Elon Musk's cautionary message to UAW about potential bankruptcy for Ford, GM, and Stellantis

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【Summary】Elon Musk warns that the United Auto Workers' (UAW) demands for a 40% pay raise and a 32-hour workweek could lead to bankruptcy for GM, Ford, and Chrysler. This comes after President Biden endorsed the UAW protest. Tesla and other electric vehicle manufacturers, who use non-union labor, have compensation structures that have made many workers millionaires. The UAW has previously tried to organize workers at Tesla but failed to gain traction.

FutureCar Staff Sep 28, 2023 9:17 AM PT

Elon Musk's cautionary message to UAW about potential bankruptcy for Ford, GM, and Stellantis

Tesla CEO Elon Musk has issued a warning about the demands of the United Auto Workers (UAW) against the Detroit Big Three automakers. According to Musk, the union's demands could potentially drive GM, Ford, and Chrysler into bankruptcy.

Musk's criticism comes after President Joe Biden expressed his support for the UAW protest. During a visit to a picket line outside a GM Redistribution Center, Biden stated that he believed in the UAW's cause and that the workers deserved a significant raise and other benefits.

The UAW has reportedly adjusted its demands from an initial 40% pay raise down to 36%. Musk, in a post on X, expressed his concern that the union's demands could compromise the very companies that the workers are employed by. He specifically highlighted the request for a 40% pay raise and a 32-hour workweek as a sure way to push GM, Ford, and Chrysler into bankruptcy.

Elon Musk's sentiments are shared by others in the industry. Patrick Kaser, a portfolio manager at Brandywine Global, warned that if the UAW were to get everything they are asking for, it would significantly damage the competitiveness of the Big Three automakers.

Tesla and other pure electric vehicle manufacturers like Lucid and Rivian typically rely on non-union labor and have compensation structures that include restricted stock units and employee stock purchase plans. Musk has previously stated that Tesla's compensation structure has made many of its workers millionaires.

Relations between Tesla and the UAW have not always been smooth. The UAW attempted to organize workers at Tesla's Fremont, California plant in 2017, but their efforts did not gain enough traction for a unionization vote. Musk invited the UAW to hold a union vote at the Fremont Factory in 2022, but it appears that no such event took place.

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Source: "Elon Musk warns UAW demands could bankrupt Ford, GM, Stellantis"