Tesla Motors CEO Elon Musk has weighed in on the ongoing contract negotiations between the UAW labor union and the Big Three Detroit automakers (GM, Ford, Stellantis), saying that the union’s demands would effectively bankrupt the companies. UAW members are currently striking at facilities for all three of the Detroit makes in a targeted strike strategy. Tesla workers are currently not unionized.
As reported by Bloomberg, Musk criticized the UAW’s initial demands in a post to X, formerly Twitter:
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
The UAW has reportedly lowered its demands for a pay increase from 40 percent to 36 percent. GM has proposed a pay increase of 20 percent, which the UAW has rejected. Among the UAW’s concerns are that the broader auto industry’s shift to electric vehicles will result in fewer jobs and reduced wages, as EVs typically require fewer components to produce than equivalent ICE vehicles.
Per Bloomberg, Tesla, as well as other all-electric vehicle companies like Rivian and Lucid, are currently not unionized. Rather, these companies typically offer restricted stock units and employee stock purchase plans as a significant portion of employee compensation.
The UAW attempted to organize Tesla workers at Tesla’s plant in Fremont, California in 2017, but failed to get a vote. The U.S. labor board ruled in 2021 that Tesla repeatedly violated federal law at the Fremont facility, with accusations of “coercively interrogating” union supporters and firing an employee for union activism. Tesla is currently appealing the ruling. The Workers United union has also accused Tesla of firing dozens of workers at the company’s plant in Buffalo, New York in retaliation for participating in a union campaign.
GM President Mark Reuss has also addressed the UAW’s demands, saying last week that “if we don’t continue to invest, we will lose ground – quickly. Our competitors across the country and around the world, most of whom are non-union, will waste no time seizing the opportunity we would be handing them.”
The UAW is currently striking at all three of the Big Detroit automakers, a first for the union. The UAW is employing a targeted strike strategy wherein workers at select facilities are called on to strike, rather than every UAW member at every facility all at once. The strategy is believed to provide UAW negotiators with greater flexibility. It’s estimated that roughly 18,300 UAW members are currently on strike, or roughly 12 percent of UAW membership.