BUFFALO, N.Y. — In documents obtained by 2 On Your Side through a Freedom of Information law request, officials with New York State are concerned that Tesla will not be able to meet revised job goals.
Back in January, Empire State Development/NYCreates agreed on a revised agreement through a letter of intent drafted by the Tesla.
The letter of intent (LOI) outlines several job goals, supercomputing goals, workforce development commitments, and adjustments to the terms of the arrangement.
Starting in January 2025, Tesla proposed an annual commitment of 1,800 jobs in Buffalo. The current requirement is 1,460.
According to the documents, as of May, the Buffalo Gigafactory workforce numbers were roughly 1,684.
What's the penalty if the company doesn't hit that goal? Approximately $41 million in potential fines from New York State.
Empire State Development COO Kevin Younis says there are additional provisions to the new agreement that benefit the state.
"Over the next nine to 10 years of this agreement, $37 million in rent," Younis said. "The workforce partnerships we've entered into with them, which will start off at around $500,000 a year, each of us doing $250,000, and then it will increase in the next five years."
The letter of intent was signed and acknowledged by NYS officials in January, but there doesn't appear to be a final agreement in place. The terms of the LOI are non-binding as of right now.
In May, Tesla announced company-wide layoffs, which impacted the Buffalo Gigafactory.
After that announcement, ESD President Hope Knight wrote a letter to Tesla asking for a status update and expressed concerns about future job goals at the Buffalo factory.
"The recent layoffs and reports raise concerns about Tesla's plans in Buffalo and New York State," Knight wrote on May 13.
According to a response from Tesla on May 29, 345 workers in Buffalo were laid off or will be laid off by August 11.
Then on July 25, Knight warned Tesla that if job goals aren't met, the state won't move forward with the revised agreement.
Knight's response said in part:
"In light of the significant change in circumstances since the execution of the LOI, namely, the recent layoffs that have actually reduced Tesla's workforce and the apparent fact that at this point, Tesla will be unable to meet the employment targets referenced in the LOI, ESD will not move forward with the project revisions outlined in the LOI."
State Senator Sean Ryan has been historically critical of the original Tesla deal that NYS made, namely the lack of claw-back provisions and weak penalties.
Ryan said he's optimistic this new agreement gives the state some real authority over Tesla.
"They always had more of a wiggle room in job numbers," Ryan said. "We're taking that wiggle room out and the Buffalo job numbers are a hard 1,800. If you don't meet it, you pay the penalty."
Ryan is hopeful that an expanded deal, committing Tesla to Buffalo until 2034, will finally spur development in that part of Buffalo.
"We all know that Tesla didn't hit Governor Cuomo's early promises," Ryan said. "The promise of building a steel plant like employer in western New York that would then have 1,000s of other people working on the supply side, that deals, that deal is not panning out. So far, all we've got is Tim Hortons across the street."
Tesla also recently opened a maintenance shop for Tesla vehicles across the street from the Gigafactory.