion in tax incentives to lure the massive battery factory to the Tahoe-Reno Industrial Center east of Reno. The $5 billion, 10 million-square-foot factory is a joint project of Tesla Motors and Panasonic Corp.

As part of the deal to get the tax breaks, at least half of construction and permanent workers are required to be Nevada residents, though there is a provision in the law that allows outside workers to be used if enough skilled labor isn’t available. Tesla must also invest $3.5 billion in the state.

“Nevada’s tax dollars should be used to provide jobs for Nevada construction workers — not New Mexico construction workers,” Koch said. He said Monday’s walkout involved both union and nonunion tradesmen.

Casaus said Brycon is in full compliance with the worker requirement. He added wages are “fair for all trades at all levels” and the company offers a “robust” benefits package.

“Certainly we’re looking forward to a long-standing relationship with Tesla and getting involved with the local community,” Casaus said.

But Koch said Nevada workers are being displaced by those coming from out of state.

Koch said building trade representatives worked well with project contractors in the beginning.

“The job started out going very well that way,” Koch said. “Since then the construction workers on the project have seen more and more of the work going from the contractors we had successfully been working with to Brycon.”

“We have workers that are ready to go to work out there,” he added. “Hundreds of construction workers of all trades.”

Gov. Brian Sandoval and the Governor’s Office of Economic Development, which brokered the deal to lure the battery factory to Nevada, said Tesla, led by billionaire entrepreneur Elon Musk, has so far been in compliance with the hiring requirements.

“Tesla is required, both by law and by contract, to employ a minimum of 50 percent Nevadans on the site of the gigafactory. This requirement applies separately to both the construction process and permanent factory worker,” GOED Executive Director Steve Hill said in a statement.

An outside annual audit released in December 2015 determined that 68 percent of construction workers on the project were Nevadans. The economic development office said Tesla reported Nevadans comprised 74 percent of construction workers during the fourth quarter of 2015.

“Tesla has exceeded, and continues to exceed, the requirement to hire Nevadans,” Hill said.

The 50 percent Nevada hiring mandate also pertains to a deal state lawmakers approved in December with Faraday Future. That company, backed by Chinese billionaire Jia Yueting, said it will build a $1 billion electric car manufacturing plant at the Apex industrial site in North Las Vegas.

Legislators approved $215 million in tax abatements and incentives to attract the company, seen by many Nevada officials as a catalyst to bringing in other large industrial development to the Southern Nevada region.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-461-3821. Find her on Twitter: @SandraChereb