UAW demands endanger Ford, GM, Stellantis

author: FutureCar Staff    

Tesla CEO Elon Musk has issued a warning about the demands made by the United Auto Workers (UAW) against the Detroit Big Three automakers. According to Musk, if the union's demands are met, it could lead GM, Ford, and Chrysler down the path of bankruptcy.

Musk's criticism came 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 stood with the UAW and believed they deserved a significant raise and other benefits.

The UAW has reportedly adjusted its demands from an initial 40% pay raise to 36%. Musk, on the other hand, expressed concern that these demands could jeopardize the very companies that the union members work for. He took to X to voice his opinion, stating that a 40% pay raise and a 32-hour workweek would be a surefire way to drive GM, Ford, and Chrysler into bankruptcy.

Elon Musk's sentiments are not unique. Patrick Kaser, a portfolio manager at Brandywine Global, warned that if the Detroit Big Three give in to the union's pressure and grant all their demands, it could significantly damage their competitiveness.

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 highlighted that Tesla's compensation structure has made many of its workers millionaires.

Relations between Tesla and the UAW have been strained in the past. The UAW attempted to organize workers at Tesla's Fremont, California plant in 2017, but their efforts did not gain enough support for a unionization vote. Musk extended an invitation to 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: TeslaRati

FutureCar Staff