Elon Musk's cautionary note to UAW on potential bankruptcy of major automakers

author: FutureCar Staff    

Tesla CEO Elon Musk has issued a warning regarding the United Auto Workers' (UAW) demands against the Detroit Big Three. According to Musk, these demands could potentially drive GM, Ford, and Chrysler into bankruptcy. His 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, where he stated that the workers deserve a significant raise and other benefits.

The UAW initially demanded a 40% pay raise, but has since adjusted it to 36%. Musk, however, pointed out that these demands could compromise the very companies the union members work for. In a post on X, Musk emphasized that a 40% pay raise and a 32-hour workweek would be a sure way to drive GM, Ford, and Chrysler into bankruptcy. His sentiments are shared by Patrick Kaser, a portfolio manager at Brandywine Global, who warned that if the UAW gets everything they are asking for, it would clearly damage the competitiveness of the Big Three companies.

Tesla and other pure electric vehicle manufacturers like Lucid and Rivian rely on non-union labor and have compensation structures that include restricted stock units and employee stock purchase plans. Musk has previously highlighted that Tesla's compensation structure has made many of its workers millionaires. The relationship between Tesla and the UAW has been contentious, with the UAW attempting to organize workers at Tesla's Fremont, California plant in 2017, but failing to gain traction for a unionization vote. Musk even invited the UAW to hold a union vote at the Fremont Factory in 2022, although it seems that no such event took place.

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Original article: Elon Musk warns UAW demands could bankrupt Ford, GM, Stellantis

FutureCar Staff