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<p class="has-drop-cap">On Friday, United Auto Workers (UAW)<a href="https://abcnews.go.com/GMA/News/video/uaw-launches-strike-big-3-automakers-103214820" target="_blank" aria-label=" launched a rolling strike (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link"> launched a rolling strike</a> against the Big 3 automakers: Ford (F), Stellantis (STLA) and General Motors (GM). This results from failed negotiations on shorter 32-hour work weeks, a 40% wage hike, retirement benefits, extended unionization for battery plant workers, and restored 401(k) pension plans for employees hired after 2007.&nbsp;</p> 
<p>The deadline for CEOs to respond expired at midnight on September 14th. UAW constitutes 146,000 members, but the rolling 10-day strike entails a staggered approach in rounds, the first putting 12,700 workers out of commission across the three leading automaker factories.&nbsp;</p> 
<p>According to UAW president Shawn Fain, this is an extension of the collective bargaining strategy.</p> 
<blockquote class="wp-block-quote"> 
 <p><em>“This strategy will keep the companies guessing. It will give our national negotiators maximum leverage and flexibility in bargaining, and if we need to go all out, we will. Everything is on the table,”</em></p> 
</blockquote> 
<p>During the negotiations, automakers framed UAW demands as too costly and unrealistic. Ford noted that consenting to UAW would result in doubling labor costs, which are already higher than other automakers, such as Tesla and Toyota.</p> 
<h3 id="the-big-3-weight-in-the-us-economy">The Big 3 Weight In the US Economy</h3> 
<p>Ford, General Motors, and Stellantis have a combined market cap of $154.24 billion. For comparison, Tesla alone has over five times larger weight, at $860.92 billion. Despite the Big 3 selling nearly 14 million new cars/trucks in 2022 vs. Tesla’s <a aria-label=" (opens in a new tab)" href="https://www.cnet.com/roadshow/news/tesla-reports-record-revenue-for-2022-with-1-31-million-evs-sold/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">1.31 million EVs</a> sold.&nbsp;</p> 
<p>Opting for the first simultaneous strike against the Big 3 in the UAW’s 88-year-old history, autoworkers were encouraged by their profits. The last UAW contract was ratified in November 2019. Since then,&nbsp; Ford Motor’s annual gross profit increased by 50.71% from 2020 to 2021 and 9.08% from 2021 to 2022.&nbsp;</p> 
<p>Likewise, General Motors saw a 30.76% gross profit increase in 2020 and a 17.36% increase in 2021. After undergoing a merger between Fiat Chrysler Automobiles (FCA) and the French PSA Group in 2021, Stellantis’ annual gross profit went up 6.54%.</p> 
<p>These profit margins may seem modest, given that companies now have to reorient toward EVs as governments around the globe keep placing deadlines for gasoline-EV transitions. However, the biggest stumbling block for UAW is the lopsided CEO compensation.</p> 
<p>Union-inclined <a href="https://www.epi.org/blog/uaw-automakers-negotiations/" target="_blank" aria-label=" (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">Economic Policy Institute</a> (EPI) calculated that the Big Three CEOs have ballooned their pay by 40% from 2013 to 2022. Moreover, the automakers delivered nearly $66 billion in stock buybacks and dividend payments during the same period.<br></p> 
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<h3 id="is-uaw-empowering-tesla">Is UAW Empowering Tesla?</h3> 
<p>Tesla has gone to great lengths for its <a aria-label=" (opens in a new tab)" href="https://www.statista.com/statistics/314768/number-of-tesla-employees/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">127,855</a> full-time employees to remain non-unionized. When such attempts happened in California and New York by UAW and WU, Tesla fired employees responsible for the efforts.</p> 
<p>This also applies to Germany, which refused to place its workers under the fold of IG Metall. In March 2021, Tesla-union relations heated up when the National Labor Relations Board (NLRB) perceived <a aria-label=" (opens in a new tab)" href="https://twitter.com/elonmusk/status/998454539941367808?lang=en" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">this tweet</a> from Elon Musk as a <a aria-label="violation of federal labor laws (opens in a new tab)" href="https://www.bloomberg.com/news/articles/2021-03-25/tesla-illegally-fired-worker-and-must-kill-musk-tweet-nlrb-says" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">violation of federal labor laws</a>. </p> 
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<p>Specifically, the tweet was “an implied threat to end stock options as retaliation for unionization.” In July 2023, the 5th U.S. Circuit Court of Appeals in New Orleans granted Tesla’s request to revisit the case, citing free speech concerns. The matter is yet to be resolved.</p> 
<p>However, Elon Musk’s sentiment on unions likely remains unchanged, given how strongly he framed the reasoning behind it.&nbsp;</p> 
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  <img decoding="async" width="882" height="416" src="https://tokenist.com/wp-content/uploads/2023/09/Screenshot-2023-09-15-183729.png" alt="" class="wp-image-172111" srcset="https://tokenist.com/wp-content/uploads/2023/09/Screenshot-2023-09-15-183729.png 882w, https://tokenist.com/wp-content/uploads/2023/09/Screenshot-2023-09-15-183729-300x141.png 300w, https://tokenist.com/wp-content/uploads/2023/09/Screenshot-2023-09-15-183729-768x362.png 768w, https://tokenist.com/wp-content/uploads/2023/09/Screenshot-2023-09-15-183729-650x307.png 650w, https://tokenist.com/wp-content/uploads/2023/09/Screenshot-2023-09-15-183729-744x352.png 744w" sizes="(max-width: 882px) 100vw, 882px"> 
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<p>The Big 3 bind is now simple. If the companies relent to UAW requests because they cannot afford the rolling strike, this would make the automakers even less competitive in the emerging EV arena. On the other hand, Tesla avoided the union clench entirely.</p> 
<p>On top of having <a aria-label="59% EV market share (opens in a new tab)" href="https://www.tesmanian.com/blogs/tesmanian-blog/tesla-is-the-absolute-leader-in-the-ev-market-in-the-us-with-a-60-share" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">59% EV market share</a> dominance in the US, Tesla employs a direct-to-consumer (DTC) sales model instead of the friction resulting from car dealership markups. Ford alone could ramp up its projection loss for EVs if the strike persists. For 2023, it climbed to $4.5 billion from the previous $3 billion loss projection.</p> 
<p>In turn, Tesla could aggressively price its models as extra pressure and cement <a href="https://tokenist.com/tesla-up-3-3-as-rivian-agrees-on-charging-standard/" rel="noopener noreferrer nofollow" class="deco-link">EV dominance</a> in the US. Already, Tesla models have received the largest price drops of all the vehicles.</p> 
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  <blockquote class="twitter-tweet" data-width="500" data-dnt="true"> 
   <p lang="en" dir="ltr">Biggest price drops since January: <a href="https://t.co/ptVxxQ6BRW" target="_blank" rel="noopener noreferrer nofollow">pic.twitter.com/ptVxxQ6BRW</a></p>— CarDealershipGuy (@GuyDealership) <a href="https://twitter.com/GuyDealership/status/1701949377156178149?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">September 13, 2023</a> 
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<p><strong><em>Do you think Tesla will have to release an under-$40k EV to push market dominance to the next level? Let us know in the comments below.</em></strong></p> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/could-tesla-benefit-from-the-uaws-strike/">Could Tesla Benefit from the UAW’s Strike?</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Could Tesla Benefit from the UAW’s Strike?

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