Bloomberg News

Tesla Doesn’t Expect Model S Delays After Plant Workers Hurt (2)

November 14, 2013

Tesla Motors Inc. (TSLA:US), the electric-car maker led by Elon Musk, said it doesn’t expect production delays of its Model S sedan after three workers were injured at its only assembly plant.

The employees were injured yesterday by hot metal resulting from “a failure in a low pressure aluminum casting press,” at the Fremont, California, factory, Tesla said previously. They suffered moderate to serious burns, Fremont Fire Department Captain Daniel Cardenas said in an e-mail yesterday. There was no fire or explosion at the factory, he said.

“Obviously, our primary concern is the health and safety of our employees,” Jeff Evanson, a company spokesman, said today by telephone. “We do not expect any production delays.”

Production delays at Fremont would have made it more difficult to achieve the company’s forecast for this quarter of a profit “about consistent” with third-quarter levels. The electric-car maker delivered 5,500 Model S cars last quarter and last week said it plans to deliver “slightly under 6,000” during the current quarter. It also has a full-year target of 21,500 cars. Tesla’s third-quarter earnings, excluding some items, totaled 12 cents a share. The quarterly net loss was $38.5 million.

Tesla, with the biggest share price gain among automakers this year, has endured setbacks since closing at a record $193.37 on Sept. 30. Those include three Model S fires as well as the third-quarter deliveries, which were lower than some analysts had estimated.

No Recall

The carmaker’s stock fell 0.8 percent to $137.60 at the close in New York. The shares of the Palo Alto, California-based company have advanced more than fourfold this year.

Chief Executive Officer Musk said this week at the DealBook conference in New York that “there’s definitely not going to be a recall” of the Model S.

U.S. regulators haven’t ordered a recall and David Strickland, head of the National Highway Traffic Safety Administration, today declined to say when or if there would be an investigation.

“There’s only two fires in the U.S.,” Strickland said in a call with reporters. “We’re still in data-collection mode.”

Inspectors from California’s Division of Occupational Safety and Health visited the Fremont plant to review the accident, said Peter Melton, a spokesman for the agency, in a phone interview yesterday. The workers had second-degree burns and were sent to Santa Clara Valley Medical Center in San Jose, California, for treatment, he said.

CEO’s Visit

Musk visited the injured Tesla employees yesterday, according to a report on KNTV in San Jose.

“There does seem to be, I think honestly, a bit too much attention paid to Tesla, good and bad,” Musk said in the report.

Tesla is investigating a Nov. 6 fire involving a Model S near Murfreesboro, Tennessee, the third accident to result in a blaze in about five weeks. The fire occurred after the car hit a metal tow hitch that had fallen onto Interstate 24, the Tennessee Highway Patrol said.

The factory where the industrial accident occurred is located across San Francisco Bay from Tesla’s headquarters in Palo Alto and is the sole production site for the Model S.

The company bought the 50-year-old plant in 2010, after it had been a joint venture between Toyota Motor Corp. (7203) and the predecessor of General Motors Co. for a quarter century.

The deal that kept the only large auto plant on the U.S. West Coast in operation was arranged by Toyota President Akio Toyoda, who worked at it in the 1980s. Toyota also bought a stake (TSLA:US) in Tesla following the factory sale.

The plant opened in the early 1960s in its first incarnation as GM’s Fremont Assembly facility. It closed in 1982 before reopening in 1984, rechristened New United Motor Manufacturing Inc.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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