Elon Musk and Tesla could emerge as winners from the UAW strikes against Detroit automakers Ford, GM, and Stellantis. Thousands of union workers are striking at the plants of the Detroit Three  - as the three legacy automakers are called. The intensity and nature of the strikes are unlike any other in American automotive history. The United Auto Workers have made a list of demands even its president Shawn Fain calls audacious. Among other things, they want a 40% increase in wages and a four-day 32 hour work week. That would bring all- in-hourly labor costs to more than double what they are today according to analysts. However, legacy manufacturers are already having trouble competing with Tesla's manufacturing costs and selling price.

Chapters:
00:00 - Introduction: Why Tesla is at the center of the UAW strikes
1:47 - Chapter 1: Why strike?
3:06 - Chapter 2: Why is Tesla winning? 
5:44 - Chapter 3: Tesla’s (non-union) history
8:01 - Chapter 4: So what will happen? 

Producer: Robert Ferris
Editor: Darren Geeter
Production Support: Lora Kolodny
Senior Managing Producer: Tala Hadavi
Additional footage: Getty Images, Ford, Stellantis, Rivian

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Why Tesla May Be The Big Winner Of The UAW Strikes

The United Auto Workers Union, the nation's largest auto union, voted to authorize a strike.

The union expanding the walkout across the country.

We're talking nationwide, California to Pennsylvania.

More than 25,000 union workers are striking the plants of the big 3 Detroit auto manufacturers.

And the intensity and nature of the strikes are unlike any other in recent American automotive history.

The United Auto workers have made a list of demands even UAW President Sean Fain calls audacious.

Industry analysts estimate that meeting the union's demands would bring all in hourly labor costs to $150 per worker, more than double what they are today.

What Sean Fain has done here is thrown out the playbook.

The UAW claims the workers who have helped the Detroit 3 bring in a quarter trillion dollars in profits over the last decade should have a share of it.

It hurts the communities where these plants are.

There's no way we can be sustainable as a company.

You want you want us to choose bankruptcy?

Some industry analysts claim that while this all keeps happening, the big winners are the non-union automakers like Tesla.

Even CEO Elon Musk seems to think the demands could bankrupt the Detroit 3.

You know, the UAW would probably say it's a race to the bottom, but it is a race to make electric vehicles profitable, and Tesla is doing that, whereas the likes of Ford are not.

The 3 Detroit automakers, General Motors, Ford, and Transnational Stellantis all use union labor, represented by the United Auto Workers Union, or UAW for short.

About every 4 years, unions renegotiate their contracts with automakers.

This time, they've caught the industry off guard.

Companies are trying to shift to EVs while fending off competition from both foreign and homegrown companies.

The UAW over the past 4 years has watched the automakers make record profits.

They've seen many of their union brethren, sisters get record contracts.

That includes a double digit increase that John Deere, not to mention FedEx, which isn't at UAW.

But they've been watching other unions just get paid and paid and paid.

According to the automakers, agreeing with the terms would threaten their very existence.

While many foreign companies like Toyota, Nissan, BMW, Mercedes-Benz and Volkswagen use organized labor in their home countries, they don't in their U.S.

Neither do many of the up-and-coming electric car makers like Rivian and Lucid following Tesla's lead.

As of right now, it appears Tesla will be a winner in all of this.

And we're not necessarily talking about EV market share.

What we're really talking about is actual labor costs.

And Tesla's labor costs, we're talking all in bonuses, wages, health care, everything is estimated to be about 45 to 50 dollars.

Industry estimates of all in per employee per hour costs are far lower at Tesla than at any of the big 3 automakers.

This is partly because Tesla is non-union.

Its costs are also lower than those of foreign counterparts also running non-union factories.

Any kind of increase in the hourly wait, the benefits is really going to kind of increase the gap between GM, Ford, and Stellantis, between Tesla and the foreign automakers such as Toyota, Nissan, and others that have kind of been coming here and building EVs now.

From day 1, when they start talks and talking about spending more, Elon wins because Tesla is cheaper, make cars over there for those electric vehicles.

