Tesla CEO Elon Musk shared a warning about the United Auto Workers’ (UAW) demands against the Detroit Big Three. As per Musk, the union’s demands would push GM, Ford, and Chrysler into the fast lane toward bankruptcy.
Musk’s criticism followed President Joe Biden’s endorsement of the UAW protest. The US President visited a picket line outside a GM Redistribution Center on Tuesday, where he stated that he supported the UAW’s cause. “You deserve a significant raise and other benefits,” Biden said.
As noted in a Bloomberg News report, the UAW has adjusted its demands from an initial 40% pay raise down to 36%. Elon Musk, for his part, noted in a post on X that the union’s demands could compromise the very companies that they work for today. “They want a 40% pay raise *and* a 32 hour workweek. Sure way to drive GM, Ford, and Chrysler bankrupt in the fast lane,” Musk wrote.
They want a 40% pay raise *and* a 32 hour workweek. Sure way to drive GM, Ford and Chrysler bankrupt in the fast lane.— Elon Musk (@elonmusk) September 26, 2023
Musk is not alone in his sentiments. Patrick Kaser, a portfolio manager at Brandywine Global, stated last week that the Detroit Big Three could damage their competitiveness if they succumb to the union’s pressure. “If the UAW gets everything they are asking for, it will very clearly damage the competitiveness of the Big Three companies materially,” Kaser said.
Tesla and fellow pure electric vehicle manufacturers like Lucid and Rivian utilize non-union labor. Thus, their compensation structures typically rely on restricted stock units and employee stock purchase plans. Musk has noted in the past that Tesla, thanks to its compensation structure, has made many of its workers millionaires.
Tesla and the UAW have not necessarily seen eye to eye. The UAW made efforts to organize workers at Tesla’s Fremont, California plant in 2017, though their efforts failed to gain traction for a unionization vote. Musk invited the UAW to hold a union vote at the Fremont Factory in 2022, though no such event appears to have happened.
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