Buffalo, N.Y. (WBEN) - A number of local community advocates gathered outside the Tesla Gigafactory in South Buffalo on Monday, calling for New York State to explore new and better business opportunities for the site, and to not agree to a new lease agreement with the company.
The state is considering extending the lease on the Tesla property that the state owns along South Park Avenue from 2029 to 2034. Advocates strongly feel this deal was corrupt and wasteful from its very inception, and it's only gotten worse over time.
"The State of New York has a choice in terms of who it's going to do business with, who it's going to partner with. Who it's going to give public money to or subsidies to. Is Tesla really the best choice, given where the company is at right now, and given its track record here at this site? The targets it's missed, the mass layoffs that have occurred here, the complaints of racial harassment and sexual harassment, and union busting from workers who have worked here. And the increasingly bleak prospects that Tesla as a business faces," said Sam Magavern, senior policy follow at Partnership for the Public Good.
"The state should make a fresh start, and should issue requests for proposals for this site and see if somebody can do better with it. Can somebody produce more jobs? More high quality jobs with less harm to the environment and less harm to the community? Is there a more reliable partner?"
Advocates are calling for a new RFP (request for proposal) from the state, and feel it should have much stricter and better requirements that ensure this public investment actually serves the public good. Any new RFP for the site should include protections for workers, protections for the environment, and meaningful community benefits.
"This is a company that is sliding downhill, facing enormous headwinds and challenges, and there's a real question of whether New York State should be thinking about extending this lease in a context where this company might not have a long-term viable future, and might not create a long-term viable future for this site in Buffalo," said Kevin Connor, consultant and former executive director of the Public Accountability Initiative. "One of the major things we've been seeing is political activities have generated enormous backlash. Sales have been sliding, earnings have been sliding, the stock price has been sliding. Car buyers around the world don't want to be associated with this brand, and are rejecting it, due in part, to Musk's activities, but also due to safety issues with the cars."
With the new proposed agreement between the state and Tesla, it would increase Tesla's rent, as well as increase the job target for the Buffalo facility.
"It actually lowers the statewide job targets all the way down to 3,000. They were at 3,640 most recently, so they're going down another 640. The job target for the Buffalo operation goes up a little, but that's in the context of, actually, fewer jobs overall, so it's not really a victory for the state by any means," Magavern noted. "It appears to reduce the penalties if Tesla fails to meet the job targets from a maximum of $42 million to a maximum of $10 million. And, most importantly, it doesn't address these fundamental problems that we're talking about dealing with a very flawed company with very uncertain prospects, with a terrible track record of how it treats workers and how it treats the environment."
Advocates feel the facility has already shown its adaptability, and is arguing for a fair, free, open competition to see who may be the best user of the site. So what should the RFP look like?
"It should look much better than the deal we've been getting," Magavern said. "It should have higher job targets. It should have protections for job quality, making sure the wages pay families sustaining wages. It should protect workers from discrimination and harassment. It should protect workers' right to organize, and the simplest way to do that is Card Check Neutrality - in other words, if a majority of workers sign cards saying they want a union, then a union gets recognized. It's very simple, it's very democratic, and it prevents the kind of union busting techniques that we've been seeing. It should protect local municipalities. There should be payments in lieu of taxes, or PILOTs, to our local municipalities to make them whole for the property tax they're losing. And it should have environmental protection so we're not actually making climate change worse, not making our air quality in this neighborhood and this region worse, not making our water and soil quality worse."
In addition, advocates are calling for New York to begin a comprehensive audit to make sure Tesla has abided by the terms of the original agreements and all applicable laws, and, if it finds violations, move promptly to enforce its rights.
State Assemblyman Pat Burke is one local lawmaker in favor of this push from advocates, saying it was clear that the deal between New York State and Tesla was a bad one from the very beginning.
"It doesn't matter, really, what the company was, it's a bad deal. But it does matter because Tesla is so compromised. Tesla and Elon Musk are not separated in any way. One is equal to the other," said Burke on Monday. "The value of Tesla is purely speculative. We view Tesla mostly, we know it's not, but mostly as a car company. When you compare the valuation, price to earnings ratio, of Tesla to other car companies, say Ford, for every dollar that Ford earns, it's about $16 in its valuation ratio. Tesla, for every $1, it's about $180, which means it's purely speculative. They're not producing anything, they're not earning anything to get that type of value for their company. So why the hell would New York State, when everyone else is running away from Tesla, when its investors are running away, everyone is fleeing Tesla, New York State is going to go even further in on a sweetheart deal. It doesn't make any sense. We can't do it."
That's why he strongly feels the state needs to open up this process and find another suitable business partner.
"We should open it up for everyone, but particularly in this case, we have to open it up because we have a company in such question," Burke said. "Unfortunately, Elon Musk has saturated himself in every part of our lives. He started a political party, he has upset the electoral process, he has upset the governing process. We cannot, in New York State, be further investing in Elon Musk and in Tesla."