And I mean, when you talk about kind of a disadvantage for electric vehicles, it's not just Tesla, it's not just the transplants.

It's actually the newcomers such as Rivian, Lucid.

They don't have the legacy costs that the D3 have.

Already Tesla controls about 60% of the electric vehicle market and has slashed prices considerably throughout 2023.

In August Cox Automotive data showed the average price paid for an electric vehicle was $53,376, down from $53,633 in July and down from more than $65,000 in August of 2022.

That decline is driven almost entirely by Tesla.

In August, Model 3 transaction prices were down 21% year over year, while Model S was down 17%, Model Y 16%, and Model X 13%.

Musk also said at the company's investor day in March 2023, he wants to cut the cost of producing the next generation of cars by about 50%.

If the Detroit 3 take the deal, the union has proposed the average price of an EV could rise by $3,000 to $5,000 and would ultimately be a torpedo to the future business models of the 313 area code, a Wedbush analyst said in a note September 2023.

In 2016, Tesla employee Jose Moran reached out to the UAW to try to unionize workers at Tesla.

For at least 2 years, the union tried to organize workers at the company's Fremont plant.

At the time, there were complaints about workplace safety, racial discrimination, sexual harassment, and a range of other issues.

On September 28, 2023, the US Equal Employment Opportunity Commission sued Tesla for allegedly allowing widespread racist harassment of black employees and retaliating against black workers who spoke out.

Nathan Murthy worked for more than 6 years as a software engineer at Tesla.

You know, for me, like the T in Tesla stands for trauma.

Like I've seen, I've had really traumatic experiences working at that company.

Like my first manager, he was like this Princeton graduate, you know, white male guy.

He saw 2 South Asian employees working together, he made a joke that they were plotting an attack or a bomb, like a terrorist planning attack.

And I was like, that's way, way, like that's not cool to say in a workplace.

Later, information emerged that Tesla hired a PR firm to monitor employees.

In 2018, Musk tweeted a comment saying there was nothing keeping Tesla workers from unionizing, but why pay union dues and give up stock options for nothing?

The National Labor Relations Board found that comment violated federal labor laws because it suggested Tesla employees could lose stock options if they unionized.

Tesla had already fired a union activist, Richard Ortiz.

The NLRB ultimately ordered Tesla to rehire the employee and to have Musk delete the tweet, which they saw as threatening workers' compensation.

Tesla appealed the administrative court's ruling and Musk's tweet remains online.

Pretty much every employee I know at Tesla who has spoken out has been fired and they have to go through the court system to get justice.

In 2022, Musk invited the UAW to try to unionize the company's workers.

But just a short year later, organizers alleged that Tesla also fired dozens of workers at a plant in upstate New York due to unionizing.

Workforce remains non-union as of September 2023.

Stock options are often cited as 1 reason why Tesla employees might have been reluctant to join unions in the past.

I think a number of employees were willing to accept some of the cutting of the corners on safety and other things because they saw that they were really benefiting in terms of the stock option approach that was taken at Tesla.

But the median CEO to worker pay at these companies is something like 280 to 360x.

Like at Tesla, the median worker to CEO pay gap is 40,000x.

You'll hear Sean Fain, the UAW president, talk about the big 3, about how they've earned something like $250 billion in profits over the last decade.

Tesla amassed, as a single company alone, $55 billion in gross profits, roughly over that same time frame.

Opinions on unions are, of course, divided.

However, apart from benefits to workers, some research suggests unions can provide a range of benefits for companies, such as increased worker productivity and reduced turnover.

What is clear, though, is that two-thirds of Americans support them.

Because when you increase your pay by 40 percent and you increase workers pay by 6 percent over the same time period, it just doesn't look right and it doesn't look fair.

That if you want if competitiveness is an important factor for workers, it should go all the way up to the C-suite.

A lot of the conversation is framed around like who are the winners and losers.

Tesla's gonna win from this because they're not in union and they have an amazing product and they have Elon behind that so on so forth.

I think that's a little bit of wishful thinking.

And I think it also ignores a few realities that have happened in the last couple of years.

You know, like you've seen the price margins on these vehicles steadily decline.

You've seen as a result of reductions in the sales price, the MSRP of these vehicles, it's eating into Tesla's profit margins.

And we haven't seen any increase in demand elasticity.


Speaker 0: The United Auto Workers Union, the nation's largest auto union, voted to authorize a strike. The union expanding the walkout across the country. We're talking nationwide, California to Pennsylvania.

Speaker 1: More than 25,000 union workers are striking the plants of the big 3 Detroit auto manufacturers. And the intensity and nature of the strikes are unlike any other in recent American automotive history. The United Auto workers have made a list of demands even UAW President Sean Fain calls audacious. Industry analysts estimate that meeting the union's demands would bring all in hourly labor costs to $150 per worker, more than double what they are today.

Speaker 2: What Sean Fain has done here is thrown out the playbook.

Speaker 1: The UAW claims the workers who have helped the Detroit 3 bring in a quarter trillion dollars in profits over the last decade should have a share of it.

Speaker 0: It hurts everybody. It hurts our employees. It hurts the communities where these plants are.

Speaker 3: There's no way we can be sustainable as a company. You want you want us to choose bankruptcy?

Speaker 1: Some industry analysts claim that while this all keeps happening, the big winners are the non-union automakers like Tesla. Even CEO Elon Musk seems to think the demands could bankrupt the Detroit 3.

Speaker 2: You know, the UAW would probably say it's a race to the bottom, but it is a race to make electric vehicles profitable, and Tesla is doing that, whereas the likes of Ford are not. No parts!

Speaker 0: No pay! No parts! No pay! No parts! No pay!

No parts! No pay! No parts!

Speaker 1: The 3 Detroit automakers, General Motors, Ford, and Transnational Stellantis all use union labor, represented by the United Auto Workers Union, or UAW for short. About every 4 years, unions renegotiate their contracts with automakers. This time, they've caught the industry off guard. The timing is not great. Companies are trying to shift to EVs while fending off competition from both foreign and homegrown companies.

Speaker 4: The UAW over the past 4 years has watched the automakers make record profits. They also don't live in a bubble. They've seen many of their union brethren, sisters get record contracts. That includes a double digit increase that John Deere, not to mention FedEx, which isn't at UAW. But they've been watching other unions just get paid and paid and paid.

And now they believe it's their turn.

Speaker 1: So far, nothing. According to the automakers, agreeing with the terms would threaten their very existence. While many foreign companies like Toyota, Nissan, BMW, Mercedes-Benz and Volkswagen use organized labor in their home countries, they don't in their U.S. Factories. Neither do many of the up-and-coming electric car makers like Rivian and Lucid following Tesla's lead.

Speaker 4: As of right now, it appears Tesla will be a winner in all of this. And we're not necessarily talking about EV market share. Tesla already dominates that. What we're really talking about is actual labor costs. And Tesla's labor costs, we're talking all in bonuses, wages, health care, everything is estimated to be about 45 to 50 dollars.

Speaker 1: Industry estimates of all in per employee per hour costs are far lower at Tesla than at any of the big 3 automakers. This is partly because Tesla is non-union. Its costs are also lower than those of foreign counterparts also running non-union factories.

Speaker 4: Any kind of increase in the hourly wait, the benefits is really going to kind of increase the gap between GM, Ford, and Stellantis, between Tesla and the foreign automakers such as Toyota, Nissan, and others that have kind of been coming here and building EVs now.

Speaker 2: From day 1, when they start talks and talking about spending more, Elon wins because Tesla is cheaper, make cars over there for those electric vehicles.

Speaker 4: And I mean, when you talk about kind of a disadvantage for electric vehicles, it's not just Tesla, it's not just the transplants. It's actually the newcomers such as Rivian, Lucid. And the automakers know this. They don't have the legacy costs that the D3 have.

Speaker 1: Already Tesla controls about 60% of the electric vehicle market and has slashed prices considerably throughout 2023. In August Cox Automotive data showed the average price paid for an electric vehicle was $53,376, down from $53,633 in July and down from more than $65,000 in August of 2022. That decline is driven almost entirely by Tesla. In August, Model 3 transaction prices were down 21% year over year, while Model S was down 17%, Model Y 16%, and Model X 13%. Musk also said at the company's investor day in March 2023, he wants to cut the cost of producing the next generation of cars by about 50%.

If the Detroit 3 take the deal, the union has proposed the average price of an EV could rise by $3,000 to $5,000 and would ultimately be a torpedo to the future business models of the 313 area code, a Wedbush analyst said in a note September 2023. In 2016, Tesla employee Jose Moran reached out to the UAW to try to unionize workers at Tesla. For at least 2 years, the union tried to organize workers at the company's Fremont plant. At the time, there were complaints about workplace safety, racial discrimination, sexual harassment, and a range of other issues. On September 28, 2023, the US Equal Employment Opportunity Commission sued Tesla for allegedly allowing widespread racist harassment of black employees and retaliating against black workers who spoke out.

Nathan Murthy worked for more than 6 years as a software engineer at Tesla.

Speaker 5: You know, for me, like the T in Tesla stands for trauma. Like I've seen, I've had really traumatic experiences working at that company. Like my first manager, he was like this Princeton graduate, you know, white male guy. He saw 2 South Asian employees working together, he made a joke that they were plotting an attack or a bomb, like a terrorist planning attack. And I was like, that's way, way, like that's not cool to say in a workplace.

Speaker 1: Later, information emerged that Tesla hired a PR firm to monitor employees. In 2018, Musk tweeted a comment saying there was nothing keeping Tesla workers from unionizing, but why pay union dues and give up stock options for nothing? The National Labor Relations Board found that comment violated federal labor laws because it suggested Tesla employees could lose stock options if they unionized. Tesla had already fired a union activist, Richard Ortiz. The NLRB ultimately ordered Tesla to rehire the employee and to have Musk delete the tweet, which they saw as threatening workers' compensation.

Tesla appealed the administrative court's ruling and Musk's tweet remains online.

Speaker 5: Pretty much every employee I know at Tesla who has spoken out has been fired and they have to go through the court system to get justice.

Speaker 1: In 2022, Musk invited the UAW to try to unionize the company's workers. But just a short year later, organizers alleged that Tesla also fired dozens of workers at a plant in upstate New York due to unionizing. Tesla's U.S. Workforce remains non-union as of September 2023. Stock options are often cited as 1 reason why Tesla employees might have been reluctant to join unions in the past.

Speaker 3: I think a number of employees were willing to accept some of the cutting of the corners on safety and other things because they saw that they were really benefiting in terms of the stock option approach that was taken at Tesla.

Speaker 5: But the median CEO to worker pay at these companies is something like 280 to 360x. That's median worker pay to CEO. At Tesla, it's insane. Like at Tesla, the median worker to CEO pay gap is 40,000x. You'll hear Sean Fain, the UAW president, talk about the big 3, about how they've earned something like $250 billion in profits over the last decade.

Tesla amassed, as a single company alone, $55 billion in gross profits, roughly over that same time frame.

Speaker 1: Opinions on unions are, of course, divided. However, apart from benefits to workers, some research suggests unions can provide a range of benefits for companies, such as increased worker productivity and reduced turnover. What is clear, though, is that two-thirds of Americans support them.

Speaker 3: Because when you increase your pay by 40 percent and you increase workers pay by 6 percent over the same time period, it just doesn't look right and it doesn't look fair. That if you want if competitiveness is an important factor for workers, it should go all the way up to the C-suite.

Speaker 5: A lot of the conversation is framed around like who are the winners and losers. Tesla's gonna win from this because they're not in union and they have an amazing product and they have Elon behind that so on so forth. I think that's a little bit of wishful thinking. And I think it also ignores a few realities that have happened in the last couple of years. You know, like you've seen the price margins on these vehicles steadily decline.

You've seen as a result of reductions in the sales price, the MSRP of these vehicles, it's eating into Tesla's profit margins. And we haven't seen any increase in demand elasticity.

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Why Tesla May Be The Big Winner Of The UAW Strikes