Tesla Fined for Safety Violations - Analyst Blog

Tesla Motors, Inc. TSLA has been charged with an $89,000 fine for seven safety violations with regards to one workplace incident that injured three workers. The fine has been levied by the California Division of Occupational Safety and Health.

In Nov 2013, Tesla reported an incident of hot metal spill at its Fremont factory.  Failure of an aluminum casting press led to the accident, spilling hot metal on workers and injuring three of them.

The employees were admitted to the Santa Clara Valley Medical Center in San Jose with second and third-degree burns. While one was badly injured with hand, stomach, hip, lower back and ankle burns, the other two suffered minor injuries.

However, there was no report of fire in the plant. The factory was formerly jointly-owned by General Motors Co. GM and Toyota Motor Corp. TM.  It was taken over by Tesla four years ago and was transformed into a state-of-the-art production facility.

Lack of safe operating condition of the low-pressure die casting machine caused the mishap. The safety interlock was broken when the machine was being operated, leading to the hazardous situation. Lack of proper training about the perils of the operations and the absence of adequate face and eye protection aggravated the situation.

Tesla will be appealing against the fine. To its defense, the automaker said that it gives safety utmost importance and will focus on ensuring that such a disastrous incident doesn't recur. The company also terminated the operations of the low-pressure die casting machine and decommissioned the equipment. The company also compensated the injured workers.

Tesla currently carries a Zacks Rank #5 (Strong Sell). PACCAR Inc. PCAR with a Zacks Rank #2 (Buy) is a better-ranked stock worth reckoning in the same industry.