Continuing industrial action may torpedo greater electric automobile production by the Big Three automaker giants.
Treasury Secretary Janet Yellen said she hopes the United Auto Workers (UAW) union and the Big Three automakers can establish a win-win agreement that can benefit both sides.
But as the strike enters its fifth day, and with the possibility of a prolonged labor dispute, there might be one winner: Tesla Motors billionaire CEO Elon Musk.
The Detroit Three—Ford, General Motors, and Stellantis—have been aiming to challenge Musk and eat into his share of the electric vehicle marketplace.
President Joe Biden and his administration’s green-energy push have also been issuing new emissions rules and showering the private sector with lavish subsidies to encourage greater electric automobile production.
But the UAW’s work stoppage could throw a wrench into these efforts and possibly force the automaker giants to continue to lag behind Tesla, which is the only major U.S. automaker without a union.
Market analysts note that even a settlement will be a victory for Musk since UAW’s securing a generous compensation package would significantly widen the gap in labor costs between the Big Three and Tesla’s non-union facilities.
allenge Musk and eat into his share of the electric vehicle marketplace.
Detroit auto workers earn an average of $66 per hour, which could soar to $136 if the companies acquiesce to the union’s demands, according to Morgan Stanley calculations. Tesla’s non-union employees make an average of $45 per hour.
Labor Costs
Before the targeted strikes, Ford compared its labor costs to some of its competitors, including Tesla.
“The proposal would more than double Ford’s current UAW-related labor costs, which are already significantly higher than the labor costs of Tesla, Toyota, and other foreign-owned automakers in the United States that utilize non-union-represented labor,” the company said in a Sept. 14 statement.
However, appearing on CBS’ “Face the Nation” show on Sept. 17, UAW President Shawn Fain slammed the comparison.
By Andrew Moran
