Tesla staff, citing Elon Musk's fear of 'PR hit,' resisted investigation into thefts at Gigafactory

Benjamin Spillman | Reno Gazette-Journal

Show Caption Hide Caption Nevada Gigafactory: A tour inside Tesla's giant facility outside Reno Tesla has allowed tours of Nevada's Gigafactory 1 in the past to media and officials, but a comprehensive safety inspection still has not occurred.

Deputies from the Storey County Sheriff’s Department ran into an unexpected problem last year while investigating a report of stolen copper at Tesla’s Nevada Gigafactory.

Security workers refused to cooperate with the investigation because they feared the wrath of Elon Musk, Tesla’s CEO.

That’s according to a Sheriff’s Department report from June 12, 2018, that stated workers' refusal to provide information to deputies was because Musk feared bad publicity.

The report appears to corroborate statements from at least three former workers who allege officials at the highest ranks of the company are indifferent, or even hostile, toward efforts to prevent problems at the Gigafactory if there's a chance it could result in bad publicity for the company.

The report, filed by Deputy Brandon Azevedo, states that Tesla security wouldn’t share information about a subject in the investigation into a report of stolen copper wire.

“ … we were advised that this incident had reached Elon Musk himself,” Azevedo wrote. “In fear of the ‘PR hit’ this incident could make, Tesla advised that they will not release any hard copies,” of information on the subject.

The report also confirms that Tesla security knew electrical contractor and witness Lynn Thompson had been fired after reporting the theft to authorities.

Although the report stated Thompson had been fired, it said one of the subjects of the investigation into the theft was still employed at the Gigafactory.

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Azevedo’s report isn’t the only time authorities reported widespread theft at the Gigafactory and resistance to help by company officials.

“Those are the types of things that would make things very difficult for us to investigate,” Storey County Sheriff Gerald Antinoro told the RGJ. “We can’t investigate something on their property if they are not willing to cooperate with us.”

Antinoro said levels of cooperation have improved since the beginning of 2019.

Tesla did not respond to three requests from the RGJ for comment about the issue.

Documents detail reports of crime at Gigafactory

Documents indicate that in 2018, there were reports of rampant crime at the Gigafactory and people trying to solve the problem weren’t getting much help from Tesla.

A report dated July 12, 2018, documents another sheriff’s investigation and indicated Tesla was doing little to prevent theft.

The report by Deputy Christopher Hamblin was part of an investigation that led to the arrest of a father and son for felony theft.

According to the report, the contractor who reported the theft said he told Tesla about “large amounts” of missing copper wire.

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The contractor said the copper was disappearing as fast as the company could order it and estimated in the prior two months, wire worth more than $150,000 had gone missing.

Despite the severity of the problem, the electrical contractor told the deputy Tesla wouldn’t allow the company to lock the area where the wire was stored.

“He said he was finding brand new spools empty before (the company) even used any of the wire,” the report states.

Reports corroborate legal allegations against Elon Musk, Tesla

Deputies’ description of lax security and hostility toward people who identify problems at the Gigafactory echo legal complaints from at least three former workers.

Thompson, former security worker Karl Hansen and former factory worker Martin Tripp are suing Musk and Tesla. Thompson's suit is in District Court in Washoe County; Hansen's is in federal court. Hansen also filed a complaint with the Securities and Exchange Commission. Tesla denies Hansen's claim in an answer to his complaint.

Washoe County court records indicate Tesla hasn't yet responded to Thompson's complaint.

Tripp also alleged Musk orchestrated efforts to discredit him after he reported what he believed to be unsafe and shoddy manufacturing at the factory. Tripp's allegations are part of a counterclaim in a suit against him by Tesla, which denies Tripp's allegations and is suing him for leaking company information to the press.

Hansen said the sheriff's reports, which the RGJ obtained through a public records request, reflect the atmosphere of chaos and fear he said permeated the Gigafactory during his tenure.

"It was a circus, it was constant chaos," said Hansen, whose job involved investigating reports of wrongdoing, such as theft. "You had employees scared to speak up."

Thompson’s complaint alleges he was fired for reporting theft at the factory that produces batteries and drive trains for Tesla vehicles.

During his time at the Gigafactory, Thompson suspected theft of copper wire worth millions of dollars, according to his complaint.

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The complaint also states Thompson emailed Musk directly about the overall problem.

“I’ve never seen such blatant theft,” Thompson said during an October interview with the Reno Gazette Journal.

Hansen’s allegations, in the form of a lawsuit and a complaint filed with the Securities and Exchange Commission, are similar but more wide ranging than Thompson's.

In the SEC complaint, Hansen claims Tesla should have disclosed to investors evidence of theft, widespread spying on employees and organized illegal drug activity.

Tripp's counterclaim alleges Musk targeted him with defamatory statements after he reported waste and shoddy product production at the Gigafactory.

The counterclaim described an environment in which workers avoided reporting problems because they feared reprisal from Musk.

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Tripp's counterclaims also describe how after reporting problems internally and to news outlets, rather than address the substance of the problems Musk sent an email to Tesla employees claiming the company had been the victim of sabotage.

Hansen's former supervisor, Sean Gouthro, also filed a whistleblower complaint about Tesla with the SEC.

Benjamin Spillman covers the outdoors and environment in Northern Nevada, from backcountry skiing in the Sierra to the latest from Lake Tahoe's ecosystem. Support his work by subscribing to RGJ.com right here.