Elon Musk warns UAW demands could bankrupt Ford, General Motors, and other automakers

Elon Musk warns UAW demands could bankrupt automakers

【Phoneauto News】Tesla CEO Elon Musk has issued a warning regarding the demands of the United Auto Workers (UAW) on the Detroit Three automakers. Musk stated that the union’s demands will push General Motors, Ford, and Chrysler towards bankruptcy.

According to Bloomberg, the UAW has reduced its wage increase demand from an initial 40% to 36%. Elon Musk pointed out in a post on X that the union’s demands could harm the companies they work for today. “They want a 40% wage increase and a 32-hour work week. It will undoubtedly push General Motors, Ford, and Chrysler towards bankruptcy,” Musk wrote.

Musk is not the only one holding this view. Patrick Kaser, portfolio manager at Brandywine Global, stated last week that if the Detroit Three automakers succumb to union pressure, their competitiveness could be compromised. “If the United Auto Workers get everything they are asking for, it would clearly damage the competitiveness of the three major companies,” Kaser said.

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Tesla, Lucid, Rivian, and other pure electric vehicle manufacturers use non-union labor. Therefore, their compensation structures usually rely on restricted stock units and employee stock purchase plans. Musk has previously pointed out that Tesla has made many of its employees millionaires through its compensation structure.

Tesla’s views may not necessarily align with UAW’s. UAW organized Tesla’s workers at the Fremont factory in California in 2017, but their efforts failed to gain union voting support. Musk invited UAW to hold a union vote at the Fremont factory in 2022, although such an event seemed to have not taken place in the end.

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