Faraday Future employees in China say they did not receive salaries

2 min read
Image Credit: FF

More than 60 Chinese employees of electric car maker Faraday Future say they have not received salaries this month and they are blaming their new boss Evergrande. Faraday Future (FF) staff in China had expected their salaries from August 20th to September 21st to be paid out on October 15th.

According to an FF employee quoted by Tencent News, on the evening of the 15th, some workers inquired about their salaries in an online chat group of 500 Chinese FF workers. Evergrande Faraday executives did not reply. Half an hour later the company employee group was disbanded.

Following the move, 60 FF employees formed their own group to discuss a collective application for labor arbitration.

Evergrande has responded that it has not stopped salary payments, saying that the 60 employees had not signed a revised labor contract with Evergrande Faraday and that the salary payment date had changed.

According to the report, Evergrande asked FF employees to carry out a second round of contract renewal (the first one was in May when Evergrande took over). However, the employees claim that the contract was not being renewed, it was being changed. Evergrande requested the employees to move to Guangdong, a province in southern China, and offered 50% of their original salary as wages and 50% based on performance.

In addition to deterioration of work conditions, equity rights may have been another point of dispute between Evergrande and the 60 employees.

The clash is not a good sign for FF and Evergrande who are currently in the midst of their own dispute. Founded by former LeEco boss Jia Yueting—who himself is embroiled in a number of legal controversies—FF secured a major investment from the healthcare division of Chinese real estate group Evergrande at the end of 2017 that saved the company from the brink of disaster. In June, Evergrande announced it would buy Season Smart which owns 45% of FF agreeing to spend a total of $2 billion.

Last week, however, Reuters reported that FF is seeking arbitration to terminate a deal to sell a 45 percent stake to China’s Evergrande Health Industry Group. The arbitration in Hong Kong was initiated by Jia who claims that payment obligations from Evergrande were not fulfilled.

Evergrande has accused FF of trying to scrap the original stake sale deal after spending the initial investment of $800 million.

FF shifted its headquarters to China in August under the name of Evergrande FF Intelligent Automotive China and named a new chairman—Peng Jianjun, vice chairman of Evergrande Health and vice president of Evergrande High-Tech Group.

FF’s China workers are not the only ones claiming to be waiting for payments from the company. According to reports, some FF’s suppliers and vendors have not been paid during August since Jia Yueting already spent Evergrande’s money.

This month FF lost two US staffers in one week: Tom Wessner, the senior vice president of FF’s global supply chain, and Pontus Fonateus, the principal of interior design and brand.