Tesla CEO Elon Musk is no fan of unions—and they are certainly no fan of him—but at the moment the world’s richest billionaire might be quietly cheering on United Auto Workers president Shawn Fain. The combative union leader shows no signs of backing down from Detroit’s Big 3 automakers as he pushes “audacious” contract demands. If no deal is struck, about 146,000 UAW workers are poised to go on strike starting Friday.
That could benefit non-union Tesla at just the right time—as traditional automakers push aggressively into electric vehicles. A strike would slow that movement down.
“If a strike happens then ultimately production and the EV roadmap could be pushed out into 2024 and delays would be on the horizon at this crucial period for GM, Ford, and Stellantis, Wedbush,” analyst Dan Ives wrote in a research note, as reported by Insider. Tesla is well situated to benefit from any work stoppage at its rivals, he added.
“I think this is going to be the most severe and the most dramatic strike in 50 years,” Erik Gordon, a business professor at the University of Michigan, told local station WNEM. Barclays analyst Dan Levy, meanwhile, called a strike is “highly likely.”
In addition to slowing down the Detroit automakers’ EV efforts, a strike would take a financial toll. A strike of just 10 days against GM, Ford, and Stellantis would cost them nearly a billion dollars, according to the Anderson Economic Group.
While the Detroit automakers had nearly 2 million vehicles on hand at the end of July, “a work stoppage of three weeks or more would quickly drain the excess supply, raising vehicle prices and pushing more sales to non-union brands,” auto analyst Sam Fiorani told the Associated Press.
One of those non-union brands, of course, is Tesla.
Musk has taken a tough stance against organized labor. Tesla workers earn about $45 an hour in wages and benefits, whereas UAW-represented employees at the Detroit Three make about $64 to $67 an hour, according to Reuters. The gap gives Tesla a competitive advantage, as do various manufacturing strategies and not having to share profits with dealers.
In March, a three-judge panel ruled that Musk had unlawfully threatened workers with the loss of stock options if they chose to be represented by a union. In July, a federal appeals court said it would reconsider the ruling.
At the heart of the matter was a 2018 tweet in which Musk wrote: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues and give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.”
In February, workers at a Tesla factory in Buffalo were fired shortly after launching union organizing efforts. Workers United said the terminations were an illegal form of retaliation. Tesla denied this, saying on its blog it had decided to fire the workers beforehand for poor performance.
Tesla has been pressuring other automakers this year with sometimes dramatic price cuts, often angering its own customers who bought their vehicles at the higher prices just weeks or days before the cuts—or who were about to sell a used Tesla that suddenly became worth a lot less.
Also worrying Detroit’s big automakers are EV rivals emerging in China and exporting to Europe and elsewhere—though not yet to America. “The Chinese are going to be the powerhouse,” Ford CEO Jim Farley at a finance event in May.
Ford executive chairman Bill Ford Jr. added in June, “They are not here, but they will come here, we think at some point, and we need to be ready.”
Tesla might be more ready than its Detroit rivals—and no union strike looms on its horizon